No firm support for airport tax

Queenstown's mayor and councillors have been asked to nail their colours to the mast about a potential passenger tax at the airport.

Extinction Rebellion's local representative Pierre Marasti wrote to the elected members, community board members, and Queenstown Lakes District Council CEO Mike Theelen a fortnight ago, 1 August.

"A large passenger tax at the airport would reduce flight numbers to Queenstown and would raise large funds for the community, enabling us to decarbonise, to adapt and to maintain high quality infrastructure while keeping our rates at an acceptable level," the letter reads.

Even with a record average rates increase of 14.2%, the council "is unable to finance the infrastructure our community needs ... and has just deferred 47 important infrastructure projects around 3 water, transport, waste and other areas in the 2023-2024 draft annual plan", he says.

"Queenstown Airport is by far the largest source of pollution in our district. It already emits 13 times more than all other activities in the district and QAC wants to increase the number of passengers another 30% in the next 10 years."

That will have the double impact of creating more emissions "fuelling the climate collapse" and "putting more pressure on local infrastructure."

"This will not sort itself out by magic, something needs to happen," it reads.

Marasti says this is the first time in five years of campaigning that Extinction Rebellion has contacted councillors individually.

He asked them to say whether they were in favour of the passenger tax, or not, or at least open to the idea of discussing one.

So far, he's received eight responses to the 19 emails, from Deputy Mayor Quentin Smith, Cr Niki Gladding, Cr Esther Whitehead, Cr Craig Ferguson, Cr Mat Wong, Cr Cody Tucker, Cr Lisa Joy and Wanaka-Upper Clutha Community Board member Linda Joll, but nothing as yet from Mayor Glyn Lewers, or Theelen.

Smith says he is "in principal supportive on any mechanism that can assist us with funding of infrastructure and climate response costs from our visitors", while Whitehead also says she supports "the sentiment of a passenger tax at the airport" and is open to discussing the idea.

Joll says she supports the tax, but only for tourists, not commuters.

Others, including Matt Wong and Cody Tucker, favour a more holistic visitor levy, often labelled a bed tax, which could be easier to get over the line and capture more of the market, including those who arrived by road, after flying in elsewhere.

Gladding is open to discussing the idea but would rather see a cap on emissions and a limit on flights, which could be achieved by not allowing the airport to expand.

She worries a tax could have the unintended consequence of "driving decision-makers to increase tourist numbers" to increase revenue. In terms of infrastructure, she believes QLDC should spend more on the basics and "less on pimping up town centres".

Several councillors, including Cr Ferguson and Cr Joy, raised questions around the workability of such a tax, including the legality and scope.

Queenstown Airport Corporation (QAC) boss Glen Sowry says an "airline passenger tax" is not something QAC could collect.

"Queenstown Airport does not directly charge passengers, the airlines do and under the Civil Aviation Act, an airport operator may set charges for identified aerodrome activities provided, operated, or managed by the airport operator," Sowry says. "Therefore, the airport company would not be able to charge passengers an airport tax with funds collected to be spent as outlined by Extinction Rebellion."

Marasti tells Lakes Weekly the Government would simply need to adapt the laws to make it possible, as it would with a bed tax. He believes a passenger tax, rather than a bed tax, is the best mechanism to directly reduce the number of flights, and says the tax should capture locals commuting too, because otherwise they'll be paying the infrastructure shortfall through their rates anyway.

 

He spoke in Thursday's council meeting public forum, reminding councillors of the urgent need for climate action.

"The only thing I am doing is repeating the scientific consensus, and the most conservative, which is from the IPCC. They are very conservative but even they are urging the world to at least halve its emissions in six years, by 2030," Marati says. "Otherwise, we will probably lose control of the situation, and humanity will not be able to stop the warming of the planet anymore."

 

 

Banking on greener aerodrome

Queenstown Airport Corporation has linked the interest rates it will pay on its debts to meeting sustainability targets.

Its $100 million of bank lending credit, through Westpac NZ, BNZ, ASB and Bank of China, has been converted to 'sustainability-linked loans'.

Queenstown Airport Chief Financial Officer Andrew Williamson said: “We have set some clear targets in our sustainability strategy.

"The decarbonisation of on-the-ground operations and the terminal is an immediate priority, and we have made some good progress to date. We’ve worked with our banking partners to set ambitious targets to hold us to account as we continue to implement our sustainability strategy and decarbonisation roadmap."

Four areas have been targeted under the loan terms:

- Achieving Level 4 Airport Carbon Accreditation, the leading global certification for airport carbon management

- Reducing Queenstown Airport’s Scope 1 and 2 greenhouse gas emissions, supporting our net-zero commitment

- Installing infrastructure that supports reductions in Queenstown Airport’s Scope 3 greenhouse gas emissions, including enabling electrification of parked aircraft, ground service equipment and charging infrastructure for electric vehicles

- Reducing the waste sent to landfill across the terminal precinct.

Scope 3 emissions themselves, i.e. aircraft emissions, are not seen as the responsibility of the aerodrome, but instead the airlines and NZ as a whole.

While the sustainability-linked loan targets and timeframes are consistent across the four banks, QAC has negotiated the specific rates separately with each of its four banking partners, so won't reveal them. Performance against each target is assessed separately.

General Manager Sustainability and Corporate Affairs Sara Irvine says: "We are confident that, while ambitious, we can meet the majority of targets, if not all.

"If we were not successful in meeting all of the targets there would not be a meaningful impact on shareholder dividend."

QAC's major shareholders are Queenstown Lakes District Council (75.01%) and Auckland Airport.

The sustainability targets were externally reviewed by independent global environmental, social and governance (ESG) ratings firm Sustainalytics and align with the Asia Pacific Loan Market Association’s Sustainability-Linked Loan Principles (as of February 2023).

Queenstown Airport will ensure accountability by reporting independently verified target achievements to its lenders each year.

Extinction Rebellion's Pierre Marasti says focusing on the aerodrome rather than the flights is "a distraction".

"The changes are positive, of course, but I doubt they would even offset the emissions from making the airport bigger."