Tourism Minister Kelvin Davis says the impact of a proposed levy on tourists and hikes in visa fees and immigration levies are expected to have only a “minimal” impact on tourist numbers.
Davis outlined the proposed new tax this morning, saying most tourists would barely notice the increase and denying the Government was treating tourists as a cash cow.
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He said the Government needed to ensure infrastructure kept pace with growing tourist numbers and it was fair to expect tourists themselves to contribute to that rather than leaving New Zealanders to pay through taxes and rates.
The $25-$35 tax will apply to all visitors other than Australians and Pacific Islanders.
Davis had been advised the impact on tourist numbers would be minimal, but did not know what that meant in terms of actual numbers.
“When you’re talking about the additional cost to, say, someone coming from the United States who are already paying about $1200 an extra $25-$30 isn’t going to make that much of a difference. Coming from Australia, $25-30 on top of a $180 to $200 ticket is quite a big proportion. That’s why there are exemptions.”
Labour had campaigned on a $25 tax on all visitors, including Australians and Pacific Islanders, to raise $75 million for a tourism fund. Under its policy, 60 per cent of that was to be spent on tourism and the remainder on conservation.
However, the Government is now consulting with the sector to decide what the final split will be.
As well as the new levy, those who need visitor visas will pay 10 per cent more for that visa (about $15 to $17 more than the $150-$170 currently paid) and face a slight increase in immigration levies. Those from visa waiver countries will need to apply for an Electronic Travel Authority at a cost of $9 at which point they will be charged the tourist levy.
Tourism Industry Aotearoa chief executive Chris Roberts said no industry liked being taxed more or seeing its customers taxed more but it was the government’s right to do so.
Tourism Industry Aotearoa CEO, Chris Roberts on proposed tourist levy.
His main concern was ensuring the money collected under the levy was spent on the reasons it was being collected for – tourism-related infrastructure and facilities – and spent well.
“There are clearly hotspots in New Zealand where there are pressures on infrastructure. If this funding goes to the places it can do most good then the international visitor will see they’re contributing to their experience.”
He said a recent Government-commissioned report on the economic impact of tourists showed the Government already netted an average of about $700 per visitor through taxes and other revenue but that was not ring-fenced for tourism infrastructure.
“International visitors are already paying their own way, making a fantastic contribution. They’re now going to be asked to pay a bit more.”
He said those on short-haul journeys from Australia and the Pacific would not be paying more and it would not make much difference to the price of tickets from long-haul journeys.”
The levy will be collected either when visas are processed or under a new Electronic Travel Authority system.
That is to be introduced for those who do not need a visa to visit New Zealand, such as from countries with which New Zealand has visa-waiver agreements.
Roberts said it would affect between 1.5 billion and 2 billion visitors who could currently travel to New Zealand without any paperwork or “red tape” under the visa waiver programme.
“Hopefully it will be as easy and pain-free as possible but it is a new step for most visitors. They can’t just jump on a plane and come to New Zealand.”
Paul Stocks, deputy chief executive of labour, science and enterprise at the Ministry of Business, Innovation and Employment, said the new ETA system was common overseas and would allow New Zealand officials to do the necessary checks on passengers ahead of time.
At present, Immigration did not know who was coming from visa-waiver countries until they checked in for their flights. He expected it to cost “a couple of million of dollars” to set up which would be recovered from fees of about $9.
That system was still being worked through, but he expected it to be easy to use and fast.
There would be transitional processes for those who did not realise the new system was in place for New Zealand and turned up for flights without an ETA.