Oz still appealing

By GREG ANSLEY

The GST ogre appears unlikely to stem the flow of Kiwis heading across the Tasman. Tourism officials are predicting a record number of New Zealanders taking an Australian holiday this year.

Australia's 10 per cent GST comes into force on July 1 but, as in New Zealand, its impact will vary widely because of the removal of other wholesale and sales taxes on a wide range of goods.

And its bite will not be nearly as severe as the hole exchange rates already take out of Kiwi holiday budgets - up to 24 per cent, on the present strength of the Aussie dollar.

According to the latest figures from the Australian Bureau of Statistics, more than 450,000 New Zealanders flocked to Australia in the seven months to January. Most were on holiday or visiting friends and about 20 per cent flew in for business or conventions.

The dollar and economic blues at home have not so far cooled enthusiasm. In April the flow increased by a further 2.6 per cent and there is every indication the numbers will continue to increase after GST hikes up the cost of most goods and services.

The exceptions are basic foods and a range of items unlikely to affect holidaymakers, such as education, health, child care and rates.

Australian Tourist Commission spokesperson Olivia Wirth said new forecasts, which had taken into account the imposition of the GST, predicted the number of Kiwi visitors would rise by 35,000 to a record 764,000 this year. In round terms, this is the equivalent of one New Zealander in five taking a break in Australia.

Wirth said the number of Kiwi visitors was expected to rise steadily to 856,000 within eight years.

The increases in the cost of an Australian holiday after July are unlikely to frighten many New Zealanders who are used to a lower dollar and their own GST and have weathered much worse without giving up their closest and most convenient overseas jaunts.

There is, for a start, the uncertainties of post-GST prices.

Prices will see-saw on the imposition of the GST on one hand and the removal of other taxes on the other.

But they are also caught by the counterpressures of a weak Australian dollar (against the $US) rising wages and other costs, and the need to keep prices under tight rein in a fiercely competitive business environment.

The best guide as to what visiting Kiwis can expect has come from the Australian Competition and Consumer Commission (ACCC), the federal watchdog keeping a close eye on potential profiteering.

According to its calculations, the cost of a one-night hotel or motel stay will rise by between 7.5 per cent and 9 per cent adding, for example, between $A6.05 and $A7.30 to an $A81 bill.

However, while this would mean a worst-case rise of $A22.50 for a two-bedroom, $A200-a-night holiday unit on the Gold Coast, sliding rates for longer stays could hold the rise for a seven-day holiday to as low as $A93.

Air fares within Australia will increase by a projected 7.5 per cent, increasing the cost of a Sydney-Melbourne economy flight by more than $A43, to about $A623 - although heavily discounted fares from new peanuts-and-cola rivals Impulse and Virgin Blue will reduce this significantly.

City bus fares will increase by up to 18c, beer at a bar will increase by between 17c and $A2.27 a 285ml glass, but a 1.25 litre of soft drink will be up to 12c cheaper.

A main course at a restaurant costing $A24.50 now will rise by between 9 per cent and $A26.55, a $A2.95 hamburger will cost up to $A3.22, and a serving of chips will be up to 25c dearer.

None of this is expected to deter Kiwis.

The Australian Tourist Commission research has shown that New Zealanders will continue to travel abroad even when times are tough.

While Australia may rank behind Europe, the US and other more exotic destinations, financial reality means most will in fact cross the Tasman instead.