Opinion: Time to open the chequebook


Queenstown has a well-deserved global reputation as a tourism destination.

It is undoubtedly a drawcard for many of our international visitors, and is also a special place for New Zealanders to visit.

However, there are well-founded fears that Queenstown is becoming a victim of its own success.

Queenstown may have the fastest-growing resident population in the country (and the highest house prices), but the number of ratepayers is still tiny compared to the number of visitors the district hosts every year.

Without question, Queenstown needs some major infrastructure investment, and this burden cannot fall entirely on its ratepayers.

The whole of NZ benefits from Queenstown’s pulling power. The government should treat Queenstown as a special case, because it is.

As the peak national body for the tourism industry, we agree with Mayor Jim Boult that Queenstown needs assistance to meet its infrastructure needs.

The council has done a sound job in identifying the investment priorities and the extent of the funding shortfall – $278 million over the next five years.

TIA does not dispute that. Where we disagree is that the answer is a bed tax.

Queenstown has infrastructure challenges resulting from the strong resident and visitor growth, with investment not keeping pace with this growth.

A step-change in infrastructure investment is needed to ensure Queenstown continues to be a great place to live and to visit.

This is lumpy investment. Much of what needs to be put in place, like new roads, will then provide sufficient capacity for decades.

There is a strong argument for central government and its agencies to be the major contributor to this urgently-needed investment, given the core role Queenstown plays in the national visitor economy.

The $3 billion Provincial Growth Fund (PGF) seems an obvious source of assistance, particularly as tourism is one of three priority sectors the government wants it to target.

If Queenstown is not to be assisted through the PGF, the government should put together a bespoke support package for the district.

A local charge like a bed tax would provide an ongoing income stream, not the immediate funding injection that Queenstown needs. It would require new legislation and is complex to design and implement.

Even if the government agreed to it today, it would likely take a couple of years to put it in place. Moreover, there is no consensus this is the right approach.

Understandably, Queenstown accommodation providers are strongly voicing their opposition to a bed tax, concerned that visitors will be discouraged from staying, threatening the livelihoods of the smaller operators.

On a national level, the government is pushing ahead with a new border charge, the International Visitor Conservation and Tourism Levy.

Where the money raised by this levy will be spent has yet to be determined. There is also the Tourism Infrastructure Fund that councils can access, as well as the aforementioned PGF.

We also have the Productivity Commission getting underway with a comprehensive review of how local government is funded. Visitor infrastructure issues are within the scope of this inquiry.

With all this going on, consideration of any further tourism taxes, levies or rates at a local or central government level must now pause to allow the Productivity Commission to do its work and come up with some lasting solutions.

In the special case of Queenstown and its pressing needs, it is time for the government to open its chequebook.

It is in New Zealand’s national interest that Queenstown maintains its tourism reputation, and continues to be an awe-inspiring and welcoming place for locals and visitors alike.