'No way to treat councils': Act criticises Nats over handling of tax deal

Otago mayors have expressed disappointment as talks about the Queenstown deal have officially stalled, with a date for it to be signed put off a second time.

The Otago Central Lakes agreement, a flagship promise by National, was supposed to be signed the day National MPs flocked to Wellington for the leadership challenge on August 12.

The deal included a commitment to explore an accommodation levy policy in 2027.

The Herald understands a second date of August 31 was then diaried.

But now those meetings have been canned, after the district’s mayors said they were pausing negotiations.

Coalition partner Act is also criticising National over the way the deal has been handled, stepping in to offer a meeting with local mayors.

“The Otago Central Lakes councils remain committed to the regional deal and to the long-term partnership we have been building with central Government over the past year,” Queenstown Mayor John Glover, Central Otago Mayor Tamah Alley and Otago Regional Council chairwoman Hilary Calvert said in a joint statement on Thursday night.

“We are disappointed to find ourselves in a position where we need to reopen discussions on an agreement that we believed had been completed and was ready for signing.”

The joint statement said the regional deal resulted from “extensive negotiation, collaboration and good faith engagement from all parties”.

“Our councils had approved the deal on that basis, and we understood that Cabinet had also agreed to the package that had been negotiated.”

Queenstown wants the funds from the proposed bed tax to help pay for much-needed infrastructure, while Auckland, which has already signed a city deal, would use it to pay for events.

“The recent proposal to replace that commitment with alternative wording understandably raises questions for our councils and communities about what will now be explored, and what that means for the long-term ambitions of the deal,” the Otago mayors’ statement said.

“Our decision to seek further discussions should not be interpreted as a withdrawal from the regional deal. Quite the opposite. We remain committed to the vision, opportunity and partnership that the regional deal represents.

Act's Todd Stephenson has sent the Otago mayors a supportive letter. Photo / RNZ, Samuel Rillstone

The Herald has seen a copy of a letter written to Glover, Alley and Calvert from Act MPs Todd Stephenson and Cameron Luxton.

It says while Act has long opposed a bed levy, it recognises the intense funding challenges the district faces.

“You spent a year negotiating a regional deal in good faith,” the MPs say in the letter.

“Finding out afterwards that a central part of those discussions was no longer on the table is no way to deal with councils. Act’s position has remained consistent. National’s has changed. We would like to offer two practical steps to support growth and economic diversification under the regional deal.”

One of those is Act’s proposed Local Tourism Dividend, which would give councils $1 from existing Crown revenue for every guest night in the district, with the cash coming from GST and visitor levies tourists already pay.

The more tourists that visit an area, the more money for councils.

“We do not claim that $1 per guest night will meet every infrastructure need. It is a practical first step that returns some of the revenue councils already help generate. After a year of debate about a levy that was never likely to survive a ‘no new taxes’ campaign, councils deserve something that can actually be delivered.”

The pair then asked to meet with the mayors.

Act was reportedly unhappy with National earlier in the week over its handling of a proposed social media ban for under-16s.

Asked to respond to the issues raised by the mayors, Local Government Minister Simon Watts said: “Out of respect for the negotiation process, we will not comment on the details of the deal while discussions remain ongoing.

“A deal for the region would deliver significant benefits and support better outcomes for their communities, so we look forward to getting this deal signed.

“We will continue progressing the city and regional deals programme, delivering the outcomes in the historic Auckland and Bay of Plenty city regional deals.”

This week, Watts told media that National would work with councils to find another option to help them fund infrastructure and events.

The Auckland deal, signed by central Government and the council in April, also pledged to investigate a bed levy or charge next year.

Auckland Mayor Wayne Brown has blamed “panicking” politicians for the backdown.

New Zealand First leader Winston Peters said the deal was signed by the Government, not the National Party, and therefore the bed levy option remained in place.

Watts conceded it was a “government policy” but insisted National would not forge ahead with it and it would be part of any post-election talks.

Katie Bradford is a senior correspondent at the Herald. She has been a broadcast journalist for more than 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.