Will the rising visitor levy mean fewer tourists or richer tourists?
Most visitors to New Zealand will be forking out $100 to enter the country, evoking the 'high quality' tourist debate of 2022.
Mōrena, and welcome to The Bulletin for Wednesday, September 4.
In today’s edition: Politicians to converge on Tūrangawaewae, why the Covid inquiry findings could be withheld for months, and are you saving enough for retirement? But first: The ‘high quality’ tourist debate is reignited as the visitor levy gets hiked.
Tourist levy to rise
International tourists will have to pay a little more to visit New Zealand, with the government upping the cost to enter the country by close to 200% from October. As Stuff’s Glenn McConnell reported, the International Visitor Levy – a tax that applies to most tourists visiting New Zealand – will rise from $35 per head to $100. That means a family of four would be required to pay $400 as opposed to $140, worrying some in the tourism sector that it could deter visitors from coming at all. As MBIE explains, the levy goes toward funding and maintaining projects that are commonly used by international tourists – that includes simpler things like upgrading information centres or more complex issues like supporting conservation efforts.
Tourism minister Matt Doocey said that tripling the levy would mean allowing for the tourism sector to grow and he was confident it won’t dent the number of arrivals.
The question of ‘high quality’ tourists
That’s not the view shared by the chief executive of Tourism Industry Aotearoa, Rebecca Ingram, who told the Herald the increased levy could mean 48,000 fewer visitors – a loss of $273m in visitor spending. “So far, we’ve received no signal from government on its investment plan for the increase in funds from the levy,” said Ingram. The Board of Airline Representatives expressed similar concerns, saying that the outlook for inbound tourism was “soft” with just a 2% increase expected on the number of flights into New Zealand.
Increasing the levy won’t stop all, or even many, tourists from visiting New Zealand – but it could change the types of tourists that choose to come. In 2022, reported The Guardian, former tourism minister Stuart Nash made headlines after saying he wanted to target “high quality” tourists and not those who “travel around our country on $10 a day eating two-minute noodles”. Clearly, high spenders won’t care if it costs more to enter the country (Nash had also proposed raising the visitor levy to $200 while in government, reported Stuff’s Andrea Vance in 2022). This piece in The Conversation looked at the tension between whether we should be targeting mass tourism or just the big spenders, noting that openly targeting “high-value visitors” by increasing the levy suggested other visitors are low-value. “If the essence of manaakitanga is that people arrive as strangers but leave as whānau… the authenticity of New Zealand’s overall messaging needs to be clear”.
A change of heart
The visitor levy is just five years old, having been introduced by the Labour government in 2019 – just before borders closed and international tourism came to a halt for about two years. At the time, reported the Herald’s Lincoln Tan, the then-opposition National Party was critical of the “tax”, saying it had dampened the number of visitors to the country. “We're already seeing the consequences... with falling numbers from major markets like India and China," said Todd McClay in October 2019. As part of the party’s 2020 election proposal, reported RNZ here, the party also wanted to “freeze any new charges or levies for tourists”.
The party had previously viewed the levy as something of a slush fund, explained Newsroom’s Andrew Bevin summarised, though it’s clearly had a change of heart since entering government. Tourism minister Matt Doocey said funds gathered via the levy allowed the government to “react nimbly” to issues facing the sector, but didn’t currently raise enough money to cover all costs. Speaking to Newstalk ZB’s Heather du Plessis-Allan yesterday, Doocey said the $100 levy was less than 3% of a visitor’s total spend while in Aotearoa and would mean “delivering a better product” for arrivals.
What about a bed tax?
Part of the reason a visitor levy was introduced in the first place is that while tourists contribute to our overall tax take via GST on purchases, they otherwise got a pretty cheap ride when it came to their contributions to things they used. Another solution to this problem that is routinely floated is a so-called “bed tax” a levy charged per night for those using accommodation providers like hotels and Airbnb. Proposals for a bed tax tend to be regionally-focussed, such as in Queenstown where there has been support from both council and ratepayers for a number of years for a targeted 5% charge on accommodation. Crux reported last year that despite local support, then-opposition leader Christopher Luxon had ruled out supporting the idea. At the recent local government conference in Wellington, reported RNZ, a number of councils also expressed a desire to be able to implement new levies.
So far, the government has appeared cool on the idea. However, reported Newsroom’s Tim Murphy earlier in the year, Auckland is betting on it becoming a reality across the country. The council had previously implemented a targeted accommodation rate charged on hotels rather than tourists, prompting a court battle that went all the way to the Supreme Court. Mayor Wayne Brown wants a new nationwide bed tax of 2.5% and, he claimed, the prime minister Christopher Luxon was “gung ho” for.
Watch: A brand new episode of Takeout Kids
In the third episode of Takeout Kids we meet Lauren, a doughnut slinger by night and high school student by day. Mounting career pressure from school and whānau leads Lauren to ask herself whether she wants to stay in the family business, or explore the world – big decisions to make on a small amount of sleep. But first, she must deal with an hour-long backlog of doughnut orders and sit her driver’s test.
Takeout Kids is made with the support of NZ On Air.
Politicians to converge on Tūrangawaewae, new monarch to be revealed tomorrow
MPs from across the spectrum will be welcomed onto Tūrangawaewae Marae today to pay their respects to the late Kīngi Tūheitia. The Herald’s Julia Gabel has reported that Chris Hipkins, David Seymour, Winston Peters and Chlöe Swarbrick will lead members of their respective parties to the marae. Former prime minister Helen Clark will also visit.
While attention remains on farewelling Tūheitia, behind closed doors important decisions about the future of the Māori monarchy are being made. The Spinoff’s Liam Rātana has prepared an insightful and gripping explainer of how a successor to Tūheitia will be decided on. As he writes, that decision could be made public as soon as today, though is more likely to be revealed prior to the burial of the King tomorrow.
Rātana writes:
While the position of Māori monarch is not hereditary, every king or queen has so far been a direct descendant of a previous monarch, from Pōtatau Te Wherowhero, the first king, to Tūheitia. However, after any reign ends, it is possible the role could be handed to someone from another whānau or even iwi. The people deciding just who will take the place of Tūheitia have been chosen especially by him to serve as representatives of all Māori. The group, known as Tekau-mā-rua (12 – the number of members), is currently made up of iwi representatives from around Aotearoa.
Why the Covid inquiry findings could be kept behind closed doors
The government is due to receive the findings from the first round of the official inquiry into the Covid-19 response this November. But, as Newsroom Pro’s Marc Daalder reported (paywalled), it could be several months before it’s released to the public. Internal affairs minister Brooke van Velden will be among the first to read the report that’s been headed by epidemiologist Tony Blakely, though according to Daalder’s report, the rest of us might have to wait until February 2026 when the second phase of the inquiry reports back.
A second inquiry was a coalition requirement ordered by New Zealand First and will look more closely at issues like vaccine safety and efficacy. Van Velden said holding the report – at least until the second phase has concluded evidence gathering, but potentially longer – would ensure the Royal Commission was acting independently. Labour’s Chris Hipkins said holding back the review’s findings would be “unprecedented” and, given Royal Commission reports were required to be tabled as soon as practicable, a “flagrant violation of the law”.
Show your support, join up today!
"As a New Zealander living in Sydney, The Spinoff helps me to feel in touch with what's happening back home. There's a great breadth to the content – and the enthusiasm from your contributors is palpable. I feel happy and proud to be a member." Ian, Sydney.
Whether living here or abroad, if you value our work please show your support by becoming a member today.
Click and Collect
A fascinating Cover Story on The Spinoff this morning: Meet the New Zealanders fighting in Ukraine.
The prime minister has wrapped his visit to Malaysia and heads to South Korea where, Tova O’Brien reports, he will absolutely not be bringing up the cancelled ferry deal.
Off the back of yesterday’s transport discussion, I enjoyed Charlie Mitchell’s analysis in The Press about Canterbury’s missing transport billions. Per capita, the region received the least amount of funding in the new National Land Transport Programme.
The Ministry of Social Development will permanently ban staff from using fake profiles on social media sites to spy on beneficiaries in fraud investigations.
For Herald Premium subscribers, Michael Morrah reveals that the Civil Aviation Authority has ordered an independent review into workplace culture. (Paywalled)
Are you saving enough for retirement? Experts say the minimum 3% Kiwisaver contribution rate isn’t enough to be putting away.
New Zealand First minister Shane Jones is now entitled to his party’s crowning initiative: the SuperGold Card – and Lyric Waiwiri-Smith has some tips for how he can make the most of it. In the third of a three-part series on Ngā Mātāpono, the Waitangi Tribunal’s report on the proposed Treaty Principles Bill, Luke Fitzmaurice-Brown explains what the tribunal says about specific breaches of the Treaty/te Tiriti, and the damage those breaches will cause.For the latest in our Cost of Being series: A 35-year-old apartment owner with a “weakness for pastries”. And if you missed yesterday’s Bulletin on the “politics of potholes”, find that here.
That’s it for this morning, thanks for reading. I’ll be back tomorrow.
Want to get in touch? Join the conversation in the Substack comments section or via email at thebulletin@thespinoff.co.nz if you have any feedback on today’s top stories (or anything else in the news).
If you liked what you read today, share The Bulletin with friends, family and colleagues.
For me, no problem with visitors having an increase when arriving, but do I trust this govt to put the funds where they should go? Sorry ... no 🤬 Without understanding fully all the pros & cons, my instinct is for this entry $ to truly go to Conservation infrastructure and projects, PLUS something like a "bed-tax" for local authorities to support THEIR infrastructure such as sewage & clean drinking water etc. Small amounts on an accommodation stay so that local ratepayers don't shoulder the burden of a national tourism industry.
Genuine high value tourists get tax breaks /s