Auckland Mayor Phil Goff is winning support round the council table for a visitor levy on hotels and other accommodation - but the tourism sector remains strongly opposed to the proposal.
Goff formally outlined the levy at today's finance committee, shortly after Tourism Industry Aotearoa chief executive Chris Roberts slammed the idea.
"The proposal is simply an increase in the rates paid by hotels and motels and a very substantial increase," Roberts said.
He said it was wrong for Goff to assume the cost would be passed onto guests, saying hotels do not add a line for "electricity" when power bills go up.
"It's a competitive market and hotels and motels are competing with airbnb properties which don't have to pay this extra rate.
It's going to make life less profitable for hotels, and discourage investors from building new ones," Roberts said.
Goff told councillors it was a bit rich for the tourism and hotel industries to say the council was picking on them.
"They were quite happy for the ratepayer to meet the cost and they are not even meeting the cost themselves of the visitor levy. It is the visitor that meets it," Goff said.
He acknowledged that not all accommodation providers would pay the levy, but it would capture most mainstream providers. Airbnb had public records of its properties, he said.
Goff told the Herald that airbnb is "willing to be part of the discussions we have on the design of this levy".
The proposed levy would apply to Kiwi and overseas visitors and could raise between $20 million and $30 million a year. The charge could range from a few dollars a night at a backpackers to $20 or more at the city's top hotels.
The charge would replace ratepayer-funded spending by Auckland Tourism, Events and Economic Development (Ateed) to attract visitors and support major events
New councillor Daniel Newman "really liked the idea" of the levy - a common view round the council table. Councillor Mike Lee said he would be happier if the council tackled costs inside council and council-controlled organisations (CCO) before introducing the levy.
The levy is part of Goff's first budget proposal that includes two other ideas to raise revenue - a regional petrol tax requiring Government approval and targeted rates for new large-scale housing developments.
Other proposals for the budget include an extra $500,000 to co-ordinate work to support homeless Aucklanders and phasing in the living wage for 2100 staff, including 400 library workers, over three years. When fully implemented it will cost $9 million.
Goff, a former Labour MP, appears to have the support to introduce both of these social measures, but faces opposition from some right-leaning councillors for the living wage proposal.
At this stage of the budget cycle, Goff has not identified any savings but said it was "incumbent on council to get its house in order" and reduce costs.
Savings targets for the council and CCOs will be set in the budget in the New Year. The budget will go out for public consultation in February/March, adopted in June and come into effect in July.