Friday, 2 December 2016

NEW ZEALAND: $130m Fund To Pay For Tourism Infrastructure Sought By Tourism Officials

A bed tax and increased border levies are proposed to help raise $130 million for tourism infrastructure.

A report released today calls for a 2 per cent national levy on all accommodation including campervans and Airbnb, and a $5 increase in the border levy (currently $20).

It comes just days after Auckland mayor Phil Goff suggested a visitor tax to raise up to $30 million to pay for city marketing and major events.

The report was commissioned by the chief executives of Air New Zealand, Christchurch and Auckland airports and Tourism Holdings to promote debate on funding options.

It estimated $100m needed to be spent immediately across 20 local authorities where the rise in visitor numbers had outpaced their ability to provide infrastructure such as roads, carparks, toilets and environmental protection.

The proposed levies would raise $65m a year from the industry with matching funds from the government taking the total to $130m a year.

The report said the government could cover its contribution from an estimated $2.8b annual in GST paid by tourists, growth in returns from tourism-related businesses such as this year's $145m special dividend from Air New Zealand, and taxes paid by the tourism industry.

It also suggested an independent Crown entity be formed to allocate the money.

The study commissioned by the four industry leaders focuses on infrastructure which is used by both locals and tourists, and is primarily owned by local or central government.

According to the study 33 local councils did not increase infrastructure spending in line with growth in visitor stays, and 13 council had actually decreased infrastructure spending despite visitor growth.

Local Government New Zealand president Lawrence Yule said his organisation had backed the idea of a tourist levy for some time but it was important the money was spent where it was really needed.

"Which is not only on toilets, freedom camping facilities and car parks, but also on major infrastructure like wastewater, which are some of the most costly pieces of work small communities are faced with.

"Making sure the ongoing maintenance and operation of facilities is funded is also critical - it's not just about building it."

Hospitality New Zealand general manager accommodation Rachael Shadbolt welcomed further discussion on national visitor levies.

"We're heartened that they've cast the net wider into campervans and non commercial accommodation providers. I still think this conversation needs to go wider than just accommodation. It needs to be a discussion about how all businesses who benefit from tourism contribute towards this fund."

Wellington airport chief executive Steve Sanderson supported more infrastructure investment but opposed a border levy on all travellers including New Zealanders.

"It needs to undergo a rigorous and robust analysis before proceeding."

Tourism Industry Aotearoa (TIA) chief executive Chris Roberts said a national solution was preferable to a range of local and regional approaches and it was a matter of sharing the cost fairly.

"There are opportunities for greater user pays and better use of council balance sheets. But there is also a valid argument that the industry and its customers should contribute to ensuring tourism can sustainably grow,"

TIA is doing its own assessment of tourism infrastructure priorities and expected to release the results early next year.