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TIA, TEC reaction to govt’s plan to implement border levy

11 May 2018  By Staff Reporter

Chris Roberts, chief executive of Tourism Industry Aotearoa:

We’ve known for some time that officials have been working on possible border levies and taxes. We got an assurance from the government a little while ago that there would be nothing in this year’s budget and that there would be consultation starting in late May over the final design of that.

Chris Roberts

What we hope for is as broad a conversation as possible and that we are not limiting the range of what that conversation is. The language is quite important. The minister talked about ‘socialising’ a levy proposal with industry rather than consulting with the industry, so we will have to wait and see the nature of what comes out.

Is it true consultation and open to ideas and other views being presented? Or is a fait accompli – this is what is going to happen and it’s going to come in next year and we’re going to push ahead with it no matter what other people say about it?

I don’t want to pre-judge where that is going to fall, but that is what the process is going to be. Something is going to come out in a few weeks time, hopefully, for consultation, so we can have a real say about it.

Our view is that there are some big questions to be asked before you take a step of putting a charge at the border. What is the issue you are trying to solve? Is the issue already being solved by other means such as a Regional Growth Fund and an Infrastructure Fund? If you do determine that you need a new funding source, what is the design of that funding source? Who controls the money? Where does it go?

What is the issue you are trying to solve? Is the issue already being solved by other means such as a Provincial Growth Fund and the Tourism Infrastructure Fund? If you do determine that you need a new funding source, what is the design of that funding source? Who controls the money? Where does it go?

At the moment there are a lot of unanswered questions before we leap to designing an actual tax collection.

The minister has indicated that trying to design a border levy that is only paid by international visitor is an incredibly complex task, and I have seen some of the advice the ministers have received from officials and they have been pointing that out – there is a reason no other country does it. It’s incredibly complex, I think that complexity might mean that – if they still push ahead with that idea – it might take some time to get it implemented.

There are multiple bi-lateral relations with other countries – treaties, relationship agreements, trade agreements – that would all have to be examined to be sure that you are not breaching some arrangements with our trading partners and our close allies. It is a very complex picture. It looks simple – let’s slap a charge on every international visitor to NZ – but I think the more they look into it the more complexities they are finding.

Judy Chen, chief executive of Tourism Export Council:

We want to be part of that discussion because at the moment we have some concerns around the design and the implementation and distribution of that fund. We just hope that we are not just going to be seeing a final proposal without being involved in the whole discussion and consultation.

Judy Chen

In terms of whether we support it or not, it is really down to whether they have exhausted the current existing funding models everywhere. Also, what is the funding really for – where is it going?

We certainly accept the fact that, as a country, we need to support all our conservation efforts, our maintenance of DOC. But currently our ITOs already do that through our guiding concessions, so it is a matter of looking if they are introducing something for that. Then we need to look at the current systems that are in place and make sure there is no double up and that it is a fair and equitable.

In general, whenever there is a levy or tax such as this, it is not something a visitor wants to see nor do we want to see it because it is another cost to businesses and it is another cost to coming here. It needs to be well-designed and well thought out and if it is for the benefit of tourism in general and everybody is contributing then, yes, it is something we all need to be aware of and be part of in order to have a sustainable destination management strategy.

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