ACT vs National: Who should pay for tourism wear and tear?
The ACT Party wants to give councils $1 for every night a visitor stays in their area. The money would come from taxes the government already collects, not from a new charge on hotel or motel bills.
ACT leader David Seymour said his party would campaign on this idea, called a "local tourism dividend," as an alternative to a bed tax. A bed tax would add a small extra charge to short-term stays at hotels, motels, and B&Bs. Seymour said the dividend was the better approach. RNZ
The two parties in government do not agree. National leader Christopher Luxon told RNZ his party might introduce a bed tax if re-elected. Seymour said he was against that.
Seymour said the dividend would give councils more than $40 million a year, based on visitor numbers expected in 2026. He said it could start by 1 July next year. A bed tax would take longer because Parliament would need to pass a new law for it.
The difference is simple. National wants a new charge on visitors. ACT wants to share out money the government already has. But that money has to come from somewhere — and Seymour did not say what else would lose funding to make room for it. He said ACT would release its full budget plan later in the campaign.
Two big questions remain. First, if $40 million is shifted to councils, something else in the government budget has to be cut, and we do not yet know what. Second, the $1-per-visitor-night idea means councils with lots of tourists get more money. That benefits places like the South Island and parts of the Central North Island. Councils with fewer visitors get less. And the plan does not directly address the strain tourists put on local roads, water, and rubbish systems.
Seymour's claim that the dividend could start sooner than a bed tax makes sense in theory, because redirecting existing money is simpler than creating a new tax by law. But there are still practical steps to sort out — agreeing where the money comes from, how it is shared, and getting approval from Cabinet and Treasury.
For the tourism industry, the two options work differently. A bed tax is paid by visitors, which seems fair as a user-pays approach, but it makes bookings more expensive and could put some people off travelling. The dividend leaves visitors alone but means the government gives up money it currently keeps.
What this means is that the two governing parties now have different, public positions on how to fund the cost tourism places on local communities. Seymour has promised a full budget plan with the details later. But the split between ACT and National on this issue is already clear.
