Rex Gardner: Proceed with caution on talk of taxes

Over the years, Tasmania has begged to be noticed as a tourist destination. The state has worked hard and smart to grow visitor numbers. Slowly but surely the numbers grew and, in recent years, have taken off.

Rex Gardner says Tasmania needs to be cautious when debating tourist taxes. Picture: iStock

OVER the years, Tasmania has begged to be noticed as a tourist destination.

The state has worked hard and smart to grow visitor numbers, including multiple missions interstate and overseas to attract tourists to our shores.

We are now reaping the benefits.

Our industry leaders and politicians have knocked on doors around the world.

Top chefs, international travel agents, travel journalists – anyone with a voice and influence – have been hosted here on taxpayers’ money as part of years of clever niche marketing.

Slowly but surely the numbers grew and, in recent years, have taken off.

Now, with 4 per cent annual visitor growth and a measure of success under our belt, some people are accused of trying to kill the goose that laid the golden egg.

Hobart’s new Lord Mayor, Anna Reynolds, has floated the idea of a tourist tax, saying a levy could be imposed on visitors to Hobart.

Greens leader Cassy O’Connor has called for a 10 per cent bed tax on international visitors.

The State Government, the Opposition and tourism industry have slammed the proposals.

Tasmanian Tourism Industry Council chief Luke Martin has called the bed tax idea “a shocker” and a “hare-brained thought bubble”.

Hobart Lord Mayor Anna Reynolds has floated the idea of a tourist tax, saying a levy could be imposed on visitors to Hobart. Picture: MATHEW FARRELL

As a globally popular tourist destination, Tasmania is unusual in not having tourist taxes. And that’s just the way many in the industry want it to stay.

Tourist taxes are nothing new and exist around the world. Bed taxes are the most common. They’re the norm in Europe, ranging from 5 per cent a room in Germany and Netherlands, 3 per cent in Austria to lesser charges in euros per person, per night in dozens of other cities.

Other tourist taxes come in the form of departure taxes, entry taxes, city taxes, resort fees, environment taxes and culture taxes.

Closer to home, Fiji takes two bites at many tourists. Visitors staying at resorts and hotels pay a 6 per cent service turnover tax and, in some lavish resorts, there’s an environment and climate adaptation levy of 10 per cent. Both are collected by service providers.

Bali has a 10 per cent development tax charged for hotels and restaurants.

Indonesia, Thailand and Singapore all have tourist taxes.

New Zealand plans to introduce a NZ$35 tourist tax per person from mid-2019, potentially raising about NZ$80 million a year to support infrastructure.

In the US, resort fees earn hotels millions of dollars a year.

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Tasmanian Tourism Industry Council chief Luke Martin has called the bed tax idea “a shocker” and a “hare-brained thought bubble”. Picture: RICHARD JUPE

Back in the late 1970s Tasmania attracted about 350,000 visitors. It crawled up to 450,000 by 2000, and since then has grown steadily at an average rate of 4 per cent and is now up to 1.3 million.

Mr Martin argues Tasmania is tracking at just 3 per cent currently.

“If international wasn’t growing, we’d actually be underperforming, which is why this current complacency and ‘tourism boom’ talk is such rubbish,” he said.

“Tourist operators around the state – in Strahan, St Helens and Launceston – think the Hobart debate is nuts.”

While there’s no evidence tourist taxes around the world deter tourists, they tend to leave a bad taste if seen to be excessive and a blatant grab at the tourist wallet.

Some people argue local councils could levy tourist operators – the beneficiaries of tourist trade - through increased rates to cover infrastructure and running costs.

The operators then increase their charges to cover the levy.

On the other hand, maybe Tasmania has a new marketing edge.

We could stay free of tourist taxes altogether – and market ourselves as the destination free of any impost on our welcome guests.

Rex Gardner is a former chief executive of the Mercury.