Tourist tax for new stadium insulting to visitors

‘Tourist tax’ for new stadium insulting to visitors

Visitors to Auckland are not ‘cash cows’ who can be milked to pay for a new stadium, Tourism Industry Association New Zealand (TIA) Chief Executive Fiona Luhrs says.

“The tourism industry will vigorously oppose any moves to make visitors pay bed or airport taxes, to fund a new stadium that will benefit the wider community,” Ms Luhrs says.

“It’s an insult to our visitors to expect them to pay for a facility that will boost Auckland’s economy. This is an abuse of the principle of user-pays.”

TIA believes the process to introduce bed and airport taxes is much further down the track than has been reported and is astounded that the Government has failed to engage with the industry as a key player. TIA has requested a meeting to discuss the issue with Tourism Minister Damien O’Connor but has been advised that it is in the hands of Rugby World Cup Minister Trevor Mallard, Ms Luhrs says.

Given that Mr Mallard is also Minister of Economic Development, TIA wants to make sure he is aware of the harm these new taxes could do to Auckland’s $3.2 billion tourism industry, she says.

Former Tourism Minister Mark Burton is on record as saying it is “neither fair nor credible” to single out the accommodation sector for tax.

No consultation

The Government has requested full cooperation from the tourism industry for the organisation of the Rugby World Cup 2011, yet is prepared to dump its problem at the feet of the industry without even the courtesy of discussion, Ms Luhrs says.

“There has been no consultation across the industry over the new stadium or how it should be funded. Visitors to Auckland – both international and domestic – are simply being seen as an easy target.”

How to fund the tourism sector for future growth to further drive the Government’s economic transformation agenda is being considered as part of the current mid-term update of the New Zealand Tourism Strategy 2010.

“We want the issue to be discussed across the industry and any funding initiatives to be introduced in a rational, managed and agreed way, not as a knee-jerk reaction to an immediate problem,” Ms Luhrs says.

Mr Mallard has said today that he wants to make Auckland an internationally competitive city but imposing bed and airport taxes will make Auckland’s tourism sector less competitive and less attractive to visitors.

Onerous costs

The cost of putting in place systems for the collection and payment of bed taxes will be onerous for smaller accommodation businesses whose profits already suffer from considerable compliance costs.

Bed taxes are a lazy tax that target only a small area of tourism activity, she says. Many other sectors benefiting from tourism, such as restaurants, retail, service stations and dairies, would not be subject to the levies.

It also appears the new stadium will not include the international-standard convention and exhibition centre New Zealand needs as a high priority to attract extremely valuable international convention and conference business.

“The tourism industry asks the Government to take a long-term view on this issue. If a fully thought-out new stadium goes ahead, it has the potential to add billions of dollars to the Auckland, and New Zealand, economy by attracting events,” Ms Luhrs says. “That is a discussion we are interested in having.”

“Targeting the tourism industry with bed and airport taxes would harm a valuable and growing industry that already makes a significant contribution to Auckland.

“This proposal is an affront to progressive business practices and is strongly opposed by TIA Members who have contacted us today. I would remind the Government that one in ten New Zealanders work in jobs supported by the tourism industry and they are looking to the Government for smart decisions that will support our largest foreign-exchange earning sector.”

Key statistics about tourism:

Tourism is the world's fastest growing industry

New Zealand tourism arrivals have doubled in size since 1994 to 2.38 million

Forecast annual growth is 4% on average for at least the next five years

Tourism is New Zealand's single largest export sector and contributed $8.1 billion dollars to the economy in the year ended March 2004. That is 18.7% of exports

Domestic tourism contributes $9.4 billion to the economy each year

Tourism directly and indirectly employs 10 percent of the work force. That is one in 10 jobs in New Zealand.

Tourism represents 9% of gross domestic product and generates nearly $526 million in GST returns from international visitors each year. Tourism is the only export sector whose international clients pay GST.

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