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New Zealand's Labour Party promises tourist tax, social spending as polls heat up
August 29, 2017 / 4:17 AM / 2 months ago

New Zealand's Labour Party promises tourist tax, social spending as polls heat up

New Zealand's new opposition Labour party leader, Jacinda Ardern, speaks during an event held ahead of the national election at the Te Papa Museum in Wellington, New Zealand August 23, 2017. REUTERS/Ross Setford

WELLINGTON (Reuters) - New Zealand’s opposition Labour Party says it will slap a tax on tourists to help fund new infrastructure amid a tourism boom and pour billions of dollars into health and education if it is voted into office next month.

The party unveiled its first detailed fiscal policy on Tuesday, just weeks away from the Sept. 23 national election.

The election is shaping up to be a tight race as the center Labour closes in on the governing National Party following the promotion of charismatic Jacinda Ardern to the Labour leadership earlier this month.

Labour said on Monday it plans to charge every visitor a NZ$25 fee which would be ring-fenced for a NZ$75 million ($54.4 million) fund to pay for infrastructure throughout the country.

The party would speak with customs and immigration officials to find the most efficient way to collect the levy, Labour tourism spokesman Kris Faafoi said via text message.

A record surge in tourism in the last three years has fueled New Zealand’s impressive economic growth, but left the Pacific nation’s infrastructure straining, with locals complaining of everything from clogged small town public toilets to once-tranquil nature walks crowded with people and rubbish.

The small nation with a population of around 4.5 million saw visitor numbers leap 30 percent since 2014 to 3.6 million in the year to June, according to data from Statistics New Zealand.

The Treasury last week released a fiscal update showing parties would have less cash to spend on election promises than previously thought. It more than doubled the budget surplus forecast this year but expects lower surpluses for the next three years compared with predictions made in May.

Labour said on Tuesday its proposed spending, including NZ$8 billion extra on healthcare and NZ$6 billion on education, would be partly funded by ditching tax cuts planned by the National Party.

“Now is not the time for tax cuts,” said Grant Robertson, finance spokesperson for Labour, in an emailed statement.

The National Party has pledged to effectively deliver a tax cut by lifting income tax brackets across the board, lowering the amount paid at a higher rate, from April under a so-called “family package” to appeal to voters.

Labour surged 13 points to 37 percent on the popularity of newly-appointed Ardern in a poll released in mid-August, while the National Party dropped three points to 44 percent. Both parties will need the nationalistic NZ First Party to form a coalition government.

($1 = 1.3799 New Zealand dollars)

Reporting by Charlotte Greenfield. Editing by Jane Wardell and Jacqueline Wong

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