Queenstown Lakes District Council finance boss Stewart Burns wants you to know the controversial new proposal for rates is no bed tax.
At a public presentation on Tuesday, Burns said he’d like to begin by saying what it was not about.
“It’s not about a tourism tax, it’s not about a bed tax and it’s not about any additional funding.
“We need to have some mechanism for recognising the costs associated with visitors or tourists and indirectly recovering those costs. That has always been a principle we’ve held and to some extent there has always been this indirect recovery from tourists.”
Burns says council’s aim going into the rates review was for better disclosure and transparency to show where certain costs – such as those associated with Queenstown’s more than two million annual visitors – lie.
“The proposals we’ve come up with, they do change who pays what share but don’t change at all how much is collected. We’re not looking to expand the rating base – we’re just looking at who should pay what share.”
The big winners under the proposal are vacant land holders – the amount they’ll contribute to the general rates haul drops from 17 per cent to 12. Residential ratepayers’ contribution actually increases from 42 per cent to 45. It also climbs for accommodation owners from 12 per cent to 14 while commercial property owners’ percentage drops from 11 to eight.
Here Burns answers Mountain Scene queries on the proposal.
Mountain Scene: Would you prefer Central Government stepped in and legislated for a bed tax to be collected so you didn’t have to do it indirectly with property rates?
Burns: “It certainly does work overseas in certain jurisdictions. I’m not sure whether that’s right for NZ, that’s Central Government’s call. I wouldn’t underestimate the administrative burden that would apply to local businesses and administration needed to calculate it and collect it.”
MS: Council’s line is the proposals are just a new way of apportioning rates but it’s going to raise more, isn’t it?
Burns: “Definitely not. This is not about the amount of revenue we’re looking to collect. The annual plan and long term plan processes determine that. This is merely an exercise in who should pay what share of that rating burden. It’s not about the quantum, we’re not looking to raise more revenue out of this.”
MS: But if you’re saying we have all these visitors putting pressure on infrastructure and need to recoup the cost it sounds like you’re raising revenue?
Burns: “No, there’s never been any release from council saying we’re looking to raise more revenue. What we’re saying is we need to take into account the impact of visitors when we’re allocating the costs visitors impose on us.”
MS: So you hope a direct consequence of this new apportioning is operators charge extra to cover it?
Burns: “They’ll need to make their own decisions around that because rates is only one part of the cost structure they have. There’s a whole range of issues they need to take into account when settting their tariffs.”
MS: Advice for those people?
Burns: “My advice from the start has been to understand what it is the proposal is promoting and make an informed decision – and the first thing is to avail yourself of the submission opportunity so council can hear your views.”
MS: Expect much change to the proposal after submissions – or is what you’ve done perfect?
Burns: “It’s not perfect by any means, because obviously perfection is impossible with rates. It’s a relatively blunt instrument when trying to allocate costs. We’re just trying to improve the current situation by making it more transparent.”
MS: The real issue is for town to be able to afford the infrastructure costs of increased visitation – how does this address that?
Burns: “It doesn’t. The purpose of the review was not to provide any additional funding. There’s a separate process [council’s 10-year plan] dealing with that.”
MS: Council announced these new rates proposals as the next best thing to a bed tax – stepping away from that now?
Burns: “They weren’t my words.”
MS: Yeah, but they were the words of a council press release?
Burns: “The reason for presenting it that way initially was we have always had an indirect approach to collecting the costs associated with visitors. It’s not anything like a bed tax but it’s the next best thing in terms of the tools we have available.”