Asking tourists to chip in is the only sensible solution

GREG BARNS: More destinations are realising visitor numbers can become a curse.

Should tourists such as those visiting on cruise ships be made to pay a levy? Picture: SAM ROSEWARNE.

RATIONAL economic ideas are sadly sparse these days. Populism and vested interest capture of the bureaucracy and politicians means that smart ideas like a sugar tax and a carbon tax are killed off.

So in that context it is pleasing to see one political candidate proposing a sensible idea — in this case a tourism levy.

Hobart mayoral candidate Anna Reynolds has shown policy sense in proposing this idea as a means of making tourists pay for the upkeep and development of infrastructure. Her rival candidates would be smart to follow her lead.

There is rightly, and the current Mayor of Hobart Ron Christie should take credit for this, a debate about the Hodgman Government’s obsession with the tourism industry.

But if Tasmania is to become a tourist mecca which welcomes cruise ships and planes full of visitors then an equitable means of making sure that the infrastructure tourists use is paid for by them, as well as ratepayers and taxpayers. It is the user pays principle and that is principle which generally makes perfect sense.

Ald Reynolds favours some form of visitor levy which has been a feature of Noosa in Queensland for some years. Byron Bay in NSW is now considering a similar scheme.

Why is it necessary? Because local government is expected to build and maintain infrastructure that tourists use, such as tracks and roads. However their funding base is not equipped to ensure they can do so while maintaining other services. Take, for example kunanyi/Mt Wellington.

As Ald Reynolds notes, “500,000 people are visiting it every year. It is one of the most highly visited sites in the state, and yet it’s only the Hobart City Council that’s putting in the money to build the tracks and the toilets, to plan the visitor centre and shuttle bus.”

Last week on these pages Rosemary Sandford made the point that the much trumpeted new ferry service to Bruny Island will trigger a big increase in numbers of visitors.

“With a projected deluge of over 200,000 visitors a year, the natural values, wildlife, peace, quiet and simplicity for which Bruny Island is renowned are under threat like never before. Sure, there will be jobs for a few and money will be made by some, but at what cost to the natural, social and cultural values that make Bruny unique and underpin its tourism appeal?,” Dr Sandford wrote.

Who will pay for the wear and tear on Bruny Island facilities and infrastructure?

And what about the Botanical Gardens in Hobart? According to the chair of that organisation tourism numbers are up 22 per cent over five years.

Ald Reynolds’ preference is “for something to be collected via accommodation or perhaps car rentals” but she acknowledges that there is further work to be done on the right model.

In New Zealand where the over-emphasis on tourism by government has now led to that industry becoming a curse, the Dominion Post, a newspaper, editorialised on January 3 this year in favour of a tourism tax or levy.

As it rightly noted there are “no good arguments against such a tax. It is a pure form of user-pays: since the avalanche of tourists has caused the strain on our infrastructure, it should be the tourists who fund its repair. What’s more, such a tax would not cause any significant resistance from the consumers themselves.”

Cities and regions across the world which are experiencing big increases in tourism numbers, in part because of Airbnb, are proposing and legislating for levies or taxes on hotel rooms and sharing economy bookings. Bath and Edinburgh in the UK are of the most recent examples of cities in this category.

The University of Toronto’s Richard Florida noted last month that an estimated “22 countries have imposed some form of tourism tax.” He also sees such taxes as helping with the housing crisis for low income people.

Professor Florida points that the historic US town of Alexandria, Virginia, “has raised local taxes on restaurant meals by 1 per cent and is using the additional revenue for affordable housing.”

There is also the fact that as a matter of fairness and equity a tourism levy or tax is justifiable.

Sally Everett of Anglia Ruskin University in the UK has written, “Expecting tourists to pay a little more to protect and maintain the sites they enjoy is morally defensible — whether this be Bruges, Venice, or Thailand. A form of “tourist tax” on food, accommodation and attractions may seem unfair (even discriminatory), but tourism shouldn’t be a one-way transaction.

Foreign visitors often place significant pressure on scarce and limited resources at certain times of the year. We all need to recognise this impact,” Prof Everett notes.

She is right and so is Anna Reynolds for arguing the case for a tourism levy in Hobart.

Hobart barrister Greg Barns has advised state and federal Liberal governments.