Listen: Tourism Minister Matt Doocey on hiked tourist levy
Aotearoa's door charge is about to get a whole lot more expensive, and there questions over exactly what the money will be spent on and whether it will be worth it.
From next month the international visitors levy (IVL) will more than triple from $35 to $100.
International visitors spent over $11 billion in the year ending March 2024, but being popular comes with a cost - increased pressure on regional infrastructure and maintenance costs across the conservation estate. And the government says the increased levy will help cover the bills.
But some in tourism say the changes will make New Zealand more expensive and less attractive as a destination, damaging an industry that has not yet bounced back from the pandemic.
Tourism Minister Matt Doocey, speaking to RNZ's Checkpoint on Tuesday afternoon, said the government received "well over 1100 submissions" on changing the levy.
"It was fairly overwhelming - 93 percent of submitters wanted the IVL to increase. Two-thirds of them wanted it increased to $100, and about 83 percent said that money should be spent on covering the costs… due to international tourism."
Asked how many people would be put off visiting New Zealand as a consequence, Doocey said the advice he had received was that there would be no "significant" decrease in visitor numbers, contrary to what tourism industry has said.
"The advice that I've received from officials is there is no evidence that the increase of the IVL will have significant impact on visitor numbers. In fact... most tourism operators are telling me that they're getting higher yield from their products and delivering better quality experiences."
He said he was not given a specific number of how many would-be tourists would be put off coming to New Zealand.
"When you look at on average what a tourist will spend over their visit to New Zealand, the increase to the IVL represents about 2 percent of that - comparative to Australia and also to the UK."
Tourism Industry Aotearoa chief executive Rebecca Ingram last week said their calculations suggested a $100 levy could result in 48,000 fewer visitor arrivals and put $273 million of international visitor spend at risk.
"This would create a significant barrier at a time when the industry, our second largest export, is sitting around 80 percent of recovery."
Asked if we already had enough visitors, considering the risk to the environment, Doocey said the IVL would offset some of that.
"The IVL is hypothecated 50 percent towards tourism and 50 percent towards conservation. Currently with the rate at $35 that returns about $40 million a year to tourism and $40m to conservation."
When the IVL was introduced in 2019, the estimate was it would bring in nearly $100m a year - but before the pandemic hit.
Doocey said the increase to $100 would see both get about $115m a year.
"We want to grow tourism… it brings jobs and income."
He said the government currently spent more than $800m a year on tourism and conservation, but would not confirm whether the new funds from the increased IVL would be on top of existing funding, or used to offset potential future cuts.
"We will be shifting some of the cost from the taxpayer to the visitor. The advice I have is currently there is a $250m a year deficit… some of the pressures that international tourism places on our national parks, that is where we will be investing the IVL."
'Bait and switch'
Cath O'Brien from the Airline Board of Representatives told Checkpoint Doocey's claims were "interesting" and not backed up by the evidence.
"In 2022 the Ministry of Business completed a regulatory impact statement that specifically gave evidence of demand reduction for tourism in the face of increased international visitor levy costs," she said.
"At that time, they were talking about visitor numbers decreasing by 92,000 to 101,000, potentially reducing on-the-ground expenditure from those visitors within a range of $100 million to $597m."
She said there was no opportunity in the consultation period to question what the extra money would be spent on, if it was indeed extra money at all, calling the government's proposal "back-of-an envelope kind of stuff".
"I actually think that what we are seeing here is a bit of a bait and switch. It is a bit of a swap-out of existing Crown revenue and we are levying visitors instead to collect that. In the Budget announcements of 2024 what we saw is Tourism New Zealand being defunded, and so this IVL announcement partly recovers that funding."
She dismissed concerns New Zealand had too many visitors for the environment to handle, saying numbers were down on previous years outside of the December/January peak.
"Look, I think that whatever we levy for anything we should be levying something that is is costed and as fair and as for something, right? And so, if we knew what it was that we wanted to spend money on, which I would suggest that we don't, and then you know, then we could consider who is the appropriate payer for that for that cost.
"And in the consultation that MBIE put out on the international visitor levy there was no opportunity to examine anything like that because the information simply was not there."
