3 Nov 2010

McCully confident Britain will reverse travel tax rise

7:31 am on 3 November 2010

New Zealand Foreign Affairs Minister Murray McCully says he is confident the British government will reverse increases in departure taxes.

The British air passenger duty for New Zealand rose by 55% on 1 November. Economy passengers now pay $177 instead of $115; other passengers must stump up $355 instead of $229.

Mr McCully says the new duty was a hangover from the previous Labour government in Britain and New Zealand has been lobbying the new coalition government for months for its removal.

The minister says there's been a favourable response, particularly from Foreign Secretary William Hague, who, Mr McCully says, has made it clear he understands the New Zealand view that it is a punitive tax.

Mr McCully says he believes the matter will be reasonably quickly concluded.

Tourism New Zealand says that visitor numbers from Britain are falling and that the extra duty, together with the weakening pound, could stall a recovery.

The Inbound Tourism Operators Council says the Government is also lobbying Germany, the next country believed to be acting on departure taxes.

Tourism Holdings Ltd, the biggest rental car and camper van operation in New Zealand, says that the number of British tourists has already dropped this year and that the duty increase is bound to put off some travellers.