The New Zealand Customs Service and the Ministry for Primary Industries are significantly increasing the border processing levy (BPL), which will increase from 20.11 New Zealand dollars to 43.73 New Zealand dollars per airline passenger return trip, and from 21.06 New Zealand dollars to 36.72 New Zealand dollars per cruise passenger from Dec. 1.
The BPL was introduced in 2016 and is used to fund customs and biosecurity services for all arriving and departing passengers, including New Zealanders. The cost recovery model ran into problems in 2020 when New Zealand's borders were closed, and the government has had to directly fund the agencies.
"We are surprised the BPL is going up before we know when our borders will actually open and what the demand for travel will be," TIA Chief Executive Chris Roberts said.
"The new fees are supposed to recover the full cost of the border services over the next three years, but it is impossible to accurately predict what the travel patterns will be."
Having secure border services in a pandemic is a critical public health requirement, and it is not sensible to reintroduce the full cost recovery model while border restrictions remain in place, Roberts said.
The TIA had favored delaying the resetting of the levy until September 2023, followed by a carefully staged return to a full cost recovery model matching the expected gradual recovery of international travel over the next five years, Roberts said.
Since the COVID-19 outbreak, New Zealand tourism industry has been struggling for survival, since most international visitors were unable to come to New Zealand due to the border restriction.
China has been New Zealand's second-largest international visitor market since 2012 and one of the most valuable in terms of holiday visitor spend, according to New Zealand's national statistics department Stats NZ.
New Zealand's borders are scheduled to reopen in phases in 2022 once the vaccination programme is fully rolled out by the end of 2021, according to government's latest plan.
Tourism in New Zealand comprises an important sector of the national economy, which directly contributed about 6 percent of the country's gross domestic product prior to COVID-19.
As New Zealand's biggest export industry contributing 20.4 percent of total exports, it directly employed 8.4 percent of the New Zealand workforce before COVID-19, according to Stats NZ. (1 New Zealand dollar equals 0.70 U.S. dollar)
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