25 Nov 2008

British departure tax rise to hit NZ-bound travellers

7:23 pm on 25 November 2008

Passengers flying to New Zealand from Britain are set to face a big rise in departure taxes.

Tourism operators say the tax is unfair and will threaten New Zealand's tourist trade.

Under the proposed British tax, which would be phased in over the next two years, those taking long haul flights would be expected to pay more than $NZ200 per passenger by 2010.

The Air Passenger Duty would become a four-tier system based on distance travelled, with those flying to New Zealand, Australia and South Africa hardest hit.

In the year to October, 288,823 visitors arrived in New Zealand from the United Kingdom.

Travel Agents Association chief executive Paul Yeo described the change as a tax grab dressed up as an environmental charge.

Mr Yeo said in a recession, tourism is one of the greatest boosts to the economy, responsible for one in 10 jobs. He said it is a similar picture in Britain, and expects the tourism industry there will also suffer as a result of the tax.

Tourism Industry Association of New Zealand head Tim Cossar questioned whether the tax will actually be used to reduce carbon emissions.

"If you could clearly see that the money was being put into environmental initiatives and that the British government were collecting it for those reasons, I think a lot of people would be more understanding of the situation," he said.

"But it seems to just go into a general consolidated fund and seems to disappear."

Industry already struggling - Air NZ

Air New Zealand would not be interviewed by Radio New Zealand on Tuesday.

However, in a written statement, it said any additional taxes on travellers will further impact on aviaton and tourism at a time when these industries are already struggling with increased costs and falling demand.

Richard Howard, from the New Zealand Association of Migration and Investment, says he doubts the tax will be enough to deter permanent migrants.

However, he agrees it could have an impact for those on their OE, saying this group will either have to pay the tax or find a way around it, perhaps by leaving from an airport outside the United Kingdom.

Representatives from the tourism industry say they will be taking the matter up with the New Zealand Government to see what can be done.