Tourism sector reacts to Environment Commissioner's call for new travel tax

Newstalk ZB / NZ Herald,
Publish Date
Fri, 19 Feb 2021, 9:49AM
(Photo / NZ Herald)
(Photo / NZ Herald)

Tourism sector reacts to Environment Commissioner's call for new travel tax

Newstalk ZB / NZ Herald,
Publish Date
Fri, 19 Feb 2021, 9:49AM

People flying from New Zealand should be required to pay a new departure tax to help fund climate-change efforts, the Environment Commissioner says.

InĀ a just-released report, Simon Upton has recommended three other bold steps to ease tourism's pressure on the environment, including tightening rules around freedom camping.

Tourism Minister Stuart Nash says it's too early to respond in detail to the suggested measures.

But he added the $41b-a-year industry - the country's largest export sector until 2020 - would not be returning to a pre-pandemic "business as usual" state.

A major industry group has also welcomed many of the ideas - but questioned whether it was the right time to hit travellers with another tax, given it would already be a challenge to re-establish global tourism connections.

Still, Upton has argued the pandemic's pause could be used to tackle some long-standing social and environmental issues facing the sector.

"There is broad support for the idea that protecting tourism livelihoods in the short term should not morph into a slow but inexorable return to the status quo in the long term."

He said the mooted departure tax would reflect the environmental cost of flying internationally from New Zealand.

The revenue, he proposed, could support the development of low emissions aviation technologies, and provide a source of climate finance for Pacific Island nations.

While the report didn't recommend any set fees, it did explore some hypothetical charges for travellers, depending on how far they were flying.

For people flying to the UK or the east coast of Australia, one lower-bound estimate based on a tax rate of NZ$35 per tonne of carbon dioxide suggested charges as low as $60 and $6 respectively.

Under upper-bound estimates - equivalent to the UK's Air Passenger Duty, but with distances reconfigured for New Zealand's key visitor markets - the charge for short-haul flights to Australia and the Pacific could be $25 for economy and $50 for other classes.

Trips to medium-haul destinations like South-East Asia could see economy passengers charged $90 and premium passengers $195 - while, correspondingly, long-haul trips would come with fees of $155 and $340.

His report found that, by applying a range of rates to passenger movements for New Zealand's 10 tourist markets in 2019, a departure tax could generate between $100m and $400m annually.

Upton argued that any departure tax would be a small percentage of the cost of most trips - and would apply to Kiwis so as not to discriminate against foreign tourists.

While the fees might discourage some people from coming here, he said, research supporting the report had indicated New Zealand was a "must-visit destination" for many people, with demand not being overly sensitive to an increase in airfares.

Upton argued that a climate-related tax could even enhance New Zealand's reputation if it was seen as more sustainable than competing destinations.

Elsewhere in the report, Upton proposed that any future Government funding for tourism infrastructure should be conditional on a set of environmental criteria - and also be aligned with mana whenua and what local communities wanted.

The report found that in places like Akaroa, some locals benefited from tourism - but others had little say and feel imposed on - something backed up by a national survey suggesting 42 per cent of Kiwis thought tourism put too much pressure on New Zealand.

The analysis also noted how, in 2019, the Government spent upwards of $200m supporting tourism - but less than $50m mitigating the environmental pressures that result from it.

Upton also thought it critical to clarify and strengthen the tools the Department of Conservation could use to address the loss of wilderness and natural quiet at the country's most spectacular attractions.

That included tightening up rules around commercial activity on conservation lands and waters, such as limiting noise and visual pollution from helicopter flights, or restricting activities to certain times or days.

For visitor access to a small number of tourist "choke points", tools to restrict visitor numbers such as first-in first-served limits, reservations or access charges could be explored, he said.

Finally, Upton saw a need to beef up the existing standard for self-contained freedom camping, improve oversight of the certifying process and require rental car agencies to play a bigger role in collecting freedom camping infringement fees and fines.

Such changes would mostly affect tourists who camped in small vans or people-movers, which could prove more difficult to certify.

That would leave those tourists facing a choice between staying at the smaller number of places reserved for non-self-contained vehicles, spending more money on a vehicle that was up to standard, or using paid accommodation and camping grounds.

Upton said all of the proposals were not "100 per cent of the solution, but together, they just might make a difference".

He felt that any transition would require real changes to business models and individual tourist behaviour, and that the sector should be required to pay for the cost of the environmental services it used.

"Tourism's growth has been built on special attention and subsidies for decades - this has been followed by subsidies to cope with the pressures of that growth" he said.

"It is time to consider measures that ask the industry and tourists to meet some of these costs and moderate demand for activities that deliver negative environmental outcomes."

Nash said Upton's report would require "in-depth consideration" by a number of Government agencies, but was a "timely challenge to many assumptions which underpin our tourism industry".

The Government wanted to ensure the full cost of tourism was priced into the visitor experience, and not left to ratepayers and taxpayers to pick up the tab or subsidise tourism activities, he said.

"Another priority while our borders are closed to international visitors is to reposition the industry. Tourism will not return to 'business as usual' as it was in 2019," he said.

"Problems like congestion in national parks, degraded natural attractions, creaking local infrastructure, seasonal peaks and troughs, and abuse of the freedom camping regime led to a poor visitor experience and an unfair burden on small communities."

He said the report sat alongside a raft of other advice received and commissioned as part of the Government's Covid-19 recovery and rebuild.

Tourism Industry Aotearoa (TIA) chief executive Chris Roberts said Upton's recommended solutions wouldn't be universally endorsed - but deserved to be debated.

Roberts said his group had long highlighted the need for improved destination management planning, and had recommended that regions should have separate plans.

"We have also called for an overhaul of the legislation governing the public conservation estate as the framework put in place over 30 years ago is no longer meeting New Zealand's conservation, recreation and tourism needs."

Further, he said, strengthening self-containment standards for vehicles also aligned with the TIA's position.

But he added the departure tax was likely to be the most controversial of the proposals.

"It is one way of addressing the known carbon challenge that comes with global movement," he said.

"However, we already have a heavily taxed border and it is going to be a major challenge to re-establish Aotearoa's global connections post-Covid."

The report noted that, over April, May and June last year, weekly international arrivals numbered in the hundreds - compared with between 40,000 and 80,000 the same time in 2019.

"Many will question whether now is the right time to be imposing a further financial barrier to travel," Roberts said.

text by Jamie Morton, NZ Herald