Tourist tax to fix budget holes

Rotorua Mayor Steve Chadwick

Charges and taxes on tourists coming to Rotorua and other regional cities could be used to plug budget deficits, says a review of local government funding.

The 10-point review was released yesterday on the last day of the Local Government New Zealand conference in Rotorua.

Other suggestions include the creation of "special zones" to test ideas for economic growth, and a call to simplify the process for applying for rates rebates.

Point nine of the review will "allow councils to levy specific charges and taxes on visitors where economically efficient".

Rotorua Mayor Steve Chadwick, who presides over a city that sees more than three million visitors a year, was careful yesterday to appear open-minded about a potential tourist tax without committing her support to the proposal.

"With regards to levies and the like, those are things we would need to consider if, and when, they became funding options," Mrs Chadwick said.

The mayor said the review supported the Rotorua Lakes Council's approach of "innovative partnerships" when it came to council funding.

"The point is that local government needs a wider range of funding options to bring about the change our communities want and need," she said.

Rotorua Association of Motels chairman Barry Mabey said the charge could potentially provide a viable option that would save local businesses bearing so much of the cost of public services.

LGNZ president Lawrence Yule used his speech to express concerns that existing transport networks were not serving regional - or national - interests.

"The current reality is that different needs of transport have different policy drivers," he said, adding this confusing mix of objectives was a barrier to sustainable economic growth.

Mr Yule also took a swipe at Air New Zealand for cancelling a number of regional routes, implying the decision had been taken without enough consultation of the communities affected.

Local Government Minister Paula Bennett began her speech by sympathising with the problems faced by regional authorities but then proceeded to criticise the structures and strategy of local governments around the country. She said authorities should be looking at restructuring to promote financial prudence, efficiency - and perhaps even extinction.

"It might even mean that there is no longer the need for a regional council."