Labour announces $25 visitor levy

Visitors to New Zealand will have to pay an extra $25 to enter the country under new Labour Party policy; The $75m a year will go towards growing tourism industry, conservation

28th Aug 17, 2:39pm by Alex Tarrant

International visitors to New Zealand will have to pay an extra $25 entry fee if Labour leads the next government.

The party's tourism spokesman Kris Faafoi on Monday announced that Labour expects the charge to raise $75 million annually. Three million tourists visited last year, Labour noted. New Zealand citizens and residents will be exempt.

The levy will be above and beyond the $22 border clearance levy announced by National in Budget 2015.

A Labour Party spokesman confirmed to Interest.co.nz that the levy would be all encompassing (outside of NZ citizens and residents) - so short-term business visitors, for example, would also be required to pay the new levy.

Labour said 60% of the expected $75 million a year would be put towards initiatives to grow the tourism industry. The remaining 40% would be earmarked for biodiversity and conservation efforts.

Labour noted that tourists spend about $10 billion a year in New Zealand. There have also been calls for tourist GST spending to be given back to local authorities running the regions in which money was spent. The policy is favoured by Local Government New Zealand, who argue it could contribute $1.5 billion annually to tourism infrastructure upkeep, and the New Zealand First party.

Last week, National's Conservation Minister Maggie Barry announced a hike in Great Walks prices for foreigners in a bid to raise $4 million a year for maintaining the walks and conservation projects.

Read the release from Labour below:

Labour will establish a Tourism and Conservation Infrastructure Fund that will invest $75m a year into supporting the vital tourism economy, says Labour’s Tourism spokesperson Kris Faafoi.

“This will be funded by a $25 levy on international visitors.

“Tourism’s success means we need more infrastructure to serve all these visitors, especially if we want to attract high-spending tourists who will increase the value of the sector to the New Zealand economy.

“From Northland to Southland, councils are facing increasing pressure to support growing numbers of tourists without the funds to do it.

“It’s time for the Government to help ensure we deliver a world-class experience to tourists, without unfairly burdening local communities.

“The Tourism and Conversation Infrastructure Fund will contribute $45m a year to tourism infrastructure and training, with a particular focus on high demand areas. It will also invest $30m in protecting and enhancing our natural environment, as well as the infrastructure tourists use on conservation land.

“It’s only fair that the cost of these important projects is recouped from the international visitors that enjoy them.

“There’s no evidence that a levy of less than one per cent of what the average tourist spends in New Zealand will hurt tourism. In fact, after National introduced a $22 border charge, passenger numbers rose faster than expected.

“The Tourism and Conversation Infrastructure Fund will ensure New Zealand has the infrastructure and attractions needed to support tourism, and that our natural treasures that bring so many visitors here are protected and enhanced for future generations,” says Kris Faafoi.

A fact sheet accompanying the release states:

More than three million people a year come from all over the world to visit New Zealand. They enjoy our unique natural beauty, culture, and Kiwi hospitality. International tourists spent $10b here last year, supporting more than 300,000 jobs.

Tourism’s success means we need more infrastructure to serve all these visitors, especially if we want to attract high-spending tourists who will increase the value-add of the sector to the New Zealand economy.

The strain on infrastructure and the funding problem are clear. Councils and the Department of Conservation receive little of the financial benefit of tourism, but have to supply the infrastructure tourists use, and smaller councils often do not have the rating base to fund the necessary investment. From Northland to Southland, councils are facing increasing pressure to support growing numbers of tourists without the funds to do it.

It is time for the Government to help ensure we deliver a world-class experience to tourists, without unfairly burdening local communities.

Excluding New Zealand citizens and residents, three million people visited New Zealand last year, meaning a $25 Tourism and Conservation Infrastructure Fund Levy will raise $75m a year.

60 per cent of the Fund ($45m per year) will be used to grow our tourism industry and 40 per cent ($30m per year) will be used to protect our biodiversity and ensure conservation is properly resourced.

The $45m per year for growing the tourism industry will be split with 60 per cent going towards funding tourism infrastructure projects ($27m per year), 20 per cent to training ($9m per year) and the remaining 20 per cent for support in high demand areas like Queenstown ($9m per year).

The $30m per year for conservation will be used to increase biodiversity funding and for conservation infrastructure.

It’s only fair that the cost of these important projects is recouped from the international visitors that enjoy them. This will help take pressure off local communities and councils from increasing visitor numbers.

With international visitor numbers projected to grow each year by 5 per cent or more than 150,000, this approach means funding will automatically be created to meet the growing need.

There is no evidence to support the claim that a small tourism levy will affect tourist international numbers.

International visitors spend, on average, more than $3,000 each in New Zealand and more than $1,000 on international airfares. The $25 Tourism and Conservation Infrastructure Fund Levy will add less than 1 per cent to this and is far less than the variability in airfares. After the current Government introduced a $22 border levy, visitor numbers were not impacted at all – in fact, they rose more quickly than expected.

The Tourism and Conservation Infrastructure Fund will ensure New Zealand has the infrastructure and attractions needed to support tourism, and our natural treasures that bring so many visitors here are protected and enhanced for future generations.

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59 Comments

by mrp | 28th Aug 17, 2:57pm 1503889045

agriculture in ETS, water tax, CG tax, tourist tax, fuel tax, google tax... list goes on

what a true NZ tax party

by Foxglove. | 28th Aug 17, 4:44pm 1503895483

Hate to say I told you so, but I told you so. Labour are tax happy. Will tax NZ to a standstill. Stop them, vote NZF!

by Kate | 28th Aug 17, 7:13pm 1503904391

Recent poll regarding the water tax policy;

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11912604&…

Very interesting that support from males is significantly higher than females - although in both cases well over a majority are in support - and that's nationwide.

by Rob | 28th Aug 17, 5:20pm 1503897635

The thing about new taxes, is that once they are in, they can be expanded and rise. I do believe in taxes, to pay for things, and I am not saying that some of these taxes aren't a good idea to better balance the tax systems. But they seem to be piggybacking other things on the back of these taxes. For example the water tax, the mood seems to be that NZers want to tax water that is exported. It appears National want to introduce such a tax too. However Labour want to also apply this tax to farmers who use water, which is going well beyond what I believe the mood of the country wants. So we may end up paying more for food as a result, as someone has to cover that increased cost, no matter how small.

by Boatman | 28th Aug 17, 5:36pm 1503898600

They only thing they have not figured out how to tax is your personal sex life , but wait for PAYF , its coming

by pin3cone | 29th Aug 17, 9:24am 1503955459

Why do people act like the sky is falling when taxes are imposed? One only has to look at the Nordic countries to see that high tax rates don't mean the end of the world.. in fact they're commonly reported as having the highest life satisfaction rate in the OECD.

by kane02 | 28th Aug 17, 2:57pm 1503889076

crickey another tax. whats that 5 so far?

geez no point working if labour gets in

go Taxinda!

by mfd | 28th Aug 17, 4:06pm 1503893160

How does a fee for tourists affect your desire to work?

by kane02 | 28th Aug 17, 4:35pm 1503894902

its called dampening demand.

make a country an expensive place to visit, and tourists take their $$$ elsewhere.

Do this enough and tourism dies, and with it so do jobs.

by WellGeared | 28th Aug 17, 4:47pm 1503895634

Clever decision....
The labour party knows that tourists cannot vote. Kiwi voters will not think too far either. They will not worry about its impact on inbound tourist numbers or its effect on greater economy.

by mfd | 28th Aug 17, 4:47pm 1503895669

Technically I agree, but I don't see $25 as material compared to the cost of a holiday here. This is already an expensive destination. I'd have preferred to see the total take going towards conservation funding in order to preserve and restore the very things that people are visiting NZ to see.

by RickStrauss | 28th Aug 17, 5:06pm 1503896785

It doesn't seem to stop people traveling to Bali, where it's US$35.

by Rob | 28th Aug 17, 5:22pm 1503897769

That is true to an extent. But $25 isn't going to be enough for that to happen, as the bigger problem getting tourists to NZ is simply the large distance and time it takes. Also NZ is fairly expensive compared to the rest of the world for things such as food and accommodation.

by KH | 28th Aug 17, 7:30pm 1503905404

As usual we have been sticking to our usual business model of selling ourselves too cheap. I'd be happy for it to be $25 per day for each and every day they are in the country. Still not going to vote Labour but.

by sharetrader | 28th Aug 17, 9:49pm 1503913746

that has more to do with our high dollar

by Kauri | 29th Aug 17, 7:01am 1503946905

Not all tourism dies, only the low cost tourism that survives on low wages and makes us all poorer. I say kill that kind of tourism.

by RickStrauss | 29th Aug 17, 8:23am 1503951780

John Key says levy 'won't make a blind bit of difference' to tourist numbers.

As John Key notes:

"Either the taxpayer pays for it, or the user pays for it. Given half of it's gonna be paid by foreigners coming to New Zealand, I would have thought that'd be an appropriate place to put that."

Good for the goose, good for the gander, surely? Are we to doubt the word of good honest John Key in assessing the impact of a border levy (Not tax! Let's be clear) on tourists paying thousands for an airfare to NZ?

by linklater01 | 29th Aug 17, 3:41pm 1503978115

kane02,

And your evidence is? Have you visited the US recently? There are lots of extra taxes and you pay to visit the National Parks.
Do you really believe that $25 is going to shut down tourism? Poor amenities and environmental degradation is much more likely to affect it.

by Washdoesn'twash | 28th Aug 17, 3:09pm 1503889750

National increased GST by 20% in 2010, How many $25 hits have you sucked up since then?

by kane02 | 28th Aug 17, 4:40pm 1503895218

get (indirect tax) is a really efficient way of collecting tax, as opposed to direct (personal taxes)

It also deals to the "black economy".

Tourism tax, bed tax leaves a sour taste in the travellers mouth. A negative experience may well mean they dont come back.

by mlpc | 28th Aug 17, 4:52pm 1503895922

But they decreased other taxes.
All Labour seem to want to do is add tax after tax.

by Boatman | 28th Aug 17, 5:41pm 1503898878

Yes GST went up but PAYE came down , by a lot more

by Lapun | 28th Aug 17, 3:43pm 1503891836

Does it set a precedent? If a tourist pays a tax on arrival that contributes to the tourist sites the tourist may or may not benefit from at a later date then the same concept could apply to immigrants like myself. Permanent residency was a decade ago and since then my family has benefited from schools for 3 children, subsidised university for 3 of us, one major surgery followed by 9 months of intermittent but very high quality hospital care, WFF benefit, short term unemployment benefit, superannuation, new motorways, and a major new sewer and stormwater, etc. We pay our taxes so we probably pay enough to contribute our share of the cost of the teachers and the new infrastructure; given a few years we may even pay tax that equals the cost of superb hospital care.
What we have never paid for was the infrastructure, the schools, the medical facilities and all the costs of training the teachers, doctors and nurses that existed on our arrival.
We are very grateful immigrants but I do think a modest tax should be applied to each granting of permanent residency. I wouldn't mind it being backdated to the day before my arrival.

by Donald Ellis | 28th Aug 17, 4:54pm 1503896095

A generous offer but, as you rightly say, you have already contributed to hard and soft infrastructure that you will never see the benefit of.

In our endless obsession with trying to sheet home the costs of public goods to the "correct" beneficiaries we tend to forget that we have always run a sort of "what goes around comes around" arrangement with public works. We have all benefited from the capital raised off previous generations to build schools, roads, water supplies etc, and through our taxes and rates we are helping pay for stuff our grandchildren will benefit from.

Failure to understand this simple principle is why Auckland has become more and more sclerotic over the last couple of decades.

by Lapun | 28th Aug 17, 8:38pm 1503909488

Not that generous - I didn't come to NZ to make money from property but it happened anyway.

The point is every child and every new immigrant is given a large legacy from earlier tax paying Kiwis. We should appreciate it.

by KH | 28th Aug 17, 9:41pm 1503913270

Interesting and good point Donald. Infrastructure is a daily cost in a way because there is always something to do or replace. I for one would be happy to pay for that as it is incurred. Without raising debt, in practice it means it would be steady rate for my lifetime. I really am very happy to contribute that without ensuring benefit to myself is individually itemised. I am very happy for the populace to gain benefit from them when I am gone without working out who gained and who lost.
Good point about Auckland self strangulation too.

by Donald Ellis | 29th Aug 17, 7:42am 1503949367

KH, that is pretty much how it works today - at least in councils. Your rates include a hefty dose of depreciation which is turned immediately to replacement of tired infrastructure. Debt is largely taken on when assets have to be upgraded (made nicer to satisfy some government regulation) or new assets are needed (for growth).

Ordinary turning over of existing infrastructure is well taken care of.

by Donald Ellis | 28th Aug 17, 4:21pm 1503894103

If they keep it up, these guys are going to rival the Third Labour Government for whacky policies. (Anyone remember MRP?)

The idea of getting someone else to pay will play well domestically but we should bear in mind that we collect $1.5bn in GST off a $10bn spend. On top of that tourists pay large amounts of fuel tax and road user charges either directly or indirectly. Every business that makes most of its money from tourism is likely paying rates that would have to be spread over other ratepayers if it weren't for tourists. So let's just say that tourists already contribute huge amounts of money to the public coffers.

It's not like we are struggling overall to fund the public services related to tourism:

- the whole of Vote Tourism is about $115m
- the whole of Vote Conservation is about $465m
- extra roading costs like the road to Milford Sound are paid for through fuel taxes

Even allowing for some extra expenditure on police, foreign affairs and the like the government makes a healthy profit off tourists. It has only reluctantly been forced into making some one-off capital grants to small councils that struggle to provide public services to tourists in their area.

A new government could simply allocate that money more fairly. We don't actually need to shake down tourists any more than we already are.

by RickStrauss | 28th Aug 17, 4:46pm 1503895560

That fact is we're falling behind on infrastructure. I pay US$35 to go to Bali, and I've no objection to someone paying NZ$25 to contribute to infrastructure here.

by Donald Ellis | 28th Aug 17, 4:59pm 1503896364

I think my point is that tourists are already paying for new roads, water services etc through the taxes, rates and road user charges they already pay (directly or indirectly). The government already makes a healthy profit off those taxes. If we are falling behind on building infrastructure to cope with the impacts of tourism then it is because the government has been diverting tourists' money to Bellamy's and Koru Club memberships.

by RickStrauss | 28th Aug 17, 5:05pm 1503896738

Yeah, fair point. It also depends if taxes tourists pay via everyday spending is equal to the load they put on infrastructure too - not only if the taxes they are contributing are being fully allocated toward infrastructure (probably unlikely, as a significant amount is probably GST on food).

by Rob | 28th Aug 17, 5:26pm 1503898000

But they are only paying it for a very short period of time, and only pay it when they are here. So they do create a peak demand on the infrastructure, which then requires additional infrastructure to cover them while they are here. So really you could look at this fee as a $25 premium tax to cover the additional infrastructure while they are here. When they aren't here, we then have an excess of infrastructure that existing tax payers have to pay to maintain. eg wider roads to cope for high demand, which require more maintenance.

by Ralph | 28th Aug 17, 6:02pm 1503900150

".. only paying it for a very short period of time.."

Good point Rob. Perhaps we could charge a capital gains tax on the value increase of their home for the period of time they are in NZ?

by Donald Ellis | 28th Aug 17, 6:35pm 1503902156

Rick and Rob

As far as roading goes tourists are just cars and buses on the road same as everyone else. I wouldn't want to really model this one as it is just as likely that tourists use roads during non-peak times as much as they create larger peaks than we would otherwise have. Where you may have an argument is in two places: tourist roads (eg Milford Sound) and city streets.

Bearing in mind that I find it difficult to allocate more than $500m back to the direct government costs of supporting tourism that leaves a profit of $1bn in GST alone that could already go to funding those tourist roads (and it won't be anything like that on an annual basis). And the government is so confident about city streets that they have cut their subsidies to councils for roading over the last few years.

In water services most businesses that service tourism (hotels, motels etc) pay some variation on a volumetric charge for water and sewer.

I don't really buy the peak infrastructure argument but even if there was there is something like $1bn paid in GST alone each year that the government quietly siphons off to other purposes such as tax cuts. If we have a problem with tourism-related infrastructure then we already get enough off tourists to fix it.

We can be honest about facing up to how to fund the public services residents consume without sneaky little cross-subsidies that hide the truth.

by Noddy | 28th Aug 17, 7:58pm 1503907083

Just to clarify, you pay US$35 if you select a renewable visa which allows you to extend your stay in Indonesia for more than 30, and up to a maximum of 60 days. If you are on holiday for less than 30 days, you do NOT pay for a visa to enter Bali or anywhere else in Indonesia, you just have to leave the country before your free visa expires.

by two otherguys | 28th Aug 17, 7:31pm 1503905480

Touristas may well be paying $1½ billion GST on a $10 billion spend - but very little if any finds its way to the tourism coal faces ie Freedom Campers toilet facilities and Westport and Queenstown

by Donald Ellis | 28th Aug 17, 8:41pm 1503909676

Absolutely right. But as I keep saying its not that the money isn't already collected off visitors to the country it's that the government is keeping it all to themselves. There is no justification for charging more taxes; tourists are already more than paying their way.

by sharetrader | 28th Aug 17, 9:55pm 1503914153

that's the downside of GST, what is collected in a certain provence does not all return unless a central politician need to sweeten that area.

by Kate | 28th Aug 17, 4:21pm 1503894078

Very sensible - and it looks like that boarder clearance levy might be a bit on the high side due to higher traveller numbers than anticipated in it's first 6 months of operation;

As a consequence, memorandum accounts are in surplus as at 30 June 2016, with the
Customs balance of $1.47 million and MPI balance of $1.12 million. As a percentage of total
revenue, these surpluses equate to 4.6% for Customs and 3.2% for MPI.

http://www.customs.govt.nz/news/resources/bordersector/Documents/BCL-co…

But of course since then we have had the mycoplasma bovis incursion in Southland recently, so having a memorandum account to carry forward surpluses is a good idea.

by Ralph | 28th Aug 17, 6:04pm 1503900269

I particularly liked the way you used the word "levy" and not "tax".

At least someone is thinking around here.

by mlpc | 28th Aug 17, 4:47pm 1503895659

Let's tax this!

by Foxglove. | 28th Aug 17, 5:07pm 1503896852

Yes that's a good idea. How about charging GST on all your other tax payments! And then we might even get away with charging GST on GST. Voila!

by Rob | 28th Aug 17, 5:27pm 1503898058

Eg.. GST on local government property rates, which are essentially a tax on a tax.

by Ralph | 28th Aug 17, 5:42pm 1503898967

Or a tax on the inflationary gain in the value of your home?

Oh no, slightly different. My Bad.

by Boatman | 28th Aug 17, 5:34pm 1503898452

TAX , TAX , TAX , TAX , TAX , TAX, TAX , TAX , TAX ,TAX, MORE TAX , NEW TAX , ADDITIONAL TAX , REVERSE cost of living TAX CUTS ................ Leopards seldom change their spots .

Why did we expect anything different from Labour this time ?

by Double-GZ | 28th Aug 17, 5:35pm 1503898553

EXACTLY. HARD WORKING NEW ZEALANDERS ARE NOT THE ATM OF THE LABOUR PARTY!!

by r-mc | 28th Aug 17, 5:48pm 1503899326

EXACTLY. RICH NEW ZEALANDERS ARE NOT THE ATM OF THE LABOUR PARTY!!

by nymad | 28th Aug 17, 5:50pm 1503899447

EXACTLY. TOURISTS ARE NOT THE ATM OF THE LABOUR PARTY!!!

by Independent_Observer | 28th Aug 17, 5:51pm 1503899508

EXACTLY. HARD WORKING KIWIS ARE THE ATMS FOR NATIONAL SUPPORTERS AND DARKLORDS WHO SUSPICIOUSLY SEEM TO BE ONE AND THE SAME THING...

by r-mc | 28th Aug 17, 7:17pm 1503904627

My old man was never able to write in lowercase letters, is that a generational thing?

by RickStrauss | 28th Aug 17, 8:09pm 1503907779

EXACTLY! MAKE THE WORKERS PAY AS MUCH AS POSSIBLE AND LEAVE US LANDOWNERS WEALTH INCREASES TAX-FREE.

by Ralph | 28th Aug 17, 5:41pm 1503898874

Now now, Mr Boatman, they won't increase taxes.

Maybe levies. Or surcharges, stamp duties, tariffs, fees, contributions, excise, dues, imposts or tolls.

But taxes? Just ridiculous.

by solardb | 28th Aug 17, 5:35pm 1503898511

I can just about guarantee that none of the naysayers above said a word when National introduced the border tax in 2015 .
But that is different eh...

by Boatman | 28th Aug 17, 5:39pm 1503898798

Yes a whole $18 when you arrive and $3 when you leave , and the money goes to Biosecurity

by nymad | 28th Aug 17, 5:46pm 1503899191

Okay. So that's completely different to what triggered this statement, then?

"TAX , TAX , TAX , TAX , TAX , TAX, TAX , TAX , TAX ,TAX, MORE TAX , NEW TAX , ADDITIONAL TAX , REVERSE cost of living TAX CUTS ................ Leopards seldom change their spots .
Why did we expect anything different from Labour this time ?"

by solardb | 28th Aug 17, 6:40pm 1503902425

And this is a levy with the proceeds going to tourist infrastructure, not into the genral fund. And its a whole $ 3 more than Nationals.

by solardb | 28th Aug 17, 6:41pm 1503902476

Looks like we need a capital letters tax.

by Yvil | 29th Aug 17, 1:11am 1503925895

More taxes from Labour...

by Ze badge | 29th Aug 17, 8:34am 1503952471

I wish any of you guys opposing a tourism tax would try to live in a tourist hotspot for a year. See how vast numbers of the low budget tourists disrespect our conservation estate, our freedom camping regulations and even simple things like the fire season (lighting romantic fires that cause thousands $$$ damage). You'd celebrate anything that stops these tourists from visiting.