Goff’s tax in trouble

The Herald reports:

Goff is pinning his hopes on the targeted rate to replace ratepayer spending by Auckland Tourism, Events and Economic Development (Ateed) to attract visitors and fund major events. It would free up $28 million to fund transport and housing infrastructure and help Goff’s election pledge to hold rates to 2.5 per cent.

If the accommodation providers are forced to fully fund ATEED, they should then get to decide what level of funding it gets. Allow them to appoint a majority of the board and you’d soon get better value for money.

Goff said 75 per cent of the feedback so far on the draft budget supported the targeted rate.

Of course it is. You are proposing a tiny number of ratepayers pick up the bill for the other million ratepayers.

Last night, Tourism Industry Aotearoa chief executive Chris Roberts said the targeted rate would be a disaster for Auckland and should be withdrawn.

He said visitors to Auckland spend $7.5 billion a year, of which the accommodation sector only accounted for 9 per cent but which is being asked to pay 100 per cent of the targeted rate.

I’m all for user pays, but it should be on all tourism businesses, not just hotels and motels. And they should then get to decide what level of funding for ATEED is deemed worthwhile.

Last week, motel owner Troy Clarry told councillors his Whangaparaoa 14-room motel’s rates would rise from $13,600 a year to just under $40,000.

In 2015-16 he made $529,000 from the motel on 65 per cent occupancy and after taking a $52,000 salary for two people net profit before tax was $27,000.
Much of this was reinvested in the business but the new rate would swallow nearly all of this.

So Goff’s tax will mean the motel is no longer profitable.