Bed tax bogged down


A business case to the government for a Queenstown bed tax could still be months away.

Chamber of Commerce boss Ann Lockhart admits it has been a “reasonably slow process” – work started more than a year ago.

But she hopes a final version will be approved by the end of the year.

The chamber contracted a consultancy firm, which she wouldn’t name, about 12 months ago.

“Obviously, we’d like these things to happen faster, but we’ll probably get only one chance at this.”

The issue was a complex one involving many “stakeholders” and the chamber had to be ready to argue its case to the government, including the Treasury.

“The most important thing is that our case must be a strong one.”

A bed tax has been debated in Queenstown circles for decades.

At present, the Wakatipu’s permanent population of about 18,000 must fund the infrastructure required to host more than two million visitors a year.

Two years ago, the chamber sounded out Prime Minister John Key about a law change to allow a bed tax.

Key said he could see merit in the idea, but the Treasury was concerned about setting a precedent for other centres.

However, the Government has already set a precedent. In 2012, it allowed Stewart Island to charge a $5 visitor levy, introduced in September 2013.

Any bed tax proposal is likely to get push-back from accommodation providers, who say they are already squeezed by taxes and booking agent commissions.

But Lockhart says any consideration of how a visitor levy might be collected was not within the business case’s brief.

Unless the government accepts the case for a visitor levy in principal, there is no point starting detailed work on how it might be imposed.

A study commissioned by Tourism Industry Aotearoa (TIA) and major tourism operators looks at how visitor levies might be applied in New Zealand.

“It may well be that we leave the application side of it until we see what comes out of that proposal.”

The Otago Daily Times asked TIA for information about the study, but comms boss Ann-Marie Johnson
says it “wasn’t directly involved” and referred the ODT to Air New Zealand.

An Air New Zealand spokesman, Christopher Lawrence, says the company was “playing a role in industry discussions” on the issue in its capacity as a TIA member, and referred the ODT to the TIA website.

The website says the organisation is leading the development of a “national infrastructure assessment for tourism” that would complement private sector-led research into how such infrastructure could be funded.

The findings would be presented at a TIA summit on November 9.

Business Ministry mouthpiece Kerry Thomas says Air New Zealand, Auckland Airport and other industry players had commissioned consultancy firm McKinsey & Company to undertake international research into funding models for tourism infrastructure.

Otago Daily Times