Higher Travel Levy Will Slow Tourism Recovery

red tour bus

A proposal to increase a levy by more than 200 percent for all air travellers crossing the New Zealand border will be another brake on the tourism industry’s recovery stated Tourism Industry Aotearoa.

The New Zealand Customs Service and the Ministry for Primary Industries are reviewing the border processing levy (BPL), which was introduced in 2016. The levy is used to fund the customs and biosecurity services provided for all arriving and departing passengers, including New Zealanders.

Currently, the BPL is $20.11 (incl. GST) each for air passengers and $21.06 (incl. GST) for cruise passengers.

The consultation document released by Customs and MPI proposes six options, from no change, through to an option which would see the levy jump on 1 December this year to a massive $160.76 (incl. GST) per air passenger and $70.23  (incl. GST) for cruise passengers.

However, TIA Chief Executive Chris Roberts explained that an Official Information Act request has revealed that Cabinet has already agreed in principle to Option 2 – increasing the levy on 1 December to $63.00 (incl. GST) for every air passenger and $35.36 (incl. GST) for each cruise passenger.

That will mean air passengers face a more than 200 percent increase in the levy – from $20 to $63.

“This crucial fact that the Government has already identified an outcome is not revealed anywhere in the consultation material, leaving us to question whether this is genuine consultation," said Roberts.

We are strongly opposed to this option. It is too soon, too impactful on the traveller and will slow down the recovery for thousands of tourism businesses.

The massive disruption of global travel that led to the correct decision to suspend funding reviews in 2020 still applies now. TIA is calling for no change to the BPL before July 2023.

“Due to the unpredictable nature of international travel for the foreseeable future, we are concerned that the visitor projections provided in the consultation document are unreliable and will be subject to considerable change."

With traveller confidence at record lows, adding further disincentives to travel to New Zealand will likely result in a decrease in revenue for Customs and MPI, rather than covering border costs.