Travel Levy breaches long-standing agreement

22 May 2015 8:57 AM | Louise Stokes

The Government's plan for a border clearance levy on passengers flying in or out of the country will irritate travellers, a tourism sector leader says.


The Tourism Industry Association, that represents industry members including Air New Zealand and Christchurch and Auckland airports, will submit on the levy plan that "will be an irritation for some", TIA chief executive Chris Roberts.


"We're disappointed to see this happen."


The levy is expected to take effect from  January 1, and will be around $16 for arriving passengers and around $6 for departing passengers – although the exact amounts will be subject to public consultation.


There is already an existing charge on travellers. The levy, when combined with existing charges will be around $36 for a return journey.


Roberts said the levy had been a total "surprise". TIA would likely make a submission about the process.


The idea that the Government would introduce a levy flew in the face of lobbying it had previously made against a similar tax in the United Kingdom. The New Zealand Government was worried it would discourage travellers.


There was also the potential danger with such a levy that it could easily be raised if the Government had a shortfall in its overall tax take, Roberts said.


The new border clearance levy will help the Government to protect New Zealand from imported pests, diseases, illegal drugs and contraband. "In the past, these costs have been met by taxpayers. The Government considers it is fairer for the costs to fall on passengers travelling internationally," Primary Industries Minister Nathan said.


Roberts said international passengers to New Zealand already paid taxes, such as GST that helped pay towards costs associated with their stay here. "International visitors are spending $10.3 billion a year in our economy and that includes $700 million a year in GST, collected by the Government.


However the TIA did not expect the would have a significant impact on visitor arrival numbers "at least in the short term", given that New Zealand was such a hot destination right now, he said.


Visitor arrivals to New Zealand numbered 2.96 million in the 12 months to April 30, which is the highest-ever annual total, Statistics New Zealand said on Thursday. This total was 7 per cent higher than the April 2014 year.


Tourism New Zealand chief executive Kevin Bowler said the numbers, driven in part by China and United States arrivals, continued a positive outlook for the tourism industry.


He was not going to oppose the introduction of a border levy and did not expect it to have an impact on arrival numbers.


However, "at the end of the day, we're probably in the camp that says anything you can do to make travel cheaper and more affordable for people is a positive thing ... (but) my feeling is it is not going to make a big difference." 


Roberts noted that from early June, the public and industry will get the chance to provide feedback on the design, introduction and level of the levy.


Wagner said the move brought New Zealand in line with many other countries that recover costs from passengers, including Australia, the United States, the United Kingdom and China.


This announcement is part of a range of measures in Budget 2015 to improve security and services at the border, involving immigration, customs and biosecurity.


- Sourced from Stuff


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