Visitor levy changes but no bed tax, National says

Should the party be returned to power, National will reset how the International Visitor Levy (IVL) is spent. National’s finance spokesperson (and current Finance Minister), Nicola Willis says local councils will receive a direct return from the visitors they host.

“Tourism is New Zealand’s second-largest export earner and a key driver of economic growth, jobs and higher incomes. As visitor numbers recover and continue to grow, the communities hosting those visitors should share more directly in the benefits of tourism success,” she says.

“To achieve this, a re-elected National government will change the way funding from the IVL is distributed, rather than introducing a bed tax that would make it more expensive for New Zealanders to book a holiday in their own country.”

The government’s Tourism Policy Statement identifies a need to consider funding arrangements that help regions manage visitor pressures and support sustainable tourism growth, Willis says. Funding from the IVL will be reset from July 1, 2027 so that:

• $100 million per annum is invested in the Department of Conservation
• $50 million per annum is invested through a Tourism Priorities Fund
• Remaining IVL revenue, starting at $86 million in 2027/28 and rising to $106 million in 2030/31, is distributed directly to councils based on the share of international visitor guest nights they host

Under National’s plan, councils will receive an estimated $385 million over the first four years, increasing from $86 million in 2027/28 to $106 million in 2030/31 as visitor numbers grow, Willis expects.

“Councils will receive funding according to their share of international visitor guest nights. For example, we estimate that in the first year of the policy Auckland Council would be eligible for $19.1 million and Queenstown Lakes would be eligible for $17.1 million, with more funding available over time.

“Under National’s policy, every territorial authority that hosts international visitors will receive a share of IVL funding so they can support responsible growth in tourism in their community.

“Funding would begin flowing to councils from July 1, 2027, around two years earlier than it would with a bed tax. We will also provide certainty to the industry by committing not to increase the International Visitor Levy for at least the next three years,” she adds.

National’s Tourism and Hospitality spokesperson (current Minister of Tourism and Hospitality), Louise Upston says National’s IVL reset will back conservation, support tourism growth, strengthen regional economies and ensure communities welcoming visitors share directly in tourism’s success.

“We know domestic visitors generate nearly twice as many guest nights as international visitors and account for around two-thirds of all guest nights across New Zealand,” she says. “A bed tax would disproportionately impact New Zealanders booking a weekend away, whether that’s for a sports event, a family funeral or to visit friends. This is a clear, practical alternative to that.

“We are giving regions the tools they need to manage tourism pressures – funded by visitors, not by a new tax on New Zealanders,” Upston adds.

“Growing New Zealand’s tourism industry… helps us to keep taxes low, grow the economy and support the regions that make New Zealand such a great place to visit.”