New travel charge on tourists is borderline at best - NZIER Insight 56

26 November 2015

New Zealand Institute of Economic Research (Inc)
Media release, 26 November 2015

For immediate release

A new charge on tourists to pay for the growing costs of border control is inefficient and it will reduce services exports and dampen economic growth. We can raise revenue more effectively, says a new Insight from the New Zealand Institute of Economic Research (NZIER). The new charge is scheduled for introduction from January 1, 2016.

“Right now tourism is booming, bringing in new export dollars and a chunky boost to GST revenues just when our dairy sector is taking a hit,” said Dr Kirdan Lees, Principal Economist at NZIER.

“A border charge would simply discourage much of the behaviour we want to encourage – tourists to visit and spend money in New Zealand.”

“The cost of GST also makes New Zealand less attractive as a destination. A border charge would only add to these costs making New Zealand less competitive as a destination. Expect 34,000 fewer tourists each year because of the border charge.”

“Rather than punishing the tourism sector just when it is getting going, funding the costs of border control from general taxation would have less impact on economic growth.”

The Insight can be read here.

For further information please contact:

Dr Kirdan Lees, Principal Economist
DDI 04 4947960 mobile 0212647336
kirdan.lees@nzier.org.nz

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