Supreme Court docket backs Auckland’s controversial resort ‘mattress tax’

Auckland’s controversial resort ‘mattress tax’ has been permitted by the Supreme Court docket following some modifications, overturning a earlier discovering by the Court docket of Attraction that deemed it invalid.

The Lodging Supplier Focused Fee (APTR), which was first launched in 2017 by Auckland Council as a way to fund tourism advertising and marketing, has been the topic of a prolonged authorized battle.

Resort Council Aotearoa (HCA) has labelled the choice “disappointing”, saying it can have an effect on members and all the tourism trade.

“The APTR was suspended throughout COVID as a result of it wasn’t working and would have despatched some small operators out of enterprise,” mentioned HCA Strategic Director, James Doolan.  

“Council seems to now settle for that the APTR is a poor method of funding vacation spot advertising and marketing and occasion attraction. 

“The APTR was a focused fee beneath which lodging suppliers paid one-half of the prices to obtain one-tenth of the advantages. It couldn’t be handed on to company as an extra cost at check-out, which meant lodging suppliers have been all affected in numerous methods.”

Doolan mentioned HCA and lots of of its members are working with Auckland Council on a brand new, fairer scheme to safe further funding for Auckland’s occasion attraction and vacation spot advertising and marketing work. 

“The proposed new voluntary scheme not ignores the opposite companies that clearly profit from tourism,” mentioned Doolan. 

“That’s a optimistic improvement and a sign that Auckland Council, beneath its new Mayor and with a refreshed line-up of councillors, is extra forward-thinking about tourism-related points.  A thriving customer economic system and high-quality resort rooms are important for any international-standard metropolis comparable to Auckland.”

Doolan mentioned a extra collaborative effort is required when designing focused charges.

“It serves no-one for councils and industrial ratepayers to be caught up in costly and time-consuming litigation, particularly when the litigation is a couple of coverage that has subsequently been dropped,” he mentioned.

“Any new funding regime ought to draw upon worldwide best-practice, versus being hurriedly designed to fulfill short-term aims.”

Earlier than the pandemic, New Zealand’s tourism trade generated NZD$3.8 billion in GST income yearly plus an estimated NZD$3.1 billion in tourism-related taxes.

Doolan says the tourism and hospitality trade is just not seeing the complete advantage of central authorities’s assortment of GST on spending by worldwide vacationers.

“Central authorities’s tax take from tourism is just not totally reinvested within the sector, neither is it adequately shared with native authorities to help funding in important infrastructure,” he mentioned. 

“Because of this, New Zealanders get annoyed with overcrowding and native authorities have turned to novel fundraising strategies, such because the APTR, to fill the funding hole.

“If New Zealand goes to repair our commerce deficit downside, we’d like a lot better technique and coverage for tourism. 

“The APTR is a relic from the unhealthy previous days of policymaking.  Let’s hope we by no means see something prefer it once more.”