NEW ZEALAND: Government's New Travel Tax Is Ludicrous

A tourism leader has branded New Zealand Government's new travel tax as ludicrous and hypocrisy.

Tourism Export Council of New Zealand chief executive Lesley Immink said the tax - up to $26.22 - was an unfair cost for the tourist industry which is becoming more important as a foreign funds earner as dairy returns plunge.

"If I was a cynic I would say the Government is in a panic regarding getting back into surplus and decided that an easy [way] to get more money into Treasury is to tax international visitors," Immink said.

"Basically they took the public-funded $100 million from Customs and the Ministry of Primary Industries for their coffers, and imposed on these agencies to get cost recovery via a border tax."

The Government agencies are now consulting interested parties on what the Government says is a "Border Clearance Levy" to fund more work done by Customs and by MPI as the number of arriving air passengers increases to 5.2 million a year.

It hopes to raise more than $103 million a year to directly fund the work, a move welcomed by fruitgrowers worried about more pests coming into the country.

The proposed maximum amount payable for a cruise ship traveller on a round trip is $26.22 and for remaining travellers is $21.85.

A Cabinet paper says it is unlikely to stop people travelling.

But Immink said the law change permitting the new tax was rushed through under urgency that forced airlines into doing the collection without any consultation.

"Biosecurity is a public good like the police and we don't charge international visitors if they need the police so why should they pay for biosecurity."

The Government had criticised other countries for increasing border taxes and now had done the same.

"It smacks of hypocrisy with our Government criticising Australia and the UK for their border taxes and then deciding without consultation to impose this tax."

Overseas visitors already paid $700 million in GST and New Zealand was one of the few countries in the world that did not allow visitors to claim back when they left.

Travel agents are also upset, saying they had told MPI and Customs they were "dismayed" at the lack of consultation.

The chief executive of the Travel Agents Association, Andrew Olsen, said the tax was a bad idea.

There were considerable issues yet to be resolved such as the whether the tax was directly related to cost recovery of border control, how the visitor experience would be improved, what exemptions or variations of rate there would be and whether Customs would be ready to bill the airlines and cruise ships.

"Had they consulted first, legislated later the vast majority of these issues would be resolved," Olsen said.

Airlines have said the tax was a breach of the understanding that was reached in 2003 - which is simple and logical.

The Board of Airline Representatives said airlines already bear the full costs of aviation safety, which is deemed to be for the benefit of airlines and their passengers.

In return, the Government bears the costs of Customs, which is deemed to be for the benefit of the public, who already pay through their taxes.

The Government also bears the costs of agricultural screening, which is deemed to be for the benefit of the primary industries.