English Wrong To Rule Out Giving GST To Tourists

Bill English Wrong To Rule Out Giving GST Back To Tourists

The head of Auckland's leading retail district says he agrees with the CEO of the Queenstown Chamber of Commerce Ann Lockhart who today said it was disappointing that Finance Minister Bill English does not support a scheme where tourists could take their receipts to the airport and claim their GST back.

"Queenstown business and tourism leaders are very disappointed that during a speech Mr English gave to them today he completely ruled out the prospect of a much user-friendly GST refund scheme. Mr English says he's not in the business of giving revenue away, but that's not what this is all about. This is about incentivising spending, lifting visitor expenditure, and boosting GDP. The many overseas countries that have adopted GST refund schemes have never looked back," says Cameron Brewer, chief executive of the Newmarket Business Association.

"Bill English argues that not having a such a scheme won't stop tourists coming here. That is true. However it's not about attracting tourists to New Zealand, it's actually about making shopping more attractive when they get here. A simple GST refund scheme, akin to what Australia has, basically puts everything on sale in the eyes of the tourist. It's a great marketing tool for retailers the length of the country, and there's no compliance costs for business. Mr English says he doesn't want to complicate New Zealand's 'clean' GST system, but this won't."

"Tourist refund schemes successfully operate in more than 20 countries worldwide. In 2000 when the Australian Government introduced a 10 percent tax on goods and services and subsequently their refund scheme, the yield from annual tourism spending jumped 8.75 per cent. Tourists visiting New Zealand must think it is strange that neighbouring Australia has such a well-promoted and consumer-friendly scheme yet New Zealand's arrangements are neither.

"It's going to cost the country very little in refunds, because overseas experience shows only a very small percentage actually end up redeeming their receipts. However proponents for a better scheme argue that even if just five percent of tourists used the scheme, it would add $30 million to retail spending by tourists visiting New Zealand each year. It would promote tourism spend because suddenly every piece of New Zealand jewellery, sizeable artwork, or designer fashion garment is effectively discounted for tourists.

"Bill English may not personally support a great tourist refund scheme but we understand the Minister of Tourism, Prime Minister John Key, is keen to review this growing issue. There are two reasons why the Government should review the issue and soon: GST is going up to 15% in October and over 60,000 visitors are coming for the Rugby World Cup," says Cameron Brewer.

Ends