Government cash could ease tourism strain

Labour’s plan to tax international visitors to help pay for regional infrastructure further recognises the government must help ease the burden brought by the boom.

Many mayors want meaningful intervention and investment and a clutch of small wins over the past year show parliamentarians accept something must be done.

Previous and consistent calls from the likes of the Mackenzie and Waitaki district councils encouraged the government to start what became a $25 million regional infrastructure fund.

The government acknowledged their struggle by providing for the development of carparks, freedom camping facilities, sewerage and water works and transport projects.

But our council leaders know that acknowledgement has its limits: they still have to fund half the cost of the projects themselves.

Labour’s joined New Zealand First in a fresh exploration of how regional tourism infrastructure may be funded.

Both approaches have their merits.

New Zealand First wants to bring tourists’ GST back to the regions in which it was earned, recognising the regions’ role in extracting government revenue.

On one hand, it could be an equitable solution that helps ensure visitors help pay for what was needed to service them.

On the other, it could be difficult and costly to work out where the tax was generated and how it might be applied to a fund or to individual councils.

Labour’s $25 levy would double the size of the infrastructure fund. But it would not hidden like GST: it would be an airport charge atop of others.

It is ridiculous to say visitors who spend plenty to fly here – and who expect to spend when they get here – will be bothered with a levy equivalent to a couple of beers on the flight over.

After all, visitor numbers kept climbing even after a $22 border charge was introduced in 2015.

But it is, perhaps, less ridiculous to consider whether a new levy is needed when the government has spent years cashing in from the tourism boom.

Visitors pay well-in-excess of $1 billion in GST to a year.

Their spending funds thousands of jobs that generate the wages that add to the tax take.

It has helped the government’s surplus grow to $3.7 billion, buoyed by a tax take that was $1 billion healthier than expected at budget time.

Some on local councils will look at those numbers and reflect on Wellington-directed funding that doesn’t touch the sides of what’s in the Crown Account.

They might also, with some justification, wonder why a decent slice of the GST sloshing about in the account cannot be turned into a healthy infrastructure fund.

Our politicians acknowledge the regions need help.

Help could come quickly, and with heft, well before even the most well-meaning levy were imposed at the border.