The proposal to triple the country's only regional tourist tax could discourage cruise ships from visiting, council warned.
Halfmoon Bay in Stewart Island Photo: RNZ / Ian Telfer
The Stewart Island visitor levy has been $5 since it was introduced in 2013. However, the Southland District Council is proposing to raise it to $15 to help cover the cost of upgrading its buildings.
A public outcry prompted the council to hold a hearing in Invercargill today.
New Zealand Cruise Ship Association chief executive Kevin O'Sullivan said the hiked levy would put the continuation of cruise ship voyages to Stewart Island at risk.
Cruise ship passengers already pay the levy whether they get off the ship or not, Mr O'Sullivan said.
Boosting the fee could encourage cruise ship companies to look elsewhere, particularly as they have reported the island's infrastructure was poor, he said.
The levy is being reviewed along with its bylaw, with proposed changes including allowing multi-year funding which could cover project loans, having a council committee allocate funds and making support available for wages.
Manfred Herzhoff, of Rakiura Adventure, said the community, not the council, should decide where funds go.
"The latest proposal of the visitor levy is a blatant power grab and money-making scheme by Southland District Council," Mr Herzhoff said.
"They don't want to have to spend the money on necessary infrastructure, having it come out of their own budget so, why not make the island an excuse to get their own tax, called tourist levy?"
Stewart Island was totally lacking suitable infrastructure and a future plan to handle the increasing tourist numbers, he said.
Consultation, which closed earlier this month, resulted in 121 submissions with the majority asking for the levy not to be increased. It's collected more than $750,000 since it was introduced.
Real Journeys general manager Paul Norris said the company supported most of the changes, but not the fee hike. It was such a significant one-off increase to the visitor levy that it could price Stewart Island out of the market, Mr Norris said.
Instead he suggested gradually increasing the levy by setting up a three-yearly review.
Stewart Island Flights director Bill Moffatt questioned why the council wanted to dip deeper into the pockets of visitors.
There was more government funding available, including the soon-to-be-implemented national tourist levy, to pay for any upgrades, he said.
Southland District Mayor Gary Tong said the $5 fee just wasn't enough anymore. To get infrastructure up to scratch, he said a $9 levy would help foot the bill.
But where would all the extra funding go? Mr Tong said the wharves would receive a decent chunk as they needed to be fit for purpose.
Boosting a local rate would cost a lot of money and residents had already made it clear they didn't want to pay for infrastructure used by visitors, he said.
The levy needed to be enough to cover current costs and future demands.
More than 20 submitters are scheduled for the second hearing on Stewart Island tomorrow before a decision is expected next month.