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Home / Rotorua Daily Post

Opinion: Time is right to think about tourist levy

By Fletcher Tabuteau
Rotorua Daily Post·
2 Dec, 2016 10:00 PM3 mins to read

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A levy attached to the cost of your plane ticket is one of the simplest ways of applying a "tourist tax". PHOTO/FILE

A levy attached to the cost of your plane ticket is one of the simplest ways of applying a "tourist tax". PHOTO/FILE

Tourism is now agreed to be the country's largest export earner, with total expenditure in the year ended March 2015 at $29.8 billion - an increase of 10.3 per cent on the previous year.

International tourism expenditure increased 17.1 per cent to $11.8b and contributed 17.4 per cent to New Zealand's total exports of goods and services.

The problem in my view is the lack of central government thinking on what this growth means for the country.

There has been some debate around a visitor levy or tourist tax for some time now.

I've certainly been talking to people about how to better fund infrastructure since I became an MP here in Rotorua.

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But it would seem that the mayor of Auckland has got everyone fired up again by talking about taxing anyone visiting Auckland. I find it hard enough to want to go into Auckland at the best of times, if Phil's going to charge me more to stay there, well.

The most recent and ongoing conversation from regional and smaller councils was about charging a levy in order to invest more money in local infrastructure.

Councils are struggling to provide core services, rightly reluctant to raise rates any more and yet the pressure from tourism gives rise to a need for more and more money being spent on what we all consider to be core infrastructure.

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The numbers being discussed in six years is 4.5 million tourists per annum. Now that's a big number.

National's token offering of $12 million over three years has been taken up in the main by public toilets in a very few select places around the country. This has been less than a token gesture from the Government.

There are several ways to apply a levy. The easiest and most straightforward would perhaps be an international arrivals levy administered and collected by either the airports or the airlines. Think simply; a levy attached to the cost of your plane ticket.

This way of thinking seems to be garnering favour, rather than individual councils applying highly inefficient and administratively costly levies through accommodation providers. Not even all of them, just hotels, motels and backpackers apparently. That approach would be unfair to those providers.

Even a levy on a plane ticket would also probably be slightly too broad in nature. If we added about $20 to the existing border levy, which sits at about $25, this might make a substantive difference to the price of flights to and from Australia.

And as we all know they are our biggest market, and you'll agree with me when I say Kiwis and Aussies are very price sensitive. Even the smallest increase is projected to lead to large decreases in travel between our two countries.

The time is right to think about a levy and a whole lot of work will need to be done to ensure it is effective and efficient in its collection.

We have to ensure we don't undermine our strongest market and then most importantly what do we do with all of the money coming in? How do we divvy it up between councils, should we be strengthening our border control? Could we perhaps even divert money into the Department of Conservation, which has been absolutely devastated under National?

Let me know what you think. Rotorua has as much of a stake in this conversation as anyone else in the country.

- Fletcher Tabuteau is a Rotorua-based NZ First List MP.

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