Tourist levy allocation is the key, says Feds

 June 15, 2018

How and where the new levy on international tourists is allocated will be the key to its worth, Federated Farmers says.

“Our position has been that funding the infrastructure to support the growing numbers of visitors to our shores should come from existing tax revenue,” Feds President Katie Milne says. 

“The report from Deloitte Access Economics released earlier this month found the net revenue gain for the government from the tourism sector is $2.6 billion a year, with half of that coming from GST.”

A new levy just adds administration and collection costs, and could put off some tourists from choosing New Zealand against some other destination.

The $25-$35 levy, collected through visa applications and a proposed Electronic Travel Authority, is due to be put in the second half of 2019.   Federated Farmers believes its spending split between tourism infrastructure and conservation work should be additional to, not a replacement, for existing spending on these activities, including the Tourism Infrastructure Fund.

“Otherwise it’s just ripping off Peter to pay Paul,” Katie says.

“Better use of user charges might be a better way to fund conservation facilities, with higher rates for international visitors compared to New Zealanders.

“We also need to deal with the fact that current Tourism Infrastructure Funding requires co-funding from councils, which can’t always afford it, and there are ongoing operating and maintenance costs for these toilets, carparks and the like that fall back on ratepayers.”

A priority for the extra tourism infrastructure funding should be the lesser populated, large geographical local authority areas, where there is a smaller ratepayer base shouldering the costs of catering for the influx of tourists.

“Well-allocated to the areas of greatest need, the additional funding could power-up the visitor experience. 

“More and better infrastructure could bring even more tourists to provincial towns and more remote areas.  That has advantages but the impacts on our rural areas and farming operations in terms of freedom camping and other activities with downsides will need to be well-monitored and managed,” Katie says.