National slams bed tax proposal as it launches policy funding council tourism spend

National is tearing strips off the bed tax proposal it explored in government as the party uses its plan to fund council tourism spending to continue its attacks on the possible taxes under a Labour-led coalition.

The party’s coalition partners are instead directing their own jabs towards National, with David Seymour claiming National policy takes from Act’s and Winston Peters accusing National of rearranging future Budgets for a “convenient campaign slogan”.

National leader Christopher Luxon, together with finance spokeswoman Nicola Willis and tourism spokeswoman Louise Upston, today announced it would take almost $400 million over four years from international visitor levy revenue and share it proportionally with councils to assist with tourism spending.

Luxon said, if elected, National would distribute $86m in the 2027/28 financial year, rising to $106m in 2030/31, to councils based on the number of guest nights their region hosted.

The remainder of the revenue from the $100 per person levy would go towards $100m to support conservation annually while also creating a $50m-per-year Tourism Priorities Fund to support tourism growth.

Citing a four-year levy revenue forecast of $985m, the party’s policy document calculated $385m would be directed to councils once the conservation and tourism fund allotment was removed.

National leader Christopher Luxon and MPs Nicola Willis and Louise Upston said a bed tax would place further costs on Kiwis. Photo / Emma Tavai

Councils would then get a share of that funding based on the number of international guest nights they hosted.

Using visitor data for the year ending June 2026, the party calculated Auckland Council would receive a 22.3% share of the $86m in 2027/28, which was about $19m. Queenstown Lakes District Council would receive the second-highest share (19.9%), which was about $17m.

The annual $100m for conservation fell below normal baseline conservation costs across government by about $105m over four years. National was proposing to fund that through future operating allowances.

In Government, Luxon signed deals with the Auckland and Queenstown councils that committed to exploring an accommodation levy or a “bed tax” that councils could impose on local and international visitors to their regions to help fund tourism investment.

However, ahead of National launching its “no new tax” slogan, Luxon killed off the idea, arguing it would place unreasonable costs on Kiwis travelling the country.

Much of Luxon’s announcement was criticism of a bed tax, the National leader referring to how two-thirds of all guest nights nationally were domestic visitors.

“A bed tax would disproportionately impact and make it more costly for kids and families attending the AIMS Games this week or any other sporting tournaments, for our truckies staying a night in a motel because of work, or families attending a funeral or visiting friends, or parents taking their kids away for the school holidays, and quite simply, that’s not right and it’s not fair.”

Luxon claimed it was difficult to compare his policy to a bed tax as “no single proposal had been locked down”. Auckland Mayor Wayne Brown had previously supported a 2.5% levy which would return about $27m per year.

He also noted the bed tax, which would require a new law to be passed, wouldn’t provide revenue until mid-2029 while payments from his policy would begin mid-2027.

Labour leader Chris Hipkins has said a bed tax was a decision for councils. Photo / Anna Heath

Willis, who committed to not raising the visitor levy for at least three years, defended drawing on future Budgets to fund the conservation cost shortfall, promising it would be “fully costed” in National’s fiscal plan.

She too went on the offensive regarding a bed tax: “Our proposal is quick, it’s instant, and no one will be paying more tax to make it work.”

Shortly after the policy was released, National campaign chairman Simeon Brown issued a statement claiming, “Labour’s promised bed tax will leave New Zealanders out of pocket”.

Labour leader Chris Hipkins had previously said a bed tax would be a decision for councils, although it would require the government to pass the necessary legislation.

In a statement, Seymour welcomed his coalition partner’s policy as a version of his own local tourism dividend, which proposed to pay councils $1 per guest night in their area, funded from the GST and visitor levies tourists paid.

“Act is proud to have shaped the debate on this issue, when so many parties wanted to introduce a new tax, there is now a clear pathway to solve the same problem without a new tax.”

Peters, speaking as New Zealand First leader, criticised the policy while expressing support for a bed tax which would only apply to international visitors.

“Sadly National’s policy is not ‘ring-fencing’ the visitor levy. It is just reallocating the operating allowance to ensure they can continue to use a convenient campaign slogan.”

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.