NZ First GST refund from foreign visitors could cut Tauranga rates by $22m

Mount Maunganui's planned new visitor information centre and i-Port could be funded by GST refunds from a new Government. Image / Supplied

Tauranga's rates burden will be cut by $22 million if New Zealand First makes the return of GST gathered from overseas tourists a part of negotiations to form a new Government.

"It is an absolute game changer on how we fund things," mayor Greg Brownless told the council's finance committee yesterday.

The $22m was the GST component of the $171m which Tourism Bay of Plenty estimated was spent by international visitors to the city last year.

"It will boost the city for our residents," he said yesterday. "Think what we could do."

New Zealand First list MP Clayton Mitchell of Tauranga said the GST policy was very well received on the party's regional bus tour led by Winston Peters.

"It resonated strongly with voters."

Mr Mitchell agreed with the mayor that the policy had the potential to be a game changer, particularly for high-growth councils like Tauranga who were finding it very tough.

The policy on the party's website stated: "Reduce the rates burden and boost service provision by giving local government all the GST from foreign tourism ($1.5 billion per annum) and a 25 per cent share of royalties from bottled water for export and crown minerals."

''It will be a great policy to get across the line," Mr Mitchell said. "It will be thoroughly discussed when we are looking at putting a Government together.

Mr Brownless said after the meeting that the return of GST would be a way of stopping ratepayers having to cough up for visitor-related infrastructure.

He saw the $22m being put to a variety of uses including the operating costs of Tauranga's planned museum, a new visitor information centre at Mount Maunganui, off-road cycleways, the downtown waterfront, and keeping Mauao up to scratch.

Although there was nothing in the policy that directed how councils should spend the money, Mr Brownless said he was trying to keep it tourism related.

It could replace the $4m earmarked to be collected from Tauranga residential and commercial ratepayers to build the planned $5m visitor information centre

"Plenty of things that benefit tourists also benefit locals - I am hopeful."

He said local government had been advocating for a long time for the Government to return some GST back to the regions.

"This is a practical way it could happen."

His comments came after Tourism Bay of Plenty chief executive Kristin Dunne had finished delivering the organisation's annual report.

Total visitor spend to June was $950m, representing growth of 9.7 per cent. "On average, $2.6m is spent in our region every day because of tourism. I am particularly pleased to see the off-peak spend increase by 41 per cent, with industry feedback they had a much more buoyant shoulder and winter season."

She said the domestic market was the envy of many regions, with the spend totalling $730m. "We know that many domestic visitors stay with family and friends which is why this year's launch of our local campaign 'No Place Like Home' is so important."

Tauranga City Council funding of Tourism Bay of Plenty totalled nearly $1.55m for the year, with Western Bay District Council contributing an extra $190,000.

The organisation had a deficit after tax of nearly $80,000 on total revenue of $2.35m and spending of $2.43m.

Overseas tourist spend GST calculation for Tauranga
Visitor spend before GST: $148.695m
GST at 15%: $22.305m
Total spend 2016-17: $171m (incl GST)