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Hospitality NZ Response to Productivity Commission Report

12 DECEMBER 2019

“Visitors are already paying their fair share, contributing $1.7 billion annually in the form of GST. Tourists already pay for the costs they create that support the tourism and hospitality industry.” said Hospitality New Zealand Chief Executive, Julie White.

Following the release on Thursday 12 December 2019 by the Productivity Commission of the “Local Government Funding and Financing” Final Report, Hospitality New Zealand are particularly pleased with the Commission’s recommendation that Central Government funding for tourism should be distributed more efficiently and fairly to councils.

Hospitality New Zealand (Hospitality NZ) supports the Productivity Commission’s final report recommendations laid out in Chapter 10: Responding to Tourism Pressure (page 257); the Commission acknowledges that there is no massive funding shortfall when it comes to addressing the visitor sector’s impact as international visitors are already contributing and paying for most of the costs they create.

The Commission took on board Hospitality NZ’s recommendations against an accommodation levy / bed tax. The report’s findings concluded against councils introducing an accommodation levy suggesting that it would have significant challenges, including unlikely raise enough revenue in some areas and incurring significant implementation costs.

Hospitality NZ have and continues to argue that a narrow-based tax, which is applied solely to the commercial accommodation sector unfairly places the burden and risk on to one sector and is not a sustainable solution.

Hospitality NZ’s original submission in August 2019 stated, “The figures from Statistics NZ quoted in the Draft Report suggest that accommodation services are receiving on average less than ten per cent (10%) of total visitor spend (7.7%), far below the significant share of over 30 per cent (30%) received by retail services.

White added: “Hospitality NZ strongly agrees with the Commission’s recommendation that more councils should explore the option to require peer-to-peer accommodation providers to pay business rates, or some proportion of them. The Report also recommends the introduction of a national register of providers, which is something that Hospitality NZ has long recommended.

Central Government has a duty to regulate the peer-to-peer accommodation providers as we have a duty of care for all visitors and these properties should be treated on a level playing field.”

CEO Hospitality NZ Julie White said, “We’re pleased the findings of the Report suggest common-sense applies when considering how the acknowledged short-fall of local government funding for some Councils in managing peak season and provision of infrastructure services for visitors (and residents) can be funded. An accommodation levy is not the answer for all Councils. We’re encouraged that other tools or mechanisms to assist Councils with providing a quality (and safe) provision of services for visitors and customers have been suggested in the Report.”

“We would like to acknowledge the work and commitment of the inquiry team for the work they have undertaken into local government funding and finance and their willingness to engage with industry, taking on board Hospitality NZ recommendations and for their detailed and considered approach.” Julie White said.


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