Border levy brings in the cash

Investigative Reporter·NZ Herald·

20 Jun, 2016 05:00 PM3 mins to read

Since January, all international travellers have been charged a border clearance levy, which was a surprise measure in Budget 2015. Photo / Doug Sherring

Ministries reap $7.5m more than expected from travelling public.

A controversial border clearance levy has generated $7.5 million more than expected after only five months.

There are now calls from the regions for a further levy or tax to be introduced on tourists to fund badly-needed infrastructure - something Prime Minister John Key says is possible.

Since January, all international travellers have been charged a border clearance levy, which was a surprise measure in Budget 2015. People with a return ticket to or from New Zealand are now hit with a total charge of about $22, that is included in the price of their airfare.

Figures supplied to the Herald show Customs and Ministry for Primary Industries jointly took in $27.72 million excluding GST - above the forecast income of $20.22 million. The agencies said the increased levy take was from higher than expected passenger numbers.

Tourism Industry Aotearoa's chief executive Chris Roberts said the industry saw the levy as unjustified - and the Government was fortunate it had been brought in at a time of strong tourism growth.

As well, the industry believed the tax was reducing the extent of the growth, he said.

The border levy is used to pay for border screening and security. But the question of how to fund the infrastructure needed to cope with booming tourism numbers is causing debate.

Local councils in areas like Queenstown and Rotorua are, per ratepayer, spending much more on the necessary infrastructure than centres like Auckland.

The Government announced last month a $12 million fund to help communities with small tourism infrastructure projects. But much more is needed. There were 3,274,000 international arrivals in the year to April, an annual growth of 11 per cent.

Chinese tourists jumped 29 per cent to 390,000 visits, but are still far behind the leading group of Australian tourists at 1,361,000. Total visitor arrivals are forecast to hit 4.5 million by 2022 - just under the projected national population.

Major tourism organisations, including Air New Zealand and the Tourism Industry Association, are working on proposals for a large central fund for tourism infrastructure.

Yesterday, Mr Key said funding ideas would be considered.

Labour leader Andrew Little supports a new levy on tourists instead of the current clearance levy.

"If we are going to put a levy on travellers for anything it ought to be about developing our tourism infrastructure - that's what is really struggling at the moment."

In a speech in Paihia last night, NZ First leader Winston Peters cited strain on tourism infrastructure and called for tourism taxes to "return to the provinces" to fund tourism infrastructure and promotion.