Package of options needed to fund local tourism infrastructure

LGNZ President Dave Cull has at this morning’s Quarterly Media Briefing congratulated the government on recognising that tourists should contribute to the costs of the infrastructure they use, however LGNZ says the proposed border levy is only part of the solution.

LGNZ has recently made a submission on the International Visitor Conservation and Tourism Levy, which proposes a border levy on some overseas visitors entering New Zealand, to fund mixed-use infrastructure used by tourists such as toilets, car parking, access ways, local transport, drinking water supply, wastewater services and solid waste refuse.

LGNZ’s submission supports a border levy, but notes that it will only partially address the issue of funding mixed-use infrastructure used by tourists as a significant number of tourists will be exempt from the levy. Instead, LGNZ says a Local Tourist Levy needs to be included as part of a package of funding options.

“A levy collected at the border will provide a much-needed revenue stream for some tourism infrastructure projects, but has its limitations. In its proposed state it will continue to allow Australian, domestic and Pacific Island visitors to use mixed-use infrastructure, funded by local ratepayers, for free,” says Mr Cull.

“However, in places like Queenstown and the West Coast, where they have large numbers of Australian visitors that is forecast to grow, this is an issue which threatens the social licence of the tourism industry to operate in areas of New Zealand that are critical for our international tourism offering.”

“That’s why we’re proposing an additional funding option called a Local Tourist Levy, which is used throughout Europe, the United States, Canada and Japan. A local levy would assist councils to alleviate the unfair burden on local ratepayers from continuing to subsidise the tourism industry.”

“It would provide a number a benefits for New Zealand – a fair distribution of the costs and less red tape and distribution issues than associated with a central tax, alignment with the principles of localism and it would incentivise councils to provide quality mixed-use infrastructure, which isn’t the case right now.”

“Currently, New Zealand is an outlier in respect of its lack of a local tourist levy.”

“The combined investment of LGNZ’s 78 member councils on infrastructure make local government the largest contributor to the tourism industry in New Zealand, but while central government gets all the GST revenue from tourism, local government are picking up the majority of the costs.”

“This is not a sustainable position from a ratepayer’s point of view, which is why LGNZ are proposing a Local Tourist Levy to achieve a solution to local mixed-use infrastructure provision and maintenance and allow councils to allocate scarce ratepayer funds to projects of more direct benefit to local citizens,” continued Mr Cull.

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