The Sunday Panel: Having camping costs gotten out of hand?

This week on the Sunday Panel, director at 818 Chris Henry and resident economist at Opes Partners Ed McKnight joined in on a discussion about the following issues of the day - and more!

What do we make of IAWAI’s proposal to charge new builds a growth charge for water infrastructure maintenance and upgrades? Is that a fairer option than all ratepayers covering the cost? Or should it be spread more evenly?

Are camping costs getting out of hand? Some places are charging $360 a night for a patch of grass. Is this what camping is about? Is this taking the spirit out of Kiwi camping? 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Sunday Session podcast with Francesca Rudgin
from News Talks EDB.

Speaker 2 (00:12):
It is time for the panel and this morning I'm
joined by director at eight one eight Chris Henry.

Speaker 3 (00:17):
Good morning, Chris, Oh morning, Francesca, how are.

Speaker 2 (00:20):
You very good? Thank you, and resident economists at op's partners.
Ed McKnight, Good morning, Ed.

Speaker 4 (00:26):
Great to be here. Francisca, Hey, guys.

Speaker 2 (00:28):
In the first hour of the show this morning, I
was talking to Airy CEO Peter Winder, and they are
looking at how they can afford new infrastructure in Hamilton
to do with water, right, so they're going to have
to build all these new homes. All these new homes
are going to get built in these new areas, and
they've come up with this proposal whereby a new property,

(00:52):
the household would pay five hundred dollars for twenty five
years for a residential new build and that is going
towards the water. That means that what other ratepayers are
having to pay is well in some cases have dramatically
or a lot less, and it in they trying to
come up they think this is a very fair way
of approaching things. I think this is kind of interesting.

Speaker 5 (01:12):
Ed.

Speaker 4 (01:14):
Yeah, it's quite interesting because when you build a new house,
you already pay a tax to the local council called
a developer contribution up here where live in Auckland that
can be twenty to thirty thousand dollars. And so I
look at this as an additional tax that you effectively
have to pay if you're going to or would need
to pay if you are building a new property. Now,

(01:36):
I do wonder about stringing it out for twenty five
years and getting people to pay five hundred dollars. I
wonder whether it's a better idea to lump it in
with the developer contribution and charge it up front. And
I know that might sound a bit strange, but if
you do that and charge the twelve and a half
grand up front, not only does the local council get
the money straight away, but then the home buyer would

(01:58):
be able to borrow the money against the mortgage and
pay it off however quickly or slowly they want, rather
than stringing it out for twenty five years.

Speaker 2 (02:05):
I like that. I like the idea that you're paying,
you know, I mean, most of the infrastructure is done
thanks to debt, and then you're paying off that debt.
The rate payer pays off that debt, but it's the
person who is benefiting from that new asset is paying
it off over a period of time. Like, that's what
you do. You expect that person to pay it off
over the next ten, twenty, thirty, forty years as they

(02:27):
benefit from that new asset. If you lump it all together,
you might sell that house in ten years time and
the next person comes in and isn't going to then
pay their fair share of paying for that new asset
that they're benefiting from.

Speaker 4 (02:40):
Yeah, I can see that argument. I just wonder whether
people might prefer it to be upfront, but we'll have
to see what comes out in the consultation.

Speaker 2 (02:47):
How do you feel about that, Chris? I do think
it's quite a fair approach. If you were moving into
a new subdivision in Auckland and someone turn around and went, oh,
by the way, you're going to be paying for the
new order infrastructure. It's five hundred bucks a year for
twenty five years, how'd you feel about that?

Speaker 3 (03:03):
Yeah, I mean, I definitely agree with you. Anything putting
it up front would be much more palatable and as
part of the cost of it, And I think it
does seem really fair. We all want the best services
that we can and for there to be new development.
You know, the user pays model in this situation, so
it's quite well with me.

Speaker 2 (03:20):
Does it open a can of worms, though, Chris, because
anyone paying rates will say I'm probably paying for something
I don't benefit from. If you you know that, I
might say, actually, I don't get my I don't know
my rubbish conectedt or I don't use the library, or
I don't do this, or I don't do that. But
I understand that we're all paying the same amount so

(03:41):
that all these facilities or all these services are available.
So at the moment, we probably are all paying for
things that we don't don't necessarily affect us. So does
it sort of open a bit of a can of
worms in that respect?

Speaker 3 (03:54):
It possibly could. But at the end of the day,
if we're doing new development, we need to be building
new infrastructure and the maintenance and upgrading effet stuff is
to allow there to be more infrastructure and more space
and more stuff for people to use. So I still
think it is fair that you would be contributing if
you are building new properties in the region.

Speaker 2 (04:11):
I like the idea ed because I think we've seen
councils try to be really creative and innovative in finding
ways to raise more money. You know, we've had you know,
Orklands tried to get the bad tax up and running.
We've been talking about, you know, taking the GST the
government receives off council services could be returned back to
the region be used. We're always trying to come up

(04:31):
with ways to make money so and then the government
shuts them more down. So I like the fact that
they're trying to think of the different way of doing things.

Speaker 4 (04:40):
Yeah, I think it's good that looking at different ways
to raise it up. The one three other reason I
was just seducing that maybe you charge it all up
front the way. I understand why they might not want
to do that because they won't want to be seen
to be taxing new developments because we still want to
build new houses. But if you put the tax up front,
just from a pure economic perspective, typically some of that

(05:00):
tax would be shared between the developer and the home
buyer because the developer might need to accept a slightly
lower margin, and so they might take That's what we
call the incidence of the tax some of that would
land on the developer if you changed it up front,
whereas if you charge it in this way, it goes
entirely on the home buyer. But again, I'm getting to
see what comes out in consultation and how people are

(05:22):
reacting to.

Speaker 2 (05:22):
It that your developer is already paying a fee and
the substantial fee, aren't they and they probably not wanting
to pay anymore. And of course we need the new homes,
and we don't, you know, we want the developers to
keep making them. So this is purely on the home owner.

Speaker 4 (05:38):
In this model, Yes it is. And I mean whenever
there is a tax right on a business, some of
it is paid by the business and some of it
has passed on through to the consumer. And I'm just
saying the way that they're trying to levy this fee
would be entirely on the consumer, whereas if you changed
it up front, the developer might have to accept a
ninety five thousand dollars margin rather than one hundred thousand year.

Speaker 1 (05:59):
Yeah.

Speaker 2 (06:00):
Wow, Look, when you're throwing all this money at a
new property, what's another twelve grand A.

Speaker 5 (06:04):
Chris, I definitely thinks the way it might it might
mean that you can't go and camp at the beautiful
Papamoa Holiday Park.

Speaker 2 (06:17):
Three hundred and sixty dollars a night was the quote
in what was being charged at one holiday park for
a camping site? Would you go camping for Strandon's I
mean beautiful spot threehndred's sixty bucks? Though, Chris, is that
what you'd pay for a camping spot each night?

Speaker 5 (06:34):
Is that?

Speaker 2 (06:34):
Is that your idea of camping in the traditional carry way?

Speaker 3 (06:39):
I mean, I'll be honest here, I'm not much of
a camper. Camping has never really been sort of right
up my alle. I mean, I love the idea of
going to the beach, I love the border, all of
that sort of stuff. But for three hundred and sixty dollars,
I think i'd rather a proper bed, a running water,
a shower, and the ability to make a coffee. I
don't know whether they're just for a piece of grass

(07:00):
than sixty dollars a night is worth it.

Speaker 2 (07:02):
I'll be saying, where's the yurt? Where's the glamping? You know,
wouldn't you it?

Speaker 3 (07:06):
Absolutely?

Speaker 4 (07:08):
I think you'd have to pay me three hundred and
sixty dollars to go campig But what I would say
is that this is the market in action. Right, We're
seeing some people say, look, this is too expensive. I'm
going to go somewhere else. Now this is owned, this
piece of dirt is owned by an Australian company, is
a very very beautiful part of the country. And ultimately
it's up to consumers to decide whether they're going to

(07:29):
pay that or not. Right, So, if we all think
that's too expensive, then we've got a choice. We as
consumers can decide not to not to rent that specific
really nice camping spot at a very premium time of
the year, and we might go somewhere else. And if
enough people do that, then this company might need to
drop their prices. But if people are willing to pay

(07:49):
the three hundred and sixty dollars per week, well that
tells you that actually some people think that that is
a fair price.

Speaker 2 (07:56):
The good old demands applied.

Speaker 4 (07:59):
I mean, I'm an economist, Francisca, you know what you
got when you asked me on the show. That's what
we get.

Speaker 2 (08:08):
Chris Henry and I McKnight, thank you both very much.

Speaker 1 (08:12):
For more from the Sunday Session with Francesca Rudkin. Listen
live to news Talks it B from nine am Sunday,
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