Giving GST back to the tourism industry is not on the table

31 August 2018

Media Release from Regional Tourism New Zealand

Giving GST earned back to the tourism industry is not on the table, says Minister of Tourism

Minister of Tourism, Hon. Kelvin Davis has confirmed that returning a portion of GST revenue earned from international visitors back to the tourism industry is not on the table, preferring instead for the sector to focus their energy on utilising already available government funding.

In a letter to Regional Tourism New Zealand (RTNZ), the Minister stated that; general taxation is not a form of cost recovery, rather it is how as a country we fund valuable public services. The letter goes on to say; the Minister of Finance recently made statements to the effect that hypothecating GST for regions is not the current governments policy.

“We wrote to both Ministers in July asking them to clarify their stance on GST being returned to the sector.” RTNZ Chair, Graham Budd said. “Some members of the tourism industry have continually called for the Government to allocate a portion of GST revenue earned from international visitor expenditure to infrastructure and other investment needs of the sector. RTNZ does not agree with this idea and we are pleased the Minister has clarified the government’s position.”

“The GST idea was going nowhere and it just muddied the waters for any meaningful conversations around how to fund tourism in the long term”.

“Ongoing discussions with the Minister’s office support this, with the Minister preferring the industry focus on fully utilising funding mechanisms that are already available to the sector such as the Tourism Infrastructure Fund, and the Regional Development (Provincial Growth) Fund, as well as, actively contributing to ongoing discussions around the proposed International Visitor Conservational and Tourism Levy, which RTNZ supports.”

In a submission to the Ministry of Business, Innovation and Employment in July, RTNZ proposed all the funds raised from the Levy should go towards conservation initiatives that supported tourism but also requested the Government enable the development of a regional levy framework that supported regional tourism needs.

“What the regions want is their own alternative funding, in the form of regional visitor levies, not a portion of GST returned to the regions, as this would be fraught with issues particularly around how it could be fairly apportioned. A nationally consistent regional levy would mean the money raised in a region stays in the region to fund local tourism needs. This is a far more useful conversation to be having than one about GST”.

ENDS

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