A visitors' levy

The concept of charging foreign visitors a levy has again been raised by Tourism Minister Damien O'Connor, writes The Press in an editorial. This year, he floated the idea of what he has termed a "green tax" and received a tepid response from the industry. But in a speech this week at a tourism conference in Christchurch, he revisited the issue, claiming that more than half of tourist businesses now favour the proposal. O'Connor's levy idea deserves serious consideration, but the money raised should be spent on tourist facilities rather than on more general conservation purposes.

Tourism is worth about $20 billion a year to this country, making the industry New Zealand's top export earner, and the annual increase in international visitors is expected to be 3.3 per cent over the next seven years. This is undeniably positive for the economy, but it does add to the demand on tourist-related amenities, especially for smaller councils which have low rating bases.

At times there has been annoyance from residents, who are called on to pay for facilities that are primarily for the benefit of tourists, especially overseas visitors who do not contribute directly to New Zealand's tourism infrastructure through rates or income tax.

Various methods for charging tourists have been suggested. A bed tax, as used in some overseas countries, has been mooted most often, but this would have numerous drawbacks.

It would add to the compliance costs of accommodation providers and it would not catch foreign visitors who use tourist facilities but stay in private homes or campervans rather than in hotels or motels.

Also, a bed tax is too often seen as a means of raising money to restrain local council rate rises, rather than to meet the costs directly associated with rising tourist numbers.

O'Connor's proposal that international visitors be charged a levy which would be included in their airline-ticket price is a better approach, since it would be a one-off charge when they paid for their flights. He argues that a levy of between $10 and $25 would raise $24 million to $61 million a year.

In addition to building facilities at tourist spots, O'Connor says the money raised could be used for conservation. But to ensure that tourists accept the rationale for the levy, it would be better to confine its use to physical facilities, such as toilets, waste disposal and vehicle parking, to ensure that visitors can see more directly where their money has gone and to keep the size of the charge to a minimum.

The precise amount of the charge would need to be finely judged. It must be set at a rate which recognised the direct and indirect economic benefits of tourism, and did not become a disincentive to visit this country.

Administrative simplicity must also be encouraged, to minimise the bureaucratic requirements which airlines or travel agents would face, a goal made more difficult if, as is likely, New Zealanders returning home were not subject to the ticket levy.

The levy proposal still needs much work, especially if it is to be embraced across the industry but, as a general principle, the idea is worth pursuing. International visitors should not be regarded as cash cows for local councils, but it is appropriate to charge a modest levy for the infrastructure built mainly for their needs.

- © Fairfax NZ News

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Heather   #3   05:26 pm Jan 28 2009

Yet another example of revenue gathering masquerading as an offset to so called 'global warming.'

To comment more broadly, global warming has been an extremely convenient truth for the big corporations who save millions each year by, for example, not producing plastic bags, or charging customers for them. How much of that saving goes to the environment? How about the supermarkets (etc) actually produce environmentally friendly packaging at THEIR expense rather than shunting it onto consumers?

ray clarke   #2   05:26 pm Jan 28 2009

This Levy, Tax, call it what you will by the present Labour Government will not stop at inbound tourists at all. The Government is always on the lookout to introduce yet another new or increases levy in the same vien as if it were an excercise in Taxation. When the overseas visitors find out about this then the drop off will occurr and goodness knows New Zealand is desperate enough for Trade dollars. The Government will bow to pressure and apply this to Kiwis returning home from a visit to family across the ditch.

Richard Cowin   #1   05:26 pm Jan 28 2009

A typical beauracratic shortsighted kneejerk reaction. The money should be raised from the people who benefit from the tourists, by providing a destination worth visiting without ripping-off the tourists as happens now. They come a very long way to get here and spend their money, lots of money! Greed upon greed, is this our new motto? old joke...Lake Wakatipu is the only lake in the world to have freshwater sharks...trouble is they all live on the banks ! There is more than a hint of truth in it. We don,t go anywhere near a tourist area, we can't afford to.

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