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Hot Topic NBR Focus: GMO
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Tourism bed tax should include Airbnb, says report

The National Tourism Levy proposal would help small communities swamped by the international tourism boom to provide sufficient basic infrastructure, including public toilets, car parks, and footpaths.

Pattrick Smellie
Sat, 03 Dec 2016

A joint tourism industry proposal to raise $130 million a year for public facilities that tourists use should include a $2 per night bed tax and include accommodation offered through the 'sharing economy' accommodation app Airbnb, says a much-awaited Tourism Infrastructure Study released today.

Jointly funded by Air New Zealand, the Auckland and Christchurch international airports and Tourism Holdings, a major campervan rental operator, the report proposes that the tourism industry should raise $65 million in new revenues from the bed tax and a $5 increase in the current border clearance levy of around $20 per person, and that central government should match that funding dollar-for-dollar to produce $130 million a year "to develop mixed local use tourism infrastructure."

Far from funding new tourist attractions or accommodation, the National Tourism Levy proposal would help small communities swamped by the international tourism boom to provide sufficient basic infrastructure, including public toilets, car parks, and footpaths. In 20 local council areas, about $100 million of immediate investment is required, the report estimates.

Failure to provide such infrastructure will not only risk the quality of visitors' experience to New Zealand but also risks New Zealanders getting fed up with tourists, it warns. The government's $12 million Regional Mid-Size Tourist Facilities Fund announced earlier this year was "a good start but sub-scale to meet the issue".

"Local communities are feeling the effects of increased tourism and this is flowing through into local sentiment," with research finding "44% of tourism-related social media posts by local New Zealanders in 2015-16 expressing frustration with the sudden increase in tourists and their behaviours," the report says. Just six% of international visitors' posts were critical of the country.

"Rising local discontent could undermine public perception of the benefits of tourism or, in a worst-case scenario, the tourism sector's licence to operate."

Examples of places under pressure included Coromandel hotspots Hahei and Cathedral Cove, walkways and public spaces at Punakaiki Rocks on the West Coast and Huka Falls near Taupo, and "capacity constraints on transport, car parking, and footpaths in downtown Queenstown."

While it finds that some councils in high-growth tourism areas, including Queenstown and the Mackenzie Country, carry far less debt than they could, the report's recommendations steer clear of saying local government should fund solutions caused by growth in tourism, which it sees as a national issue requiring central government involvement, with equal burden-sharing from the tourism industry.

"It is unusual for an industry to advocate a new tax to be levied on itself," the report says. "We do not do this lightly or expect all members of the industry to agree."

The Tourism Industry Federation and Local Government New Zealand both welcomed the report. While its sponsors released a photograph of themselves with Tourism and Prime Minister John Key, he did not issue a statement in response today. Earlier this week, he told journalists that any such levy should be applied nationally, after Auckland mayor Phil Goff proposed a levy to support Auckland tourism.

The report also suggests user pays and public-private partnerships to encourage creative ways to defray the expense of providing publicly available infrastructure.

One suggestion is to bundle the Department of Conservation's nine Great Walks into a "single infrastructure class" owned by the New Zealand Superannuation Fund and Accident Compensation Corp, which would contract a "private consortium to design, build, finance, operate and maintain these walks."

Benefits cited were "enhanced services and visitor experience, greater cost efficiency, and better, innovative private sector-led designs."

The report found New Zealand national parks were only recovering around 5% of their average costs from user pays charges, compared with 20% in Australia, Canada and the US.

With rapid growth in international tourism arrivals already occurring, and an increase from 3.3 million this year to 4.5 million by 2022, central government should be willing to invest because of the major boost it was experiencing from tourism tax revenues, including total annual GST at present of around $2.8 billion.

(BusinessDesk)

Pattrick Smellie
Sat, 03 Dec 2016
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Tourism bed tax should include Airbnb, says report
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