Queenstown will be watching closely as New Zealand’s only regional tourist tax is reviewed – with initial indications that the Stewart Island/Rakiura visitor levy is set for a big hike. David Williams reports.

The day Stewart Island’s visitor levy came into force was hailed as a momentous occasion.

New Zealand’s only regional tourist tax – despite Queenstown’s so-far fruitless bid to convince the Government it needs one – was officially launched on December 9, 2013. It’s relatively easy to collect the $5 levy from tourists to the island, 30km south-west of Bluff, as there are only two ways to get there – by sea or air.

For freedom travellers, there’s a collection box outside the Rakiura Museum – into which, in December 2013, Southland Mayor Frana Cardno stuffed $5 before joining a celebratory breakfast at Oban’s South Sea Hotel.

Bruce Ford, Stewart Island’s representative on the Southland District Council, told the Otago Daily Times back then he’d suggested the idea of a levy in 1978, while chairman of the Stewart Island County Council. There was unanimous support. But it only gained momentum when Invercargill MP Eric Roy sponsored a private member’s bill, which became law in 2012.

“No one will even spot it if is built into their fares.” – Bruce Ford

Ford predicted the island’s 400-odd residents would welcome the levy as a source of funding to upgrade walking tracks, footpaths and jetties. As for tourists? “No one will even spot it if is built into their fares.”

And so it came to pass. Five years on, as the levy is reviewed for the first time, tourism is surging, as is the amount raised.

Figures from the Southland District Council show the levy has raised $758,000 since October 2014, including a record $193,000 in the last financial year. Grants have totalled $711,000, including $72,500 for a museum development, $160,000 for the Ulva Island jetty and wharf, and more than $150,000 for upgrading and maintaining tracks and footpaths.

But it seems that it’s not enough. Against the advice of council staff, and “strong feedback” from island residents, the council’s community and policy committee yesterday decided to recommend hiking the levy to $15. It also wants to disband a local subcommittee that decides how the money should be allocated. Any draft changes will go out for public submissions.

Playing catch-up

The problem on Stewart Island is acute. Tourists come to the rugged island for fishing and its natural beauty. The star of the show is Rakiura National Park, which covers 85 percent of the island.

Last year, the island attracted about 44,400 tourists (an increase of 21 percent on the year before), or 111 tourists per person. Compare that to the Queenstown-Lakes district, which is pushing Government to allow it to implement a levy, where its roughly 34,700 residents support about three milllion tourists a year – or 86.5 tourists per person.

Stewart Island Community Board member Aaron Conner, who answers to the nickname Squirt, says the levy’s helping “but we’re playing catch-up for about 30 or 40 years” of neglect. (What the island really needs, he says, is more accommodation and more places to eat – two things, sadly, a levy won’t provide. “In the peak of the summer, the poor old pub’s struggling because there’s very little open.”)

Ford says the island has a tremendous amount of infrastructure that requires attention, like wharves and tracks and footpaths. “There are a lot of projects that have to be funded, that you can’t afford to pay for with rates.”

His fellow councillor Julie Keast, who chairs the community and policy committee, adds that Millars Beach wharf is closed because it needs urgent repairs, while Ulva Island’s wharf also needs urgent repairs. “This is the time to actually put a figure out there and see what people come back with, how we can fund it, really.”

“The numbers started to rattle. And I could see everybody’s calculators going round in their heads.” – Bruce Ford

That figure, floated at yesterday’s meeting, was $15 per tourist – triple the current levy. Newsroom asked how that figure was arrived at, considering the staff recommendation was to leave it at $5.

“It’s about the infrastructure that is required over there, really,” Keast says. She confirms no one from Stewart Island lobbied the committee for the proposed change, although Ford was present, and no tally of the necessary works, with an estimated cost, was presented. (Ford: “That’s got to be quantified and that’ll come out with the document for consultation.”)

Does that mean it was mainly a discussion, at the council’s Invercargill headquarters, between councillors who don’t live on the island? Keast: “Um. It. Um. It’s an ongoing, evolving picture of just what is needed.”

Ford says the island’s urgent infrastructure needs have been tossed at council – “It’s your infrastructure, you fix it.” That prompted strong discussion at yesterday’s meeting about how to pay for it.

“I sat back a tad,” he says. “The numbers started to rattle. And I could see everybody’s calculators going round in their heads. And someone put a figure on it.”

Arriving at the proposed $15 levy figure – exceptions include people under 18 and those staying for 21 days or more – is to “test the ground” with the public, Ford says.

Keast adds: “You don’t want to price yourself off the market. But we actually have to cover the infrastructure that is needed to support the number of visitors that are coming. It’s a catch-22 really, finding that balance.”

However, community board member Conner doesn’t know what to make of the recommended change. “We’ve seen no paperwork on it – it all sounds a bit odd to me.”

Public will be consulted

Other potential changes recommended by the committee yesterday include scrapping a levy-related funding allocation subcommittee, leaving decisions with the committee itself. Representatives of iwi and the so-called approved operators, the commercial tourism firms that collect the levy for the council, could be added to the committee for the funding decisions, with voting rights.

Ford, who sits on the subcommittee, wanted his vote recorded against that recommendation yesterday. “We don’t need 12 councillors doing that job, it’s going quite nicely with five.”

It was also recommended to open funding applications related to wages and salaries for tourism jobs. However, councillors voted against a staff idea that a levy reserve be built up to pay for multi-year projects.

Draft changes to the levy and bylaw are likely to be discussed at the district council’s September 19 meeting, after which the public will be consulted. It’ll be interesting to see what changes are made to the recommendations, considering all councillors – the same people voting on September 19 – are members of the community and policy committee.

Lessons for Queenstown

Keast, who represents Southland’s Waihopai Toetoes ward, sees parallels between Stewart Island and Queenstown’s bid for a visitor levy.

“In both cases, really, the key element of it is the environment that people love to come and see. We have to make sure that what we are providing actually doesn’t deteriorate the visitor experience or the environment after they’re gone.”

Ford says the biggest lesson for Queenstown is that its tourist tax needs to be uniform. “We’re collecting this off every eligible visitor. And if you go to Queenstown, well, how do you nail them down? There are always a few who won’t declare what they’re doin’.”

Levy-dodgers don’t appear to be of huge concern on Stewart Island. Ninety percent of the levies are collected from “approved operators” – Stewart Island Flights, Stewart Island Experience and ISS Mckay. Anyone caught not paying the levy can be slapped with a $250 fine, but the council says not a single fine has been issued.

Are Stewart Islanders just too nice?

Ford laughs from his perch at the South Sea Hotel. “Yeah, we are,” he quips. “You could come and have a look.”

David Williams is Newsroom's environment editor, South Island correspondent and investigative writer.

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