Queenstown Mayor Jim Boult has announced bold plans for a local referendum on a visitor levy (most likely to be a bed tax).
This puts me in a weird position.
I have been a vocal advocate of a nationally-implemented bed tax for a long time, but I hate the idea of a localist approach to such taxation.
We have 67 territorial authorities in New Zealand.
What if every local authority came up with their own unique and novel bed tax or visitor levy? Imagine the headache for national accommodation brands having 67 new taxes to get their head around and pay on time each month!
But Jim Boult’s hand has been forced. I get it, and I kind of respect his bold leadership.
Queenstown is groaning. We can’t cope here any longer, and we have had a succession of tourism ministers asleep at the wheel.
We clapped Tourism New Zealand on the back when they “boldly” started marketing in the shoulder season to bring in more visitors during seasonal ebbs.
But what we should have done instead is pushed the value, not volume, message harder.
Better tourists, not more of them.
At the same time, we should also have been forward looking and invested in the industry.
The crumbs from central government haven’t cut the mustard.
We need major infrastructure overhauls in the regions, not just toilets.
But how do we pay?
We need bold leadership to pay for this infrastructure so that we can give visitors an experience that doesn’t unduly burden ratepayers in small communities.
I am on the same page as Jim Boult regarding visitor levies and bed taxes, but I would instead argue for a nationally-implemented solution, not a local one.
A national bed tax could be surprisingly simple.
$2 per person, per night is all that would be needed at a national level to generate an income stream of approximately $100m per year. Enough money to service the debt on a $1-2bn regional tourism infrastructure fund.
Such a national bed tax should be levied on commercial accommodation, peer-to-peer private accommodation platforms, and self-contained motorhome hires.
And importantly it must be levied on both domestic and international travellers, as domestic travellers are in many regions the most dominant visitor type.
The beauty of the nationally-implemented approach would be that a rich dataset regarding where visitors stay, and for how long, would be created.
Crazily we don’t even know where visitors actually stay in New Zealand at present. The only guest nights data we have is a poor-quality survey of commercial operators that isn’t trusted by many in the business.
Money from the national bed tax could then be redistributed back to local authorities in a formulaic way, that was based on the volume of visitors to that area and the relative size of the ratepayer base.
The national bed tax would give Queenstown and Jim Boult their money.
It would also help countless other small communities get access to funding, without the headache of 67 different regional bed taxes or visitor levies.
In the meantime, go Jim for taking a stand.
Hopefully Jim’s bold move finally forces the Tourism Minister’s hand.
Otherwise I have a successor in mind.
Benje Patterson is a Queenstown-based economist, strategist, and storyteller. This article was also published on Stuff.