Key fights UK's flight tax

By Claire Trevett, Beck Vass

Prime Minister John Key met his British counterpart Gordon Brown overnight and tried to stop a planned air travel tax which the New Zealand travel industry says could jeopardise the billion-dollar UK tourist market.

The passenger levy - which increases the further a passenger is flying to help offset carbon emissions - would also affect New Zealanders flying home from the United Kingdom.

Travel to New Zealand attracts the highest of four levels of the tax.

And Britain plans to increase it from $113 to $240 by November 2010.

Mr Key yesterday sought urgent advice from officials about the new environmental taxes before his meeting with Mr Brown, which was scheduled for about 2am today (NZT).

Mr Key is also Tourism Minister, and there are concerns any disincentives against visiting New Zealand will worsen a drop in visitor numbers already caused by the global recession.

A spokesman for Mr Key described the tax as "a form of protectionism".

New Zealand Tourism Association chief executive Tim Cossar yesterday said the British tourism market added about $1 billion a year to the New Zealand economy, and any impact on that - even of just a few per cent - could be worth many millions of dollars.

The United Kingdom is New Zealand's second biggest tourism market, with about 290,000 visitors in the past year, but numbers have dropped by 4 per cent from the year before.

The tax will more than double within two years - rising from the current 40 ($113) to 55 ($155) in a year and increasing again to 85 ($240) in November 2010.

It will also add to the costs for New Zealanders visiting Britain, who will have to pay it on their return flight.

About 94,000 New Zealanders went on short-term trips to the United Kingdom in the past year.

Mr Cossar said his association would be talking to Mr Key about the tax.

"It certainly could have an impact on price in what is considered a reasonably expensive ticket anyway.

"Travelling to the other side of the world isn't cheap, so it's just another thing that could go against us."

Hospitality Association of New Zealand chief executive Bruce Robertson said the passenger tax was "clearly of concern".

"I would consider this to be a protectionist measure - anti-trade ... they're using the guise of sustainability and conservation as a measure of putting in a trade barrier, and that's really at odds with all the discussions at APEC last week.

"This is a trade barrier to make it more difficult for Britons to travel long distance and, effectively, will be encouraging them to stay at home. In the tourism sector, this will be seen as a trade barrier."

The tax would probably further slow tourism, in what was already a tight economy.

"The projections in terms of tourism travel are not that flash in terms of forward bookings, so an additional disincentive to travel by way of extra tax is certainly not going to help," Mr Robertson said.

"We are already an expensive destination, We don't need any additional costs being imposed on us."

House of Travel sales director Brent Thomas said he believed the current economic climate, with "fairly significant" fuel surcharges on flights and rising unemployment rates, was more of a threat to the industry.

Fuel surcharges could in some cases add more than $500 to a flight from Britain to New Zealand, which was much more likely than the travel tax to affect travellers.

Green Party co-leader Russel Norman said such levies were inevitable as countries incorporated carbon emission costs into their prices.

But he said it was bad timing for the tourism industry which was already struggling.

The best way to counter it was to encourage people to stay for longer and improve New Zealand's environmental performance.

KEY'S BIG DAY

Prime Minister John Key's overnight itinerary in London:

* Meet long-lost half-brother Martyn Key
* Audience with Queen at Buckingham Palace
* Meet UK Prime Minister Gordon Brown at No 10 Downing Street
* Visit Conservative Party leader David Cameron
* Promote New Zealand at giant NZ rugby ball near Tower Bridge

- NZ Herald

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