The strain on Queenstown's infrastructure, driven by booming tourist numbers, is causing a pressure point that cannot continue, the town's mayor says.
Queenstown is a tourist magnet, known for its views and adventure sports. Photo: 123RF
Jim Boult met with Deputy Prime Minister Winston Peters and other senior government ministers last week in Wellington to discuss how the town can pay for much needed infrastructure projects and maintenance.
Mr Boult told RNZ that if a new funding model was not found the level of services provided would deteriorate as the council could not afford to install or maintain the water, roads, toilets, sewerage and bridges needed to keep up with the demand.
The Queenstown Lakes District Council preferred a bed tax and the government was now seriously considering whether to give the proposal the go-ahead, he said.
"We favour a bed tax, it's done internationally, a very simple model, either a set fee or a percentage of the room rate, it's an add on, a small amount of money so it can be directed back to the area impacted by tourism growth."
Queenstown Mayor, Jim Boult. Photo: supplied
He said he put forward a range of numbers at the meeting, from a $5 bed tax, which would generate about $22 million a year, or if it's $10 it would generate $44m.
Mr Boult said the council did not favour a border levy as the sum required would be significant.
"If you take a family travelling on a $200 Trans-Tasman airfare who may not be staying in commercial accommodation, and they stay with friends and relatives, it would be a significant impact.''
But he said he was open-minded to other suggestions that would be a better way of funding the infrastructure.
"There was a suggestion of returning a portion of the GST to the areas where it's generated from tourism, that's lovely and that would be great but the GST is used to fund all sorts of things in New Zealand and where does that money come from?
"We do see this [the bed tax] as a logical way to go.''
Mr Boult said while there was no set timeframe for the government to make a decision, he expected to hear back within a few months.
"We do have a bit of a burning bridge, it can't sit there festering for a year or more.''