Funding fight not over
Auckland’s targeted rates saga may play out elsewhere, writes Amanda Cropp.
The scramble for tourism funding is set to heat up with other councils tipped to follow Auckland’s lead and raise money through targeted rates.
More user-pays charges, such as Tekapo’s $1-per-pee ablution block, are also on the cards as local authorities try to cover the cost of building and maintaining tourism facilities.
Auckland City’s new targeted rate - widely referred to as a ‘‘bed tax’’ even though strictly speaking it’s not - came into force yesterday, and applies to about 215 commercial accommodation providers.
It was modified to exclude holiday parks, backpacker lodges and some motels, and will contribute $13.4m towards tourism promotion and events, instead of up to $30m as originally envisaged.
Hospitality New Zealand’s general manager accommodation Rachael Shadbolt, believes other financially pressed councils will now consider going down the Auckland route to help pay for tourism facilities and promotion.
If they did, she said the Queenstown system of targeting rented holiday homes and businesses was much fairer than the Auckland approach.
‘‘Waiheke is being pinged, but Rodney is not. It’s all a bit messy.’’
Local Government New Zealand chief executive Malcolm Alexander, supports the recently announced New Zealand First policy of returning GST from international visitors to regions where the money was spent, and tagging it for tourism infrastructure.
He said the Government’s $110m tourism infrastructure fund spread over four years was simply not enough, and it was likely other councils would follow Auckland’s example.
‘‘We’ve been told to use our existing tools and that’s it, so
We've been told to use our existing tools and that's it. Malcolm Alexander.
essentially we’re confined to debt and rates, and that [includes] a targeted rate.’’
The industry is exploring the possibility of legally challenging Auckland’s targeted rate, but Alexander said the city had strong case for the special levy.
‘‘If legal action ultimately found that there’s not that power … then that accentuates the funding issue even further.’’
Troy Clarry of Whangaparaoa Lodge Motel said Auckland Council had told him to expect more information on paying the new rate in mid July, with the first bills being sent out in August.
‘‘We are not legally allowed to add it to the bills of guests. It will be charged as an extra percentage on our rates and is dependant on the size of our commercial property, not on the number of visitors passing through.
He said costs were now uncertain. A spokesman for Auckland accommodation said it was up to providers to decide how to cover the charge.
Tourism Minister Paula Bennett, is unhappy about Auckland’s decision to target the accommodation sector describing it as ‘‘piecemeal and confusing’’ for visitors.
‘‘I think an additional cost to the tourist on top of what they are paying for rooms in some places, would be seen as quite unattractive.’’
Bennett is also fed up with the Government being painted as a scrooge over the new tourism infrastructure fund announced in the Budget.
She said larger, expensive oneoff projects could receive additional funding, if there was a compelling business case.
‘‘I feel like the sector and local government should get on with spending what we have got, and presenting a good case.’’
Tekapo’s $1-a-pop toilets are expected to cover their $12,000 to $15,000 a year running costs and Bennett is all for it.
‘‘I don’t think international tourists would mind paying a small nominal fee to use a very clean and well placed toilet.’’
Blenheim businessman Chris Wagner has had a lot of interest in his user-pays KiwiCamp freedom camping pod and is hopeful some local authorities will take it up next summer.
The $200,000 ablution block has an electronic payment system for showers, laundry, power, Wi-Fi, and dishing washing, with free toilets and rubbish disposal.
Wagner opened a KiwiCamp unit at his Riverlands truck-stop four months ago and about 950 people have stayed the night, spending $6 each on average.
Wagner said that more than covered operating costs, which was a big deal for councils.
‘‘Every time they build something they have to put that in their budget for ever.’’