Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill

Talofa lava, manuia le aso, manuia Samoa. Members, when the committee suspended last night, we were considering Part 2 of the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. Erica Stanford had the call and has four minutes and 30 seconds remaining if she so wishes.

Thank you, Mr Chairperson. I wasn’t sure if you’d recognise me. I was looking a bit rough at midnight last night—

CHAIRPERSON (Adrian Rurawhe): I think we all were.

—it was a long day—so was the Minister, to be fair. In fact, you’re not looking much better this morning either, to be honest. I want to pick up where I left off last night.

💬 Hon Chris Hipkins: Gerry looks that way all the time.

That’s uncalled for. I want to pick up where I left off last night. Just to remind the House, I was talking about Australians. [Interruption] I know, it’s pretty rough for a Saturday morning on a long weekend to be talking about Australians, but here we go. It is actually quite important, because, obviously, in reading the bill—which, frankly, didn’t take long—and all of the information surrounding the bill, we realised that Australians are exempt.

Now, when we look at this, we realise that Australians make up a huge portion of our international visitors—in fact, 40 percent of our international visitors—and they are big users of our conservation estate. They walk and they partake in many tourist activities. In fact, everywhere you go in New Zealand, you meet an Australian when you’re out touring around. They are big users of our infrastructure, so to exempt 40 percent, which is quite a big proportion of our international visitors, is a big step. We looked at how much that would bring in if they were to be included, and that was $36 million, which is a sizeable chunk. We did actually think that that would have allowed the Minister to reduce the overall visitor levy, had he included Australians, making it a bit fairer for everybody and encouraging more people to come rather than not encouraging them.

So my question to the Minister is—because I asked this question in the House last night, or I made the point in my speech, and Minister Kelvin Davis in his contribution told us the reason why Australians were exempt, and he was quite clear. He said that Australians don’t spend as much to come here, they don’t come for as long, and so the proportion of what they would spend would be far greater than compared to someone who was coming from, say, America and spending more to come here, and he didn’t want to put at risk 40 percent of our international tourist market. You know, that makes sense, but I pointed out in my contribution later on, in the second reading, that, actually, he has the power under regulation to prescribe the amount of that levy in respect of different categories or classes of person. So, in fact, he has the ability to reduce the amount that Australians could potentially be charged for this visitor levy. It’s in the regulation; he has the ability to do that to make it fairer for everybody.

Now, I suspect that’s actually not the case for why Australians are exempt, and he wasn’t entirely forthcoming with the real reason. We suspect—as per James Shaw’s contribution, when he came down last night to ask some very pointed questions—that it’s more likely to be the fact that we are unable to use the ETA system to collect the levy from the Australians; so it’s actually more a difficulty around the process than it is around anything that Mr Davis was saying. But I want to come back to this particular part, 399A(3)(c), where it says the Minister is allowed to change the calculation “in respect of different categories or classes of person”, because I want to ask him specifically what that means. Why didn’t he, firstly, use it for Australians so that they paid a lower amount, more in proportion with what they pay to get here and the shortened length of time they stay here? But I also want to know what else that might mean. Would the Minister perhaps say, “Look, most of our tourists from Germany are backpackers. They don’t spend so much when they come here. We might actually make that calculation a bit less for them.”, because, you know, they also don’t spend so much. Or perhaps he might take someone else who’s relatively close to New Zealand who doesn’t spend as much or come here for as long.

The regulation is in here, and I want to know exactly what he’s using it for, because the problem with this bill is that there is no explanation as to why a lot of these things are in here or how they’ll be used and how they’ll be applied. So I am very interested to find out exactly for whom, and in what circumstances, 399A(3)(c) would perhaps be used if it’s not being used for Australians.

Thank you very much, Mr Chair. There have been a number of questions about the operation of the regulations that can be made under new section 399A. There are two types of exemptions for the levy; both are quite normal in the immigration system. The principal Act, the Immigration Act 2009, provides for special directions that allow the use of exemptions from immigration requirements in special or unusual circumstances. The special direction provision in this amendment bill is consistent with, and is, in fact, modelled on, those existing provisions. Standard practice is that the decision is delegated to an immigration officer, so individual exemptions will largely be delegated to an immigration officer.

The regulations also provide for exemptions for groups or classes of people. Again, this is a normal part of the immigration system. For example, refugees do not pay fees for the immigration system. It could be possible, for instance, to determine that people who were coming to New Zealand for medical purposes that were legitimate medical purposes may not be charged an international visitor levy. That’s the way in which the exemptions will operate. I know members were interested in that last night.

Just picking up on some of the comments that Erica Stanford just made, questions about why the Government has chosen to exempt Australians from paying a levy rather than setting a lower levy for Australians. That was feedback that we received from the industry during the extensive consultation that occurred in the lead-up to this legislation—that, you know, they would prefer that Australians were not charged, because of their proximity, because their airfares are cheaper and, therefore, as a cost of the overall spend in New Zealand, it would be a larger proportion.

Also, of course, there is the point that James Shaw made that we have reciprocal arrangements with Australia and we need to make sure that we are consistent in our treatment of Australians. Australians, of course, when they come to New Zealand, actually are provided with a residence visa upon arrival in New Zealand and have freedom of movement, just as we have freedom of movement in and out of Australia. So it’s consistency—it’s a consistent approach. By and large, Australians are treated the same as New Zealanders for movement across the New Zealand border, and we would want to do the same with this international visitor levy.

Again, I thank members for their questions and comments and hope they found my responses useful.

I’m really concerned about the message that this bill will send to our international visitors. Basically, they are saying that you are not equal. Some people will be more welcome; some people will be less welcome. The Minister just said that the criteria for exemption is that, well, Australia is closer to us and airfares are cheaper. That should be exactly the reason why Australia should not be exempt, because they pay less to come to New Zealand. Other people will pay more to come to New Zealand, but at the border they will be charged more—another $35, or even more. So this is a signal, I believe, that will be wrong to our international visitors.

What are the criteria for the Minister, really, to decide who should be exempted? Now, they say it is international interests, but how do you define international interests? For example, the Chinese market has been so important to us and the growth of the China market has been substantial in the past few decades. We have worked very hard to build up the China market. I have a table here. You’ll see the growth of the China market—well, it is in Chinese. In 1992, only 2,789 Chinese visitors, and ranked 30th on our table, right? Then, in 2012, it was ranked No. 2, after Australia, with 180,000 visitors. That’s the growth of the China market.

Now look at this table. This is for the year ended October 2018. The total number of international tourists was 3.8 million—3.8 million international visitors. Australian visitors were 1.48 million, about 40 percent of our total international visitors. Then you have some other South Pacific nations like Fiji at No. 17; Samoa at No. 20; and Tonga at No. 24. These people from these countries are a large number but they won’t be charged, but people from far away, who pay a lot of money, will come to New Zealand and then be told, “Oh sorry, you have to pay more.”

Another reason why I believe this is wrong is when you look at the contribution of individual visitors, right? Here’s another table. This is a bit old. This is 2011: the top 10 countries who sent visitors to New Zealand. Well, No. 1: Australia, with 1.1 million visitors—well, this was in 2011. No. 2: the UK, with 230,000. Then there is the USA and then China. Well, look at individual spending.

💬 Kanwaljit Singh Bakshi: India?

Sorry; India’s not on top. It’s not in the top 10. The No. 1 spender was South Korea, individually over $4,000, and then you have Japan at $3,000 and China at over $3,000. Australia, in terms of the number of visitors, is No. 1, but in terms of individual spending, it is No. 10. So we are turning away our valuable visitors by charging them more. This is what this Government is trying to do. What kind of signal are they trying to send? I’m just wondering why this is happening. We do need more money for our visitors and for the tourism sector. We do need more money, but, by turning away more valuable visitors, this Government is actually collecting less, so, in the end, we’ll get less by having this tax. This is a no-brainer. I don’t know why they have done this.

This whole process is so rushed, and, in the end, we have no say. The Minister will decide or set regulations. The Minister will say, “Well, we did a thorough consultation.” But my feedback—the feedback I have gotten from Chinese tourism operators in New Zealand—is they hate this. They hate this. They believe this will do damage to the China market, which the previous Government spent a lot of time and energy trying to expand. So, really, this is a very bad bill.

I move, That the question be now put.

The question is that Erica Stanford’s tabled amendment to clause—sorry, we’ve just got some new tabled amendments. So the first question—

💬 Hon Todd McClay: I raise a point of order, Mr Chairperson.

CHAIRPERSON (Adrian Rurawhe): I’ve already started putting the question.

💬 Hon Todd McClay: But the member moved a closure motion and you haven’t taken that vote yet.

CHAIRPERSON (Adrian Rurawhe): No, I didn’t accept it, and no one sought the call, so I’m obliged to put the question.

The question was put that the following amendment in the name of the Hon Todd McClay to clause 7 be agreed to:

insert in new section 399A the following new subsection:

(4A) Any exemption by special direction under subsection (4) must be reported to Parliament by the Minister with the reasons for the exemption/s, and the impact of any exemptions.