The Ol' Switcheroo

What is Nicola Willis doing with the International Visitor Levy?

I can't take it
How could I fake it?
How could I fake it?
And I can't take it
How could I fake it?
How could I fake it?

Song: The Lonely Biscuits.

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“A bit nippy”, I thought when I woke this morning, and then, soon after that, I wondered whether hell had frozen over.

Dear friends, I don’t wish to alarm you, but it was a decent, long-form piece of political writing in the NZ Herald that wasn’t written by Simon Wilson and made the government look pretty dodgy.

I wondered if Aunty Audrey had gone away on holiday and actual informative content had slipped through in her absence. Don’t get too excited, though, being worth reading; they had chucked a paywall on it, so many people won’t be able to read it.

Mind you, fair play to them; journalism has to be paid for like anything else - unless you’re happy to restrict your consumption to things that don’t upset the advertisers too much.

I’m not suggesting that the good folks at NZME have chosen to hide more inquisitive, challenging views behind a paywall out of political bias. Instead, leaving the usual crowd of ex-National and ACT MPs to deliver their fixed points of view as freely available opinion pieces.

Far from it, I suspect they’ve done it to avoid drawing readers' attention to the fact that is what journalism used to look like and perhaps give them pause to consider why they don’t receive more of that and less lightweight fluff and puff.

Anyhow, enough blathering on with the article; it’s a classic tale about a certain Finance Minister looking for more revenue to plug the gaping hole in the hull of the good ship Aotearoa that she has created.

In October, our coalition government, the “low taxes” crowd - if you remember them from the election, increased the International Visitor Levy (IVL) from $35 all the way up to $100. A whopping increase and a tax equivalent to a whole year’s subscription to Nick’s Kōrero, just quietly. If that was too subtle, look out for low-flying bricks below...

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Ok, back to the story…

So, the new and increased IVL is expected to bring in an additional $149m. Can you say Cha-Ching? Because Nicola Willis sure can.

You know she’d be all over any new government revenue like Andrew Bailey at a wine tasting. Unfortunately for the Finance Minister, by law, the money has to be spent on tourism and conservation, which doesn’t sound at all like taxes and ferries.

Apparently, the Herald has documents showing… Sorry, I should say “revealing” as they always do, which makes it sound like the words were in invisible ink, and through detective work, they’ve managed to make them visible instead of simply having read them. Documents show some argy-bargy behind the scenes, as various Ministers clamoured to claim the nest egg with as much enthusiasm as the most eager tax and spend socialist.

I hadn’t realised that in the 2024 Budget, $307m of Crown funding was replaced with existing and future IVL revenue. So instead of the relevant areas of conservation and tourism getting a boost from this increase in the visitor’s levy to do their important work, they merely stay still as the government diverts the money to give itself more “fiscal headroom”.

It’s the sort of move that would’ve seen Nicola Willis stamping her feet, rolling her eyes, and complaining endlessly if the other lot had done it. It's funny how things change.

Writer Derek Cheng describes the diversion of funds as a “switch”, which I assume is short for “the old switcheroo”, and says, “The switch essentially substitutes cash from foreign tourists for Crown money, while overall spending stands still.”

This is brilliant if you’re the Finance Minister but not so good if you’re DOC, which the article points out is $1.5 billion short each year of what it needs to meet its biodiversity objectives.

Finance Minister Nicola Willis delivering the Budget Policy Statement in December. Photo / Mark Mitchell.

Or doing the job of providing tourist infrastructure, you know, things like more toilets in our places of great beauty. Which would not be an unreasonable expectation of how a tourist tax might be spent.

As you might expect, environmentalists and tourist operators are less than thrilled about this additional charge to tourists being diverted to pay for existing spending they already receive. They would like to see some benefit from the money.

Cheng provides the following summary of events as the government considered what they could get away with:

• Ministers agreed to raise the IVL from $35 to $70 in March (which officials preferred, and tourism advocates said was too high), before back-tracking and then hiking it to $100 after stakeholder consultation.

• The consultation was in danger of being jettisoned as Budget ministers sought to push through the IVL increase for Budget 2024. Slow progress led to them considering passing a new law so the legal requirement for consultation didn’t apply. This was eventually dropped.

• The slowing of progress centred around Willis’ interest in exploring how the IVL could improve the Government’s finances, including using it for general Crown purposes.

• She eventually abandoned this (it would require a law change), but achieved a similar outcome in Budget 2024 by using the funding switch.

Doesn’t that sound like this government’s mentality of fast-tracking without listening to concerns? That they considered a law allowing them to legally not consult?

The Tourism and Conservation sectors were already concerned about inadequate spending. They had experienced funding cuts in the budget of 6.5% to 7.5%, and Willis has demanded that another $50 million be cut from their budgets over the next four years. In addition, she has been eyeing up that IVL money:

Back in February, MBIE provided the government with the following options:

• Changing the law so the IVL didn’t have to be spent on tourism and conservation, and could be returned to the Crown.

• Raising the IVL rate and using the additional revenue to replace cuts to Crown spending (a funding switch).

• Raising the rate and using the additional revenue for tourism and conservation purposes in line with current legal requirements.

Ultimately, the first two options were found to be legally precarious, would take too long, or look too bad. As a result, they ended up with a higher IVL than the planned $70. The two departments retained some revenue, and the balance went to Nicola Willis to cover funding they were already receiving.

Stakeholders were surveyed: “Asked about using the IVL to fund Tourism NZ, only 23% of submitters were supportive, including 8% strongly supportive, while a majority (54%) were opposed, with 29% strongly opposed.”

Regional Tourism NZ chair David Perks said: “The IVL should be spent on projects that support the sustainable growth of tourism, and those projects should be investment over and above what is spent from the Government’s consolidated fund.”

Labour’s tourism spokeswoman, Cushla Tangaere-Manuel, said, “The IVL is there to support and enhance tourism and conservation. People come to Aotearoa for our beautiful landscapes. They don’t come, so Nicola Willis is slightly closer to surplus.”

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The paywalled article in the Herald contains much more information, including a part that will make you think even less of Tama Potaka, as hard as that might be to imagine.

Unlike so much else in that paper, it is a thorough piece of journalism and what people need to read.

Today, their lead story is about a former MP who shoplifted at Pak and Save last year. A sad tale, although it is providing entertainment for some like Liam Hehir (pronounced “asshole”):

Liam is somewhat out of touch, as other media outlets have now named Golriz.

I acknowledge that I’m a biased Green supporter, and it makes me feel ill to consider the low point this remarkable young woman has reached.

But is it really of such public interest that it warrants the front page? The article about shoplifting is accessible to all. Further down the page, hidden from many behind a paywall, there is good journalism about a story that genuinely matters, yet hardly anyone will read it.

So, yes, I do feel somewhat bad for discussing someone else’s column so much, but I think it’s an important story.

So, too, is the mental health of our female MPs who receive such horrendous abuse. As for the shoplifting, I couldn’t care less. The law is the law, and she should be held responsible for her actions, but I hope people can find a bit of empathy.

Seriously – is that what qualifies as front-page news when Nicola Willis is siphoning hundreds of millions of dollars in new revenue to cover existing funding and being less than transparent about it?

What do you think about all this?

Have a great day, all of you lovely people; I’ll especially be thinking of Golriz today. I’m not justifying stealing, but this just feels so sad, and I hope someone is giving her the love and support she deserves.

Something a bit quirky today, with some ready melodies for ear-dwelling. The Lonely Biscuits with Switcheroo.