Should Councils be able to impose a visitor bed tax?

The Prime Minister is delivering a stern message at the annual Local Government New Zealand conference in Wellington: tighten your belt before asking for central government help.

Councils are urging the government to give them more ways to fund themselves, and are pointing to a poll suggesting the public supports accommodation and tourism levies.

James Doolan, Board member Tourism Industry Aotearoa & Strategic Director for the Hotel Council, called Simon Barnett and James Daniels in reaction.

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Simon Barnett and James Daniels Afternoons
podcast from News Talk ZB.

Speaker 2 (00:12):
James Dolan's given us a call. He's a board member
of the Tourism Industry are tiot Are and strategic director
of the Hotel Council Good.

Speaker 3 (00:19):
I James, Hello, Chance, how are you good?

Speaker 4 (00:22):
Mate?

Speaker 2 (00:23):
Well, I'm picking you're not a fan of the bid text?

Speaker 3 (00:26):
Hey, you know what you picked that wrong side. The
hotel industry has come out and said we are not
opposed to new revenue mechanisms if they're done right right.
But there's a lot of weight being put on the
words if they're done right.

Speaker 2 (00:42):
Yeah, I say that, how would they be done right
in your view?

Speaker 3 (00:46):
Well, I'll tell you what you know. We've got local councils,
local Government, ends ED which is a lobby group, and
some leading mayors around New Zealand. And I'll tell you
what they're not doing. They're not talking in good faith
with industry about this. They're off lobby and government instead.
And you know this is a big issue because in

(01:06):
New Zealand, local councils don't have the ability to put
a revenue tax on a business. And I don't think
they should have that ability. Only about twenty or thirty
percent of New Zealander's vote in local council elections. So
you know, a bed tax done right wouldn't be a
decision taken by a local council. It would be a

(01:26):
decision done nationally and done by talking to industry. Ye.

Speaker 4 (01:31):
Yeah, but they can talk to you directly the government
through the select committee process. Do you need a council
to deal directly with you, guys?

Speaker 3 (01:41):
Well, this is what the councils are asking for. They're
asking for the power to decide at a local level,
whether it's you've said five dollars, two and a half percent,
twelve percent, who knows? And I don't think. I'll tell
you what. The industry does not trust local councils to
have that power.

Speaker 4 (02:01):
How do you get on? How do you get on
with Auckland City Council who wanted to institute an accommodation
rate and then they were taken to court by hotel providers.

Speaker 3 (02:11):
Well, I'll tell you what they did. They didn't have
the power to put bed tax on. They didn't have
the power to do that. So what they did was
they increased your property rates by massive amounts. And if
they hadn't suspended that property rate the accommodation provide a
targeted rate, then lots of small motel owners would have

(02:31):
gone bankrupt. That's how badly designed it was. Right, and
this is a complex area because if an American buys
a New Zealand hotel room through an American online travel
agency who collects the tax, we've got we've got computers
talking to each other, We've got agents who sell packages

(02:53):
to Chinese travelers, and all of the rates are kind
of blended together. This is complex stuff. We've got to
do it once, and we've got to do it right
for all of New Zealand, not Allman Council or Queenstown
Council running off doing their own thing.

Speaker 2 (03:07):
So you'd you would be comfortable if it was through
central government, not local government, in other words, and central
government talking to groups like yourself, getting alongside you.

Speaker 3 (03:17):
Correct. And look, we totally understand and have sympathy for
the basic problem that say Queenstown Council has. And you
know what that problem is. Central government collects three point
nine billion dollars in tourism GST and they keep it
all most of it for themselves. That's the main problem. Interesting,
So that's the problem that bad tax would solve, and

(03:40):
it would help potentially get new money for the councils.
But and it's a very big butt. No one in
industry wants local councils kind of creating their own tourism taxes,
and no one wants all sorts of different levels of
tax up and down New Zealand. That would be a
terrible results.

Speaker 2 (03:59):
I agree with that. That's very well said, James. Do
you think, because we've got a lot of texts saying
that five dollars it's just going to put people off.
We're struggling with tourism in this country. We're really at
the low end of the totem pole in terms of
attracting tourists. Do you think five dollars would be a
sort of a negative for people wanting to come to insit.

Speaker 3 (04:18):
I don't for a second think five dollars is the
number that would make anyone happy on the council side.
So you know, that's a first comment. But we've got
to be very careful right now because New Zealand has
not got the same number of visitors back as we
had in twenty nineteen, and we've already increased our visa
charges by about eighty dollars ahead, we're about to increase

(04:40):
our border tacks by anywhere between fifteen to sixty five
dollars per head. And if there's a new accommodation levy
introduced nationally in New Zealand, it's not going to start
from tomorrow right. This is going to take years, a
couple of years at least to do properly.

Speaker 2 (05:02):
James, excellent to talk to you. Thank you very much
for calling us really really good thoughts.

Speaker 3 (05:06):
Thank you, James dool.

Speaker 2 (05:07):
On, board member of Tourism Industry Al Tirtre and strategic
director at the Hotel Council.

Speaker 1 (05:12):
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