Business coalition accuses government of planning $70m tax

By PAM GRAHAM


The Government is planning a $70 million tax on the travelling public, according to a coalition of business groups.

The Travel & Trade Industry Coalition claims that a tax to pay for border services to individual travellers, charged via airlines, is in the pipeline. This would be on top of the proposed $20 million security tax on exporters that is expected to be levied per vessel.

The group said it had been told about the idea of charging for services provided to travellers and it was expecting a discussion paper to be released before Christmas.

It estimated security checks on bags not carried as hand luggage would cost $20 million and recovery of border check costs, many currently paid for by the Government, would cost a further $50 million.

A spokeswoman for Transport Minister Paul Swain said a committee of Cabinet ministers was considering a range of issues related to border security.

New Zealand has always closely monitored imports to protect agriculture industries but terrorism has put exports in the spotlight. The United States is requiring checks as goods leave countries destined for its borders.

The question is who pays and the Government has decided exporters should because the checks benefit them, rather than the public in general.

Simon Carlaw, chief executive of Business New Zealand, said security was a public good and the Government was just guessing at the $20 million figure. "What is it buying us?" he said.

He also wants to know more about the possibility that New Zealand Customs will be able to carry out checks on behalf of US Customs.

He pointed out that farmers had turned back the so-called fart tax, but business was not so confident about rolling back an export tax.

"I don't think it is one that grips the community in any way shape or form. It sort of takes place between consenting adults behind wharf gates," Carlaw said.

He said business had been told that the Green Party supported the export tax "which means the real numbers game has already been done".

However, the business groups are hoping that there will be a ground swell against new taxes when the wider public learns one is planned for them.

Stewart Milne of the Board of Airline Representatives is co-ordinating the coalition against the taxes. Members include Export New Zealand, Federated Farmers, regional chambers of commerce and employers groups and airports.

The coalition has written to parliamentarians saying they were broadly supportive of measures in the Border Security Bill but not the recovery of costs through taxes on trade, or fees on tourists and travellers.

Milne said his group had been advised that the Government was likely to go down the same track with travellers that it had gone with exporters.

He said most countries did not recover the costs of border checks. The tax would increase airfares and make airlines less competitive.

The coalition believed the Government was considering recovering costs of border control services provided by agriculture and customs officials that had previously not been separately passed on.