A tourist tax?

The Herald reports:

Labour leader Andrew Little wants a “tourist tax” charged at the border to help pay for tourism infrastructure, rejecting Tourism Minister Paula Bennett’s concerns it risked making New Zealand look like a “rip-off.”

Little said a “modest” levy would be ring-fenced to pass on to local councils to use on tourism-related infrastructure.

“We rapidly and urgently need new infrastructure and infrastructure upgrades targeted at tourists and the easiest and most efficient way to pay for it is just a border levy collected when you buy your ticket, and a mechanism to distribute it to local councils.”

In my experience modest levies become immodest levies over time.

Foreign tourists do pay tax – around $1.1 billion a year. It is called GST. It is also proportional – the higher spending tourists pay more than the backpackers. Those who spend more time in NZ pay less than those here for a brief conference.

A new levy charged on airfares would hit the low budget travellers, who are the ones most price sensitive.

So I don’t see a need for a new tax. What we simply need to do is have say a quarter of the $1.1 billion currently collected, allocated to local councils for tourism infrastructure.