Tim Cossar

Any increase in GST could impact on the New Zealand tourism industry’s international competitiveness relative to other visitor destinations, Tourism Industry Association (TIA) Chief Executive Tim Cossar says.

“We are delighted that in his statement to Parliament today, Prime Minister John Key acknowledged tourism as one of New Zealand’s key export industries.  He highlighted its importance in benefiting other export sectors and noted the long-term importance of hosting a successful Rugby World Cup next year,” Mr Cossar says.

“So any increase in GST will need careful consideration to ensure it doesn’t put at risk the $25 million New Zealand earns from international tourism every day, especially following the Government’s $20 million boost to funding for international marketing.”

TIA will highlight its concerns about the potential impacts of a GST increase to the Prime Minister, who is also Minister of Tourism.  In particular, the timing of the increase will need attention, as tourism operators working in the international marketplace set their prices up to two years in advance, so will need time to adjust their rates if GST is increased.

“New Zealand-based inbound tour operators, who compete with inbound tour operators based overseas, will be particularly hard hit.  Overseas inbounders do not pay GST so an increase will worsen the relative position of the New Zealand businesses.”

This could also be a good time for the Government to consider introducing a GST refund scheme for international visitors, to help protect their contribution to the economy, Mr Cossar says.  International visitors currently contribute about $633 million in GST payments a year.  Increasing GST to 15% will increase their contribution by about $14 million annually.

Mining on conservation land

TIA will also closely watch moves to allow more mining on conservation land, Mr Cossar says.
 
“While we are reassured by Mr Key’s comments today that any new mines will have to meet strict environmental tests, we will also want assurance that they will not detract from the visitor experience,” Mr Cossar says.

“Landscapes and wilderness areas are the prime reason for visitors to come to New Zealand, and the tourism industry wants to ensure our special areas can continue to be enjoyed by future generations of New Zealanders and future visitors.”