ACT supporting local tourism, not new taxes

ACT is announcing a Local Tourism Dividend to support visitor communities without introducing a new bed tax.

“Councils will receive $1 for every guest night in their area, funded from the GST and visitor levies tourists already pay,” says ACT Leader David Seymour.

“If revenues allow and councils use funds wisely, the $1 rate may rise over time. This policy fixes a real problem without adding another charge to the hotel bill or expanding government,” says Mr Seymour.

“Households and businesses live within their means. Government should too. New taxes start small and tend to grow - this policy avoids that trap and keeps prices competitive for visitors.

“New Zealand is a top tourist destination but that success causes strains on local infrastructure. Ratepayers are too often left to pick up the bill. ACT’s Local Tourism Dividend gives councils the funding to keep pace, easing pressure on wastewater, public toilets, rubbish collection, freedom-camping facilities, and other services.

“This is a much smarter alternative to a bed tax for at least five reasons:

• No compliance burden: accommodation providers do not have to calculate, collect, file and pay a new tax.

• There is no tax administration, just an annual transfer to councils based on verified bed nights (already known) multiplied by one dollar, and IRD will not need to employ people to collect a new tax.

• Due to its simplicity, it can be implemented as soon as the next budget and start as early as July 1 next year. A new tax would take at least a year longer because it requires legislation.

• It will not raise the cost of staying in New Zealand, discouraging people from visiting the country, or reduce the revenue of accommodation providers.

• It makes use of the existing $185 billion revenue of the New Zealand Government and Councils, rather than increasing the overall size of Government in New Zealand with a new tax.

“This policy also builds on ACT’s GST-sharing model implemented this term that rewards growth and now applies to tourism.

“The Local Tourism Dividend gives visitors a fairer deal without a new tax. If a council attracts more visitors, it gets more funding - simple, fair, and fast."

Note to editors: ACT's full Local Tourism Dividend policy is linked here