Visitor levy on the horizon

Pictured:Mayor Jim Boult announced a non-binding referendum to propose a visitor levy for the district.|

When Mayor Jim Boult announced a non-binding referendum to propose a visitor levy for all visitors to the region, there was almost a collective sigh of relief across the region with many ratepayers thinking “about time”.

“Queenstown Lakes has one of the highest visitor‐to‐resident ratios in the world. No other city or district in New Zealand experiences the ratio of 34 international visitors per resident. By comparison the Auckland ratio is one to one and Christchurch is three to one,” Mayor Boult said. (Out of interest, Italy’s Venice is 74 visitors to each resident).

“The current model of funding infrastructure isn’t sustainable for providing for the people we encounter,” says local Councillor Quentin Smith. “Eventually it comes down to whether we as ratepayers are content to subsidise people’s holidays or whether it should fall on people who use the services.”
“The shortfall of the projected 10-year period is $300 million just in our district,” says Smith.

There is a proposed border levy by the government which would tax visitors across the country which could raise $80 million a year.

“But a chunk of that would go to Treasury and some to DOC then the rest get divided out to the regions,” says Smith. “But the proposal for a bed levy within our district which is charged through accommodation providers can provide up to $45 million just to our district. And we can elect and spend it how we want it.”

Smith is not opposed to there being both a national visitor levy and a local Queenstown Lakes levy: “They’re not necessarily mutually exclusive; we may end up having both. Especially as DOC may receive nationally attributed costs - but we need something local.”

But no sooner had the referendum been announced, that the hand-wringing began: how would it be implemented? Would it be a bed tax that’s up to AirBnB owners to charge and then pass on to council? Would it be an airport tax? Would it apply to foreigners only or all visitors to the region? How would freedom campers, the group that place significant stress on the region, be taxed?

“That’s one of the details to work through but we certainly anticipate that the levy will be applied to all accomodation from the Hilton to a campervan,” says Smith.

For small operators who are worried about the additional accounting and paperwork, Smith says he hopes technology plays its role in smoothing the path.

“Indications are that there are ways to collect it [automatically] through AirBnB and technology like Campermate that may allow us to charge directly. But the legislation that comes through government gives us the tools to collect,” he says.  

Naell Crosby-Roe, QLDC communications and engagement manager says, “We're finalising the wording but the referendum will essentially ask people whether they support the ability for QLDC to have a visitor levy in the district. There will be lots of accompanying information through our usual channels and with the voting papers that will explain how a levy would work, how it's collected, who pays and how much. We want to ensure that everyone can make a fully informed decision. We anticipate at this stage of presenting a preferred option and that the referendum will ask people whether they support or oppose the proposal.”

To raise the expected $45 million per year, the Otago Daily Times had calculated $7.50 per night, per visitor. However, council has since stated that the $7.50 figure was nothing more than speculative “Chinese whispers”. While the model for collecting the revenue is still in its nascent stages, it could be "a percentage of whatever a particular item would cost", rather than a flat fee.

One of the main criticisms made on social media was that the referendum is non-binding. However Crosby-Roe has emphasised, “The referendum is non-binding as it relies on legislative change being made by Central Government, which is out of our direct control.”

Housing and Urban Development Minister Phil Twyford said if a referendum showed clear support, the Government would consider any necessary legislation. This is a stark contrast to the preceding National government who stonewalled any suggestion of a visitor tax.

Voting will be by postal vote and papers will be delivered between May 14-19, with voting closing at noon on June 5. The preliminary vote will be announced as soon as possible after voting closes on that same day. The final result will be publicly notified June 8.

These are all timelines that are defined by the Local Electoral Act 2001 which is the legislation under which the referendum is conducted.


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