Auckland Mayor Phil Goff lobbies Government for a bed tax to replace his own tax on hotels

Auckland's hotel and accommodation sector has opposed Phil Goff's bed tax since the outset. Photo / Sam Hartnett

Auckland Mayor Phil Goff has lobbied the Government for a bed tax to replace the council's controversial tax on local hotels and motels which has been ruled invalid by the Court of Appeal.

In a letter to Finance Minister Grant Robertson last November, Goff asked for help to levy an accommodation bed tax to replace the council's Accommodation Provider Targeted Rate (APTR) which, he said, cannot be applied while bed nights are low.

The letter, obtained by the Herald under the Official Information Act, was about the Government's support package and other ideas to "recognise the sacrifices made by Aucklanders" through three months of a Delta-imposed lockdown.

Auckland Mayor Phil Goff. Photo / File

In a statement, Goff said the request was made for the reason stated in the letter - replacing the council bed tax with a Government bed tax - saying the Government remains non-committal as to whether it will legislate for councils to employ the use of a bed tax.

A spokesman for Robertson said: "This is not under consideration."

Goff's request was made only days before the Court of Appeal ruled the council's bed tax was invalid. The country's top judges will decide once and for all if the tax is legal after the council decided to appeal the ruling to the Supreme Court.

The council's bed tax was the brainchild of Goff as an alternative to fund tourism promotion and major events by the council's events arm, Auckland Unlimited. It was introduced against strong opposition from the accommodation sector.

In a long-running court battle with the sector, Auckland Council has spent more than $1.5 million in legal costs to defend the tax, which has collected more than $40m from visitor accommodation. The tax has been on hold since 2020 due to the pandemic.

The bed tax has not gone down well with the accommodation sector. Photo / Dean Purcell.

Troy Clarry, one of the litigants and owner of a 14-bed motel on the Whangaparaoa Peninsula, was appalled that politicians think they can still get money out of the struggling accommodation sector.

"I just can't see how they continue to want money from an industry that is going to go through an incredible new building phase when basically we are back to zero," said Clarry, whose bill for the tax had been $8000 to $9000 a year.

What's more, he said, with the tax on hold there is no money for Auckland Unlimited to promote the city when it is most needed.

Hotel Council Aotearoa strategic director James Doolan said he was unaware Goff had been lobbying Robertson for a bed tax but at the end of 2020 the mayor was on radio saying he had made a proposal to Tourism Minister Stuart Nash.

He said the APTR was a quasi bed tax designed to get Goff a proper bed tax and if he is still lobbying Robertson in the midst of a pandemic it is hugely disappointing.

Hotel Council Aotearoa strategic director James Doolan. Photo / File

"It's one thing for Goff to push through a damaging and wrong policy during boom times in 2016 when he first floated this stupid idea. It's another level of pig-headedness to keep pushing the policy with closed borders and a pandemic.

"A bed tax is an incredibly short-sighted solution to the fundamental funding tourism model in New Zealand. It comes from politicians who can never say 'enough is enough'," said Doolan.

Pre-Covid, he said, the Government was collecting $7 billion a year in GST and other taxes from tourists, and received a "tiddling" $15m for tourism infrastructure recently.

Doolan said Goff has repeatedly ignored invitations from Hotel Aotearoa Council to discuss alternative tourism funding arrangements.