Hard to find fault with border levy

In some respects, the Budget’s introduction of a border clearance levy seemed like a step back in time. It stirred memories of the muchdisliked $25 international departure tax that travellers had to pay until 2008. Tourism operators, airlines and airports might, therefore, have expected New Zealanders would get behind their denunciations of the new levy. If so, they were bound to be disappointed, and for reasons that seem straightforward enough. Quite simply, they were guilty of over-egging the impact of an initiative that is likely to have a minimal, if any, effect on traveller numbers.

As much was confirmed by a couple of indicators. The share price of Auckland International Airport barely budged, a sure sign that stakeholders felt untroubled by the levy. Secondly, credit rating agency Standard & Poor’s said the impact on passenger numbers through the airport would, ultimately, be limited. “We believe the additional charge would represent only a small increase on a ticket price,” it said.

That depends, of course, on the cost of that ticket. The proposed $22 charge for a passenger on a round trip, scheduled to be introduced in January, would be significant for a family booked on a budget flight to Australia. But on long-haul flights, it will pass largely unnoticed. Air New Zealand was surely drawing the longest of bows when it suggested the levy would affect this country’s competitiveness as a tourist destination. Many other countries, including Australia, Britain, the United States and China, impose a similar tax, and that of New Zealand will be at the lower end of the cost scale.

Far more likely to resonate with New Zealanders is the need to protect the country’s $3 billion a year fruit and vegetable export industry. This year’s Queensland fruit fly incursion in central Auckland was merely the latest threat, following in the tracks of tussock moths and painted apple moths. Horticulture New Zealand said it was delighted that passengers were having finally to pay a share of the costs of protecting the country’s borders. Every passenger entering New Zealand was a potential risk, and there must be checking and protection systems in place, it said.

The Government has also emphasised the userpays aspect and the lifting of a burden formerly carried by taxpayers. That seems only fair, especially as the prospect of a biosecurity breach has been heightened by the increasing number of overseas tourists, some of whom have little appreciation of this country’s vulnerability to imported pests and diseases. The levy is expected to fully meet the cost of passenger border clearance by 2017-18.

The Government says the levy will be subject to public consultation, but its intent is clear. Already, the Border Processing (Arrivals and Departures) Bill has passed its third reading. Any changes are destined to be minor. The travel industry will see this as further evidence that it has been singled out as an easy target. But if so, that is because this is a tax which is highly unlikely to cause any perceptible harm or be castigated as unfair.