National wants to hand councils a cut of the international visitor levy after ruling out a bed tax, delivering an estimated $385 million to regions over four years for tourism-related spending if the party is re-elected.
Under the election policy, funding from the levy would be "reset" from July 1 next year and split three separate ways according to finance spokesperson Nicola Willis.
The Department of Conservation would receive $100 million consistently, $50 million a year would go to a new "tourism priorities fund", and the remaining revenue left would be paid to councils based on their share of international visitor guest nights.
That residual is forecast at $86 million in 2027/28 and climbs to $106 million by 2030/31.
Local mayors had previously called for a bed night levy which would apply across all accommodation, including visiting Kiwis.
In response to today's announcement, Auckland Mayor Wayne Brown said it was a "step in the right direction" but that it was "not yet a long-term solution".
Councils had wanted money to fund tourism-related infrastructure and events.
The party previously committed to exploring its feasibility. (Source: 1News)
National's tourism and hospitality spokesperson Louise Upston suggested that the new source of funding would be paid for by "visitors" instead of New Zealanders.
"We know domestic visitors generate nearly twice as many guest nights as international visitors and account for around two-thirds of all guest nights," she said.
"A bed tax would disproportionately impact New Zealanders booking a weekend away, whether that's for a sports event, a family funeral or to visit friends.
John Glover branded the reversal "a complete U-turn" and said the decision was "collateral damage from policy being made in panic". (Source: Breakfast)
"This is a clear, practical alternative to that. National has been clear that we will introduce no new taxes. We are giving regions the tools they need to manage tourism pressures - funded by visitors, not by a new tax on New Zealanders."
The policy would cost the Crown $105.1 million over four years, according to National. Cost climbs from $15.4m in the first year to $38.9m by the fourth.
The cost comes from fixing the levy's contribution to Crown baselines at $100 million a year, all of it going to the Department of Conservation (DOC).
Party leader Christopher Luxon axed both ideas as a part of a ‘no new taxes’ election pledge. (Source: 1News)
At present, the levy offsets Crown appropriations to both DOC and Tourism NZ, and the funding flowing to conservation rises and falls with visitor numbers.
Central government's discretionary tourism spending would also be trimmed, where at present, $90 million a year is available for that spending.
National would replace it with a "sharper central government fund" consisting of a $50 million "tourism priorities fund", targeting international marketing, visitor infrastructure in fast-growing regions, event attraction, and tourism data and workforce needs.
Auckland and Queenstown biggest initial beneficiaries
Willis pointed to the biggest beneficiaries in year one.
"We estimate that in the first year of the policy Auckland Council would be eligible for $19.1 million and Queenstown Lakes would be eligible for $17.1 million, with more funding available over time," she said.
"Under National’s policy, every territorial authority that hosts international visitors will receive a share of international visitor levy funding, so they can support responsible growth in tourism in their community.
"Funding would begin flowing to councils from July 1, 2027, around two years earlier than it would with a bed tax. We will also provide certainty to the industry by committing not to increase the international visitor levy for at least the next three years."
Auckland would receive a forecast $85.7 million over the four years or 22% of overall funding available, followed by Queenstown-Lakes on 19.9%, or $76.7 million. Christchurch City would take $36.9 million and Rotorua District $20 million across the same period.
Wellington City would receive $15.5 million over four years, Southland District $13.4 million and Westland District $12 million, while Mackenzie District, Taupō District and the Far North District would each get between $6.8 million and $11.3 million.
The figures are estimates which will depend year to year on the levies collected.
Better but not enough - Auckland's mayor
Auckland Mayor Wayne Brown, one of the more prominent promoters of a bed night levy, reacted to the announcement this afternoon.
“National border levies are already at $100, but for some reason Australians are free, and they send us their 501s," he said in a statement.
“A modest 2.5% bed-night levy would raise revenue locally from all visitors staying in commercial accommodation in Auckland and regionally without creating new barriers at the border."
Brown said the announcement today was "a step in the right direction, but we are still around $8 million short, and it’s not yet a long-term solution.
“The proposed $19.1 million reallocation from the international visitor levy is a welcome start, but it falls well short of the $27 million Auckland needs each year for major events and destination marketing. But this shows they’re listening.
The first-of-a-kind agreement in New Zealand sets out a plan for greater cooperation over coming decades. (Source: 1News)
“This will still leave the future of some events like the ASB Classic, All Blacks tests, State of Origin, SailGP and the Writer’s Festival at risk.
“A bed-night levy and international visitor levy aren’t taxes. The bed-night levy is a fair user charge that would mean visitors, rather than Auckland ratepayers, contribute a few dollars towards tourism-related infrastructure and services while they’re here."
'It’s not complicated' - Peters
Meanwhile, coalition partner and NZ First leader Winston Peters said the National proposal was not "ring-fencing" the visitor levy - it was reallocating the operating allowance "to ensure they can continue to use a convenient campaign slogan".
"Queenstown, Auckland, and other regions are screaming out for a bed levy for tourists so they can build the infrastructure to cope with the tourism their local economies desperately need," he said in a tweet.
"NZ First supports the city deals the government made with Queenstown and Auckland and their call for a bed levy - we would ensure it does not apply to Kiwis.
"It’s not complicated - Te Papa already has a charge at the door which New Zealanders do not need to pay - it’s just commonsense."
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