13 April 2012

Bed tax another example of council gouging says Motel Association of New Zealand

The decision by two councils to consider introducing a bed tax is an example of an unfair, unjust tax which is little more than an attempted cash grab at the expense of small business, says the Motel Association of New Zealand (MANZ).

Queenstown Lakes District Council and Auckland Council are looking at imposing a bed tax, a self-defeating move which will stifle business growth and harm the economic recovery in two key tourist regions, MANZ Chief Executive Michael Baines says.

“A bed tax would be nothing short of a nightmare to implement and enforce, with potential loopholes across all types of accommodation. How would this apply to campervans, bed and breakfasts or cruise ships?” Mr Baines says.

Overseas example shows that a tax of this type is difficult to administer, costing a large amount to enforce relative to the revenue gained. But the fact that councils are investigating such a step indicates a worrying attitude to small businesses which form the backbone of New Zealand’s economy.

“Councils seem to view small businesses like motels as one big money tree, which they can shake whenever they like and a never-ending supply of funds will appear,” Mr Baines says.

“This is far from the truth. In our sluggish economy many small businesses are starting to creak under the weight of costs being heaped upon them, and we need to see an end to it.”

The central government review of local government needs to encompass how revenue is gathered, as councils continue to ratchet up compliance costs on business to pay for their increasing levels of debt.

“In order to help New Zealand recover we need to see a partnership approach taken by both central and local government to small businesses such as motels. Less of a focus on revenue-gathering and more of a focus on fostering economic development will see everybody benefit,” Mr Baines concludes.

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