A bed tax proposed for Queenstown and Wanaka has been lowered to appease accommodation providers – but opponents claim it’s still unfair.
Mayor Jim Boult says Queenstown Lakes District Council has listened to accommodation providers and set the rate at five percent, despite estimating the figure should be 8.3 percent to cover the anticipated $374 million cost of visitor impact on the district over the next ten years.
Ratepayers will be required to make up the shortfall under the council’s amended proposal.
However, opponents of the levy plan, including the 130-member Tax Equity Group led by local hotelier Nik Kiddle, still want to see the mayor’s plan ditched in favour of an alternative funding model.
“We see the climb down to five percent as continuation of a flawed plan,” Kiddle told AccomNews.
“We will continue to oppose it. Our position, shared by Tourism Industry Aotearoa and Hospitality NZ, is that better use of existing taxes is the right approach.
“If the council cannot make better use of existing tax, then we could contemplate a new charge that applied across all the tourism businesses in town, including the ones that the mayor is a director of. But this would be a last resort.”
The group wants to see a proportion of GST from Queenstown’s tourism income invested back into the district, a proposal central government will not support, according to the mayor.
If the visitor levy plan wins majority support, Mr Boult says, the Ardern government has indicated it will consider introducing legislation to bring it into effect.
Mr Kiddle argues that if the GST plan pushed by Tourism Industry Aotearoa is a non-starter, all tourism operators in Queenstown help shoulder the burden of a visitor levy currently targeted at just accommodation providers.
Mayor Boult has long supported a bed tax to fund tourism infrastructure and development, arguing a district of just 20,000 residents cannot be expected to sustain support for an annual tourist influx of three million.
His proposal has the support of Local Government New Zealand and Airbnb but is opposed by Tourism Industry Aotearoa and Hospitality New Zealand.
District residents will be asked whether they support the levy in a non-binding postal referendum later this month.
According to the council’s financial officer Stewart Burns, a five percent bed tax would raise $22.5 million each year based on current visitor statistics. The funding would cover all tourism capital costs, he says, but a portion of the operational costs would need to be funded by rates.
Mayor Boult hopes the levy will come into effect by mid-2021 and argues the alternative is an enormous increase in rates or a decrease in tourism spending for a town in urgent need of infrastructure development.