23 Oct 2015

Queenstown joins call for special economic zones

5:46 pm on 23 October 2015

A proposal to create new special economic zones has been welcomed by the Queenstown Lakes District Council, and its chief executive wants Queenstown to be the first of them.

Queenstown at sunset

Queenstown Photo: 123RF

The zones have been proposed by the New Zealand Initiative, which is a policy group funded by some of New Zealand's largest businesses. Each zone would have its own tax rules and the freedom to vary important legislation such as the Resource Management Act.

So far, New Zealand is one of the few countries in the world not to have adopted special economic zones. They are used by over 130 different nations to assist regions which need special help to achieve growth or meet specific challenges.

Queenstown has argued for many years that it needs central government help to build infrastructure and housing in order to handle a dramatic growth in tourism. Over 2 million tourists visit each year but there are only 15,000 ratepayers to fund the cost of infrastructure.

Queenstown Lakes District Council chief executive Adam Feeley.

Queenstown Lakes District Council CEO Adam Feeley Photo: TVNZ

"We have 200 times more visitors that other towns in New Zealand," Queenstown Lakes District Council CEO Adam Feeley said. "Even compared to towns like Taupo or Rotorua, we are off the scale."

A special economic zone could be used to help with infrastructure costs - and even eventually allow the council to receive a share of GST income derived from tourism or housing construction.

Such a tax-sharing arrangement would allow the council to plough money back into the community's growth rather than seeing it go to central government.

But Mr Feeley said that it was important to make progress in small steps. "I'm not a tax expert and it seems safer to start with support for tourism first and then look at other issues."

New Zealand Initiative CEO Oliver Hartwich said New Zealand was falling behind the rest of the world by not introducing special economic zones, and he believed the zones should become part of the current policy debate.

The zones could also be used to help so-called zombie towns in the North Island with stagnation and falling population numbers.

Get the RNZ app

for ad-free news and current affairs