Divisions over new visitor tax

THE South’s mayors are sharply divided on the benefits of the Government’s new visitor tax.

Queenstown’s Jim Boult says it will raise nowhere enough for the town that has been swamped under the tourism boom. He has repeated calls for a bed tax that would deliver money more directly to the community.

But mayors of districts with a big tourist load and a much smaller accommodation industry have supported the Government’s move.

Tourism Minister Kelvin Davis yesterday announced plans for a levy on international visitors to help ease the cost to communities for tourismrelated infrastructure.

Rapid growth in the industry — international visitor arrivals are expected to reach 5.1 million by 2024 — meant many regions urgently need improved infrastructure, from toilet facilities to car parks.

Mr Boult yesterday described the levy as ‘‘disappointing’’.

‘‘I’ve said all along I thought a border levy is the wrong way to go.

‘‘A bed tax is a far more equitable and effective solution to the issue.’’

Mr Boult said if 50% of the $57 million to $80 million expected to be raised annually went to conservation, that left $40 million at most for the whole of New Zealand to address infrastructure issues.

‘‘We need that amount on our own.

‘‘By the time everybody gets their equitable share I suspect it will be a very small amount of money that comes to us, and does not go anywhere near addressing the issue.’’

Mr Boult said he would continue to lobby the Government for a bed tax.

Mr Davis responded yesterday any possible introduction of a bed tax was outside his area of ministerial responsibility.

However, Mr Davis did not rule out the possibility.

Mr Boult was backed up to an extent by acting Dunedin deputy mayor David BensonPope.

Cr BensonPope said the visitor tax was long overdue, and ‘‘a really good start’’, but a bed tax should be brought in, too.

‘‘Clearly, that will put funds into specific communities, the ones that are facing the pressure.

‘‘I think we will need to do both.’’

Waitaki Mayor Gary Kircher said his council supported the idea of a visitor levy.

‘‘It’s pretty much exactly what we’ve been asking for.’’

Mr Kircher said the tourism infrastructure fund, which provides up to $25 million a year for tourismrelated infrastructure, had helped with capital costs of infrastructure, but operational costs still needed to be paid for.

Those costs disproportionately hit districts like Waitaki, which had plenty of tourists, but not as many bed nights as somewhere like Queenstown.

Central Otago Mayor Tim Cadogan said his area had high tourist numbers but a smaller hotel industry, so ‘‘a bed tax doesn’t really work for us’’.

A visitor levy was better for his district, though ‘‘the devil’s going to be in the detail’’ in terms of how it was distributed.

‘‘The border levy is just one tool in the kit. It’s not the magic bullet that’s going to solve all our problems.’’

Clutha Mayor Bryan Cadogan described the levy as ‘‘a step in the right direction’’.

But he said his district had big issues with a ‘‘fledgling tourism industry’’ that could not support required infrastructure.

He also said the devil would be in the detail regarding how the money was distributed.

‘‘If it’s focused on the main centres it would be a tragedy.’’

Southland Mayor Gary Tong said tourism had a ‘‘very, very intense’’ effect, from Fiordland to Stewart Island through the rest of the district.

He supported the levy, but planned to wait and see what came to his region.

TOURISM industry executives have just a month to submit their ideas to the Government on its plans for an international visitor levy.

Consultation opened yesterday and closes on July 15 — a short turnaround but one clearly signalled by Labour at the last election.

Announced by Tourism Minister Kelvin Davis, the revenue raised from the levy will be spent on tourism infrastructure and conservation, including visitor facilities on conservation land, construction activity and other tourismrelated infrastructure.

The local infrastructure on which the money may be spent include amenities such as toilets, car parks, water supply, playgrounds and walking tracks.

Conservation will also get part of the money raised to support activities such as predator eradication, breeding programmes and native planting.

Southern tourist destinations, such as Tekapo, have been asking for help to build visitor toilets to counter the mess left behind by freedom campers and visitors passing through the town.

Omarama, which sits at the crossroads of one of the busiest stretches of road for tourists, needs help in funding amenities to satisfy its growing volume of visitors.

Mr Davis says it is only fair visitors make a small contribution to help provide the infrastructure they need and better protect the natural places they enjoy.

There is no argument about the need for money to be spent upgrading some of the tracks and destinations favoured by visitors to New Zealand.

Nearly half of international visitors state the top factor in considering visiting New Zealand is the spectacular landscapes and natural scenery.

Visitors spending time in the outdoors spend more, visit five to six regions and have an average spend of $4800, documents released yesterday show.

Anyone who has met up with a tour party at a premium tourist destination will understand how important it is to provide facilities to cope.

Tourism industry executives believe international visitors will be more accepting of being charged to come to New Zealand if they can clearly see the money is going to support infrastructure and services to improve their visit.

The key priority of the new charge is ensuring the revenue is directed to where it can do the most good.

Mr Davis is saying the levy will be set at between $25 and $35 to raise between $57 million and $89 million. Collecting the levy through the immigration system is the preferred approach because it allows for accurate targeting of international visits and costs little to administer. Establishment costs are estimated at $1 million and there are minimal ongoing expenses.

However, the one aspect missing from the documents released is how to cope with the burgeoning number of visitors swamping Queenstown and Wanaka. Both have a small ratepayer base but a huge number of tourists.

Queenstown Lakes Mayor Jim Boult, himself a veteran of the local tourism industry, still favours a $10 bed tax in his local authority area, arguing the levy will only provide a miniscule amount of funds to the Queenstown Lakes District. A bed tax may possibly raise $40 million, collected by local hotels, and go a long way to providing facilities such as parking, toilets, and facilities to cater for all realms of tourism.

This seems to be the part of the tourism equation Mr Davis and Conservation Minister Eugenie Sage do not comprehend, although they do say they are determined to support councils and operators to continue to prosper and provide jobs the country needs.

Improving attractions in Otago and Southland, parts of which are already major tourist destinations, is a fine idea. The only recourse smaller local authorities such as Queenstown Lakes and places like Te Anau and Milford have to support their infrastructure needs is to increase rates from a small rating base.

This is a balancing act for the Government. The need to fund tourism infrastructure is clear, but whether taxing visitors contributing to the country’s largest export earner is a good idea is as yet unknown.