Let’s rethink tourism tax debate

A local tax is unfair on business sector already paying more than its share and benefiting the state, says Marti Zucco

IT’S easy for those looking in to say tourism is placing a strain on Hobart City infrastructure, and tourists should be taxed to pay for that.

There is lots of talk about other cities and New Zealand. New Zealand has a federal government and regional councils and no state government structure. The New Zealand tax is a federal tax, not a local tax, and has an exemption for Australians.

So to compare New Zealand tax to Hobart is not comparing apples with apples.

If our Federal Government imposed such a tax it would be similar to New Zealand, and hopefully those funds would be directed to states, cities, regions and towns. I would say that is fair and equitable.

If a state government imposed a tourist tax or an airport tax that would be equitable across the state — if all the funds collected were put into infrastructure rather than consolidated revenue.

If a local authority imposed a tax, inequity, and a lack of understanding of rates needs to be understood.

Yes there are many cities that tax hotels and tourists but to my knowledge none in Australia. The question could be asked as to why Hobart couldn’t be the catalyst and why Hobart ratepayers should pay for infrastructure used by tourists. I also believe in a user-pays principle but imposing a local tourist tax is not taking into account a vast number of variables.

RATES

The Hobart City Council rate base is 85 per cent residential and 14 per cent non-residential (mostly business and tourism). One would think that the rates revenue breakdown would be based on that percentage. This is not the case. From the entire HCC rate base, 56 per cent comes from the residential sector and 44 per cent comes from the non-residential sector. The non-residential sector, being the business sector, of which a vast percentage is hospitality and tourism based, is paying over and above its fair share of rates, which one would say is going towards paying for the infrastructure of the city.

INDIRECT BENEFITS

Hobart and Tasmania are experiencing what is said to be a boom, due to the popularity of tourism, with Mona the catalyst. So who is benefiting from this boom? Is it only tourism? Let’s face reality. It’s not only the tourism industry. The indirect benefits to the state are enormous.

The booming housing market has seen homeowners prosper from increased valuations and sales. Those in the residential sector have benefited from the tourism boom. Yes there are downsides to the boom because it is harder to find affordable housing and rentals, but that’s a separate issue that needs addressing and can be addressed. We have the nonresidential sector subsidising the residential sector, a boom in tourism and interest in the city and state, but a “local tax” has been proposed for the hospitality and tourism sector alone to fund infrastructure?

The business sector is already over-funding infrastructure through its rates as it is. The tourism boom is not just Hobart based. The whole southern region is benefiting, as is the state, so if there is a tax it needs to be state based not locally based.

CRUISE SHIPS

There is so much talk about the cruise ships coming into Hobart and their impact on infrastructure. There are many subsidies provided by the State Government and HCC to various bodies and event providers to encourage tourism. The cruise ships are not given financial incentives to come into Hobart port. My understanding is that they pay all port fees and many buy Tasmanian produce, which benefits the regional and state small business sector indirectly. So every cruise ship dollar spent in port is not being subsidised, in what can be considered as a bonus for the city and state. If $187 is spent on average by each person from cruises, this generates economic activity, employment and benefits the city without the need for subsidies.

USER-PAYS PRINCIPLE

Port Arthur was once free to visit. Now all visitors pay an entry fee. Mt Wellington is in

need of infrastructure improvements if we are to maintain growth. An entry fee would go a long way in repaying maintenance costs which are paid for by Hobart ratepayers. With about half a million visitors a year, that is another discussion that needs to be had. THE TOURISM CONUNDRUM After years of being left off the map and on the bottom of the pile for years — an awardwinning TV ad in 1992 suggested “putting Tassie on top” — now that the golden egg has been delivered with Hobart and Tasmania being the envy of the country, we don’t send messages that tourists are not welcome or put obstacles in the path of those considering visiting. Those who struggled through the 1990s and the early 2000s would know how difficult it was business-wise in that time.

If Australia introduces a tourist tax similar to New Zealand that will see Hobart and Tasmania on equal footing as a destination, then so be it. If Hobart is the only place in Tasmania that implements a tourist tax that is not a smart solution to our boom

We are finally on the map. Let’s not do a Humpy Dumpty and see our gain have a great fall. The beneficiaries of tourism are not only those directly involved. It is far wider than tourism alone.

Poor infrastructure is due to the lack of investment by former governments and local authorities. There are reports as far back as the 1970s about the need for infrastructure investment in Hobart and Tasmania, and many reports since then that have never been acted upon. This was prior to any so-called tourism boom.

Local government does not have the legislative power to implement a tourism tax and the State Government has already indicated that it has no intentions of doing so.

The business sector, of which a vast percentage is hospitality and tourism based, is paying over and above its fair share of rates