New Zealand wants new departure and arrival taxes

The New Zealand government wants to put a tax on arriving and departing from the country, which may result in the tourism industry taking a $104 million annual hit.

Airlines, airports, the cruise industry and accommodation providers have united in their opposition to the introduction of the $22 charge which was proposed in the May budget, suggesting it could even result in airlines axing flights to some destinations.

Primary Industries Minister Nathan Guy has suggested travellers could be charged $16 for arriving in New Zealand and $6 on departure, from January…

the Coalition Against Travel Tax, which has been established to fight the proposal, said a study commissioned by the Government estimated the levy would reduce the number of international visitors by 1.4 per cent and their spending by 0.9 per cent.

“This equates to a loss of 44,000 visitors a year and spending of $104m,” the lobby group said, adding that analysis by international airlines and cruise companies suggested the impact could be greater than the study forecast… read the full article

This new proposal is particularly ironic because the New Zealand government kicked up a stink about Britain doing something similar in 2008. John Key went over to the UK to have stern words with the British Prime Minister about it, because of the damage it would do to NZ’s tourism industry. At the same time its national carrier was charging Samoa and Tonga for the pleasure of having its services. Back then we wrote…

Two tourism related news stories have been playing out in the NZ press over the last few days.

The first centred around complaints that the country’s national carrier Air New Zealand has been holding small Pacific Island nations to ransom – demanding millions of dollars more in grossly inflated subsidies for the privilege of accepting their services.

The small pacific island nations are heavily dependent on Air NZ flights for both for tourism and trade, which would suffer drastically if flights are withdrawn.

The islands of Samoa and Tonga are facing cuts in services from next week unless they cough-up more to keep Air New Zealand interested.

The Cook Islands has already agreed to the demands and will increase their payment from $2 million to $5 million. Their tourism minister Wilkie Rasmussen said his country had agreed to a new joint venture, to be signed within two weeks and said that the “flights were important to secure access to visitors from North America, the UK and Europe.”

According to the NZ Herald, Samoa’s Deputy Prime Minister Misa Telefoni has said Air New Zealand is holding his country to ransom and he has “approached rival airlines about flying the Los Angeles route through Apia and Tonga.”

The second news story concerns a massive storm of protest from New Zealand over Britain daring to introduce a 4-tier departure tax based on distance travelled (a form of carbon tax) with passengers on long haul flights to countries such as New Zealand hit the hardest.

Fears are that hiking the departure tax from the present equivalent of $113 to $240 will cause a massive drop off in visitors to NZ and have serious consequences for the NZ tourism industry, already hit by a fall in numbers due to the recession.

The irony of the two situations is not lost on some people.

On one hand the NZ government leaps onto its high horse about its tourism industry being threatened by high departure taxes and is worried that other countries will follow suit, whilst on the other its national carrier is squeezing small island nations whose small, tourism based economies are heavily dependent on Air NZ flights.

Before John Key sits down to talk to Gordon Brown he needs first to sort out what’s going on in his own back yard.

Links:
UK Departure Tax overshadows Key’s Meeting with Brown
Cooks Pays Air NZ to Keep Rarotonga Route