New Auckland Mayor Phil Goff has proposed a $5 – $10 a night visitor levy for Auckland. How about Thames-Coromandel District Council fights back and introduces a levy on those much-loved Aucklanders who clog our roads and supermarkets over summer, and on other New Zealanders, and international tourists who visit the Coromandel?
If the Auckland announcement is any indication, there will be divided opinions on the merits of the proposal. You can expect local hoteliers and moteliers to be strongly opposed with the argument that they are being targeted. But is this really the case? Accommodation providers will not have to pay the levy – this will be paid by their guests. They will however have to collect the levy, and pass it on to the Council. Accommodation providers do benefit from local council’s funding of Destination Coromandel, which in effect provides free advertising for them, so it’s not just a one-way street.
Another argument is that a levy would discourage tourism, but again international experience would suggest this is not the case – visitor levies are commonplace throughout western democracies. Would an additional $5 – $10 levy be noticed when the guests could be paying $200 – $300 a night for accommodation? Apparently the Auckland proposal would have a much lower levy for backpackers.
Another issue is whether private home and bach owners should or could be included in such a levy scheme. Phil Goff says that he is in talks with AirBnB about them being included in the scheme and obviously bach rental companies such as BookaBach and Holiday Homes would have to be included in the discussions. There are some thorny issues with those latter 2 companies as many bach owners collect rentals directly from their guests.
The huge influx of visitors, particularly over the summer holiday season puts financial pressure on ratepayers to provide local infrastructure, so wouldn’t a visitor levy be an efficient and equitable way of making sure those visitors paid their fair share?
How much would such a levy raise? Destination Coromandel’s latest Annual Report reports that there are 841,000 commercial visitor nights each year, 20% of which are overseas visitors.
So, a back of the envelope calculation of a levy of just $5 per visitor per night would raise $4.2 million? Not to be sneezed at. If the levy could be extended to AirBnB and possibly other private home renters the figure would be considerably higher. That would pay for an awful lot of infrastructure, public transport and maybe some “nice to haves” and would ease the burden on ratepayers. Compare this with the earlier flawed Thames-Coromandel proposal to charge a levy on private bach owners, which was estimated to raise just $250,000.
Mayor-elect Goff is confident that his Council has the power to impose a levy by way of a targeted rate. This is certainly food for thought for the new Council.
There is a parallel proposal from The Greens for a visitor levy on all international visitors to New Zealand called the taonga levy. It seems to have some strong cross party support. The proposal is that the funds be split 70/30 – 70% going to predator free and other conservation projects, and 30% going to the government’s Regional Tourism fund. It is estimated this levy would generate around $80 million over 4 years for the Tourism fund, and if implemented Thames-Coromandel could expect to receive a nice slice of that pie also.
Update: Nationwide “bed” levy gets strong backing