New Zealand

Accommodation NZ disappointed LGNZ joining APTR appeal

Move seen as last-ditch effort to support move to overthrow Court of Appeal ruling

Accommodation Association NZ has expressed its disappointment with Local Government NZ (LGNZ) having at the 11th hour applied for and been granted leave to join Auckland Council’s appeal over the legality of the Accommodation Providers Targeted Rate (APTR).

National Board Member, Troy Clarry said the move was extremely disappointing given the issue has been going on for five years.

“But only now, just weeks out from the Supreme Court hearing, has LGNZ decided to be a part of it,” he said.

“There is clearly more to this last-ditch effort to support Auckland Council’s bid to overturn the Court of Appeal’s ruling that threw out the targeted rate.

“We do not believe LGNZ will add anything new to the case, which the council has had five years to argue and spent well over $1 million of ratepayer money and countless hours of officials’ time – and climbing – while it’s being forced to make massive budget cuts.

“The facts of the case remain the same. As the Court of Appeal found in overturning the High Court ruling, the council did not take into account the accommodation sector receives less than 9 percent of the tourism income while paying 100 percent of the funding. There were very limited benefits for operators, and the court recognised that.

“Also, the council wrongly assumed accommodation providers could pass on that cost, which they genuinely are unable to do.

“This is more ratepayer money to support an appeal Aucklanders were already paying for, and they should be asking why their money is being spent in this way for no extra benefit.”

Mr Clarry said the organisation will continue to support its Auckland members while advocating for a fair funding model for tourism that is well thought-out and designed with the involvement of the industry.

“But while the focus has been on this case and how it affects accommodation ratepayers, there’s a much bigger concern this move by LGNZ indicates it has a bigger target – the application of targeted rates and the ability of councils across New Zealand to be able to use them to raise money for projects that do not have any benefit for the targeted ratepayers,” he said.

“We suspect this indicates other councils are waiting to implement the same targeted rates.

“And they may not be just an accommodation-specific. LGNZ’s involvement suggests they are advocating for the ability to use the targeted rate function to target any small group and charge what they like with no direct benefits needing to be demonstrated.”

The APTR was a financial levy established in 2017by Auckland Council and Auckland Tourism, Events and Economic Development (ATEED), in which hotels would have paid 100 percent despite only receiving some 10 percent of the overall visitor spend in New Zealand.

When implemented, the tax was widely condemned by the hotel sector and members of the New Zealand Government.

The APTR was suspended in April 2020 in an effort to help hotel owners navigate what were then the early months of a largely unknown pandemic.

The Court of Appeal will hear the case on July 20-21, 2022.


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