Business Ministry officials warned the Tourism Minister off a distance-based passenger tax. David Williams reports
Details have emerged as to why the Government has, for now at least, rejected an idea to tackle greenhouse gas emissions from international tourism.
But the full picture remains unclear as Tourism Minister Stuart Nash refuses to release all his briefing documents.
In February, Parliamentary Commissioner for the Environment Simon Upton released a report suggesting, among other things, the introduction of a distance-based passenger tax. Depending on the rate, the tax would add as little as $6 to the cheapest seats to Australia, or up to $340 for premium travel to long-haul routes, such as the United Kingdom.
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It could have generated between $100 million to $400 million a year, money best used, Upton said, in three ways – research into lower emission aviation fuels, climate finance in developing countries, like those in the Pacific, and offsets.
On the day the report was released, Tourism Minister Stuart Nash told 1 News: “You’ve got the international visitor levy which tourists pay as they come into the country, so I’m not a fan of a departure tax.”
In the same item, Chris Roberts, chief executive of Tourism Industry Aotearoa, said the country needs to tackle carbon and climate change but “there’ll be a range of views on whether another tax at the border is the right way to do it”.
A month ago, Newsroom asked Nash’s office for briefings specifically on the departure tax. On Tuesday, he released two paragraphs from one Business Ministry (MBIE) briefing, dated February 17, and refused to release two other briefings. (Climate Change Minister James Shaw and Finance Minister Grant Robertson confirm they weren’t specifically briefed on Upton’s report.)
The MBIE briefing, sent the day before Upton’s report was made public, said such a departure tax might be difficult to apply given how many international visitors transit through Australia. “Therefore a majority of this tax would be single tier and fail to fully account for the distance travelled to international visitor’s [sic] end destinations.
“MBIE also acknowledges that it may be difficult to justify spending this departure tax revenue (which is collected by travellers departing New Zealand) on providing a source of climate finance for Pacific Nations, who may also choose to apply similar levies.”
“If these are the only concerns officials can identify, then they’re trifling.” – Simon Upton
Asked if the departure tax was under active consideration by the Tourism Minister or his Cabinet colleagues, Nash’s press secretary wrote: “I replied to an email from you about the PCE proposal on 4 March, i.e. the Minister of Tourism has publicly stated he is not a fan and that an international visitor levy (on arrivals) was already in place.”
Newsroom readers already know that, as the quote was included in our last story on March 9.
The email added: “The proposed departure tax is not being considered by the Tourism Minister.”
Upton, meanwhile, isn’t impressed with the MBIE briefing.
“If these are the only concerns officials can identify, then they’re trifling,” he says in an emailed statement.
“The first-best solution on aviation emissions would be a fuel tax – but as my report explains, it’s not easy under international law. A departure tax is a clear second-best because it would apply to all travellers, New Zealanders included. I am waiting for someone to propose something better.”
Upton’s report, ‘Not 100% – but four steps closer to sustainable tourism’, addressed the potential for travellers to transit through Australia to avoid paying the full tax, saying the UK’s air passenger duty and Sweden’s aviation tax already account for connecting flights. “New Zealand’s relative isolation and lack of convenient alternative departure hubs may minimise the risk of itinerary fragmentation,” the report said.
The Tourism Minister dismissing a climate tax for international arrivals comes as the Government’s approach to climate hits a pivotal point.
The Climate Change Commission, which released a draft report in January, presented its final advice to Shaw, the Climate Change Minister, on Monday. Details will be released next week and the Government has until the end of the year to respond.
Expectations are that widespread changes are needed – in energy generation and use, in agriculture, and in transport, in particular – if the country is to have any chance of meeting its climate change obligations, in the Paris Agreement and the country’s own Zero Carbon Act.
On TVNZ’s Q+A programme on Sunday, Shaw was asked if it was a mistake not to include international air travel emissions in climate targets, when many other countries were? “Many?” scoffed Shaw. “I think we’re talking about three other countries.”
But he agreed with presenter Jack Tame if this country did act on international aviation emissions it would be seen as a world leader.
He went on: “Contained in the legislation that we passed in the Zero Carbon Act is a requirement for the Commission to report back in 2024 about whether we should integrate international aviation and shipping into our measurement system and our target-setting system [for the 2050 net-zero carbon target].
“If you look at some of the modelling that they’ve done they’ve left themselves a bit of buffer in there in terms of the domestic economy to enable that to occur if it happens in the future, which I think is a wise choice.”
Newsroom asked Shaw’s office if, as Climate Change Minister, he was disappointed a distance-based departure tax wasn’t being picked up, and whether he pushed for its adoption.
The emailed response repeated what he said on Q+A about the Commission’s advice, due in 2024, about including international shipping and aviation emissions.
“If that were to happen, the Government would need to look at a range of policies that build on what is happening in the sector right now. A recent report from the Parliamentary Commissioner for the environment did highlight this issue. Deciding on which of these recommendations to take further is a matter for the Minister of Tourism.”
Bigger fish to fry?
While the last statement is true, it’s arguable it has an element of ‘not rocking the boat’ to it. That’s despite the Greens being willing to take different views from Labour on various issues, including Covid isolation payments, housing, and Uyghur Muslims in China.
Shaw would say the proposed tax isn’t within his purview. But it also seems the hallmark of how little power a minister outside Cabinet, like Shaw, has.
Whereas the Green Party had several ministers in the last Government – a Labour-New Zealand First-Green alliance – a Labour landslide last year means only co-leaders Shaw (Climate Change, Associate Environment Minister) and Marama Davidson (Prevention of Family and Sexual Violence Minister, Associate Housing Minister) remain as ministers, outside Cabinet.
It might also be argued there are bigger fish to fry, politically, than a departure tax. But when a climate emergency has been declared, doesn’t a responsible Government pull every lever it has?
In his February report, Upton said there were compelling and immediate reasons to re-shape tourism during the pandemic-enforced pause. There was clear evidence the industry was harming the environment, the report said, and domesticating some of our more wild places, to the detriment of the country’s clean, green brand.
The three other recommendations in Upton’s report were: to make tourism infrastructure funding from central Government conditional on environmental criteria, and consistent with the community’s vision for tourism development; clarifying and strengthening the Department of Conservation’s tools to protect wildness and natural quiet on conservation land; and clamp down on freedom camping.
But the departure tax stands out as something few countries are doing, and a concrete step to address a very real problem few seem to want to talk about.
In March, Air New Zealand’s chief environmental adviser Sir Jonathon Porritt told Newsroom this country has to differentiate itself in a world of quality destinations. That means, he clarified, “genuinely sustainable not phony, greenwash sustainable”. “It’s time for decisions now about the future of tourism, and New Zealand’s place in the global tourism industry,” Porritt said.
The riskier play, he implies, is adopting the status quo. That seems quite a different message from the one received by the Tourism Minister.