Tourism industry counts cost of proposed travel tax

A consortium of travel industry organisations – from airlines to accommodation providers to cruise ship operators – say a proposed border tax will cut international visitor numbers and spending.

The Coalition Against Travel Tax (CATT), led by the Tourism Industry Association (TIA), says the Border Clearance Levy introduced in the May Budget will be a handbrake on burgeoning traveller numbers.

In a submission opposing the levy, CATT says an independent analysis commissioned by the government estimates overseas visitor numbers will drop by 1.4% and cut their expenditure 0.9%.

This equates to a loss of 44,000 visitors a year and spending of $104 million, CATT spokesman and TIA chief executive Chris Roberts says.

He says further analysis from the international airline and cruise industries suggests this may underestimate the impact. For example, the international airlines organisation, Iata, says it would cost the aviation industry $33 million in lost revenue, and cut 200 jobs.

The loss to tourism would be $196 million and job losses of 1700. This is based on the impact in other countries that have imposed or cut travel taxes.

The proposed costs of more than $20 per return air trip would three times the average net profit (of $US4.24) that Asia-Pacific airlines make on each passenger.

The extra levy on cruise ship passengers, who could pay up to $26, could cost that industry up to $85.2 million in added value losses and 1600 jobs in the 2018-19 year, an estimate shows.  

New Zealanders will make up almost half of the travellers required to pay the travel tax as they leave and arrive. 

CATT has urged the government to delay the empowering legislation, passed immediately after Budget 2015, until January 1, 2017, to minimise its impact.

It also says the tax should be zero-rated for GST. The government says the levy is to help offset the cost of border protection provided by the Ministry for Primary Industries and New Zealand Customs.

RAW DATA: Submission to NZ Customs Service and the Ministry for Primary Industries on the Implementation of the Border Clearance Levy (PDF here)

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