New foreign tourist tax - vital funds for industry or unnecessary tax grab?

Money from a new $35 international visitor levy could help relieve the pressure from high visitor numbers to places such as Milford Sound. Photo / Mike Scott.

Tourism operators are generally supportive of a new $35 tax on every international visitor, even in light of Government advice that it could see 20,000 tourists spending up to $70m elsewhere.

But the industry wants to ensure that the $80m a year from the international visitor levy goes towards worthy projects, otherwise it will just be seen as an unnecessary tax grab.

The Government wants a law change in place so foreign visitors will start paying the levy and an Electronic Travel Authority (ETA) fee of between $9 and $12.50 by the second half of this year.

Most foreign visitors - but not citizens of Australia and several Pacific nations, or ship and air crew - will have to pay the $35 levy.

The ETA will mean that visitors from countries that have a visa-waiver agreement with New Zealand - including the UK, USA and European countries - will also have to pay an additional fee and go online to get permission to travel here before arriving.

Tourism Industry Aotearoa chief executive Chris Roberts said the industry supported the new taxes - as long as the money was spent wisely.

"The devil will be in the detail. What is the money going to be spent on? Will it improve the visitor experience? Because we are asking people to pay before they come here."

He said that the tourism industry was not too concerned about official advice that the levy could see 20,000 fewer tourists each year spending up to $70m in a different country.

"There are bigger trends - exchange rates and fuel prices - that have a far bigger impact on tourism growth. No one's ever happy to lose a visitor we wouldn't have otherwise, but we're not hearing too much concern about putting people off visiting.

"The PR campaign explaining the charges and how it will be used ... if it's just seen as a tax grab, some visitors might just choose to go somewhere else. If we explain why we are collecting the money and what we intend to do with it, I think visitors will be happy to pay it."

Roberts said the main concern in the industry was how "complex and clumsy" the collection mechanism might be, and how well the change is publicised.

"This is a major change for visitors from traditional markets like the UK, Europe, and the USA who have always been able to hop on a plane and fly to New Zealand.

"They will need to have gone online first and got permission to come here, and paid their money. That will require a major PR campaign."

National's Tourism spokesman Todd McClay has called the tax unnecessary, saying the Government already collects $3.27 billion a year in international tourism-related revenue, according to a Deloitte report.

Roberts said injecting the money from the tax into bigger projects would be better than a "lolly scramble" of several handouts of small amounts.

It could, for example, go towards relieving pressure spots that are always overwhelmed by visitor numbers such as the Milford Sound, Punakaiki, the Tongariro Alpine Crossing or Cathedral Cove's Hot Water Beach.

The Government wants the money from the levy to be split 50/50 between conservation and tourism infrastructure.

The fund will complement the Tourism Infrastructure Fund, which pays for smaller items such as car parks and toilets, and the Provincial Growth Fund, which looks to boost, among other things, tourism in the regions.

Roberts said the Government benefited from a booming and sustainable tourism sector, adding that spending from international visitors added an extra $148m in GST to the Government in 2018.

"Having a successful tourism industry in the long run delivers more to the Government than the new tax."