The Queenstown Lakes District Council (QLDC) continues to plan for a local bed tax, despite opposition from accommodation providers and tourism minister Stuart Nash making it clear that bed tax is not on the government’s agenda.

QLDC mayor Jim Boult has long promoted the introduction of a district-wide visitor levy or “bed tax” and the council’s draft Long-term Plan 2021-2031 makes the assumption that central government will approve it to be implemented from mid 2024.

The draft LTP estimates the levy would recover $162.8M over the seven years (2024-2031) and the money would be used to fund the capital expenditure attributable to visitors. 

“If the visitor levy were not available, the capital programme from 2024 to 2031 would need to be reduced significantly or rates increased by a further 2.3 per cent per annum for the last seven years of the plan,” the LTP states.

Opposition to the tax remains, however, with many saying it is unfair, ill considered and damaging to tourism.

Stuart Nash. PHOTO: Supplied

Wanaka local Peter Sutherland, who represents the Lake District Accommodation Sector, said in his oral submission to the council’s LTP hearings recently, the council has provided no economic analysis to support its view a bed tax will not negatively affect accommodation businesses.

The council has not considered accommodation operators will need to rebuild their businesses when the borders eventually reopen to all overseas visitors, and the council’s belief the Lakes District’s economy will “return to business as usual in two years [is] an unlikely outcome”, Peter said. 

Loans which have kept the business afloat will need to be repaid; maintenance and capital expenditure deferred during the pandemic will be a priority; a tax on top of that is not welcome, he said.

Speaking on behalf of Tourism Industry Aotearoa (TIA), Matt Ammunson-Fyall said in his submission to the LTP that bed taxes by their nature are unfair and target only one sector of the tourism industry. 

The Queenstown accommodation sector received 13.3 per cent of the visitor spend (to the year ending October 2020) which as a percentage is consistent with pre-COVID data, yet accommodation operators are being asked to pay 100 per cent of the visitor levy.

Matt said if the council expected to earn $162.8M over seven years from this tax that equates to adding an average $23.3M per annum to the costs of local accommodation.

He added that collecting a bed tax was not without its challenges and would also affect council’s expectations of how much income the tax will earn. Auckland Council implemented its Accommodation Provider Targeted Rate (APTR) in 2017 but attempts to get the non-commercial accommodation sector to contribute to it have largely failed, with fewer than one third of these operators paying the rate.

Rather than commit to a local bed tax, “we recommend council spends the next three years identifying suitable alternatives that do not target just one sector of a town where many others benefit from the visitor,” Matt said.

Tourism minister Stuart Nash said he was “not looking at a bed tax” in answer to a question in Parliament on May 11.

His press secretary Kathryn Street confirmed this to the Wanaka App. 

“After becoming Tourism Minister, the issue of an accommodation levy was raised in a general sense with Mr Nash during meetings with some council representatives. However Mr Nash has ruled out any suggestion the government will consider introducing legislation to enable this,” she said.

Contrary to this advice, QLDC media and channels advisor Jack Barlow told the Wanaka App: “QLDC considers there to be central government support to advance a visitor levy at a local level, and will look to do so as outlined in the Ten Year Plan.”

Local authorities have the option of asking their local Member of Parliament (in this case, Joseph Mooney) to introduce a piece of legislation on their behalf, if they wish to introduce such a levy, Kathryn said.

Jack said the QLDC has not yet approached the local MP on the matter.