Bed tax breather

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Queenstown’s mayor is in no rush to plead for Government help to impose a form of tourism tax. 

Mayor Vanessa van Uden wants to get, as they say, a few more ducks in a row. 

First, she wants more understanding around who is carrying the can for the extra costs imposed on the Wakatipu by our high number of visitors. 

Then, once a fairer way of spreading those costs around the ratepayer base is pinned down, she wants some analysis done on whether there’s a shortfall that we need to somehow tax visitors for. 

“I’m not entirely convinced there will be [a shortfall] to be honest,” Van Uden says. 

“There’s quite a large amount of it being paid for now in terms of the day-to-day running expenses that visitors are being charged.” 

But if there is a shortfall – and the size of it can be calculated – then that’s the time Van Uden believes an approach to Government should be made. 

“The visitor might be just as happy – or the community might be just as happy – to stump it,” Van Uden says. 

“I don’t know … I don’t think so but let’s go and have the discussion when we’ve got facts. 

“There’s no point going to Central Government now and saying ‘Please can we have some help?’ 

“They’ll ask: ‘Well, have you used your rates as well as you could?’ And we’ll say ‘Oh, we’re not really sure’. And they’ll ask: ‘And what costs are the visitors putting on you that you’re not covering with rates now?’” 

This is where the rates review process that’s underway comes in. 

Council officials, led by finance boss Stewart Burns, have proposed a new system for apportioning some rates aimed at recovering visitor-associated costs. 

Everyone seems to admit rates are a fairly clunky way to do that, but it’s the only revenue-gathering tool the council has – unless Government steps in and allows for setting a bed tax or similar. 

The existing rating regime was apportioned in a similar way to “licking your finger and seeing which way the wind is blowing”, Van Uden admits. “What we’ve tried to do is put some more robustness around the reasons for those calculations.” 

Debate about a possible tourism tax has heightened in Queenstown since the council sent out a press release in March trumpeting its new rates proposals as “the next best thing to a bed tax”. 

The proposals include new “recreation and events rates” which are essentially a property tax spread across all residential and business ratepayers – both commercial and accommodation property owners – and not just tourism-specific businesses. 

The submissions are in, having closed last month – but there’s plenty of work to be done yet. The rates review will inform council’s 10-year plan, to be adopted later this month. 

Van Uden: “I’m a firm believer you have to go with your numbers and facts sorted and find out if indeed visitors aren’t already, in a roundabout way, contributing their fair share.”