P.M. lambastes the travel agents

Press, 22 October 1976, Page 1

P.M. lambastes the travel agents

From

LES BLOXHAM,

, travel editor

New Zealand travel agents were castigated by the Prime Minister (Mr Muldoon) in Auckland yesterday for their “hysterical” response to the foreign travel tax.

He said that their “real concern” was the effect the tax was having on their profits. In a hard-hitting address to a seminar organised by the New Zealand Institute of Travel. Mr Muldoon maintained that the agents had prospered at the expense of the country’s overseas balances.

Firing a broadside at members of the Travel Agents’ Association for holding their annual convention in Fiji, and for announcing that they intended to hold the 1978 meeting in Singapore. Mr Muldoon said: "That shows the extend of their concern for our external funds.” He then issued a warning: “If New Zealand organisations are going to adopt this practice, they should not be surprised if a subsequent Budget makes expenditure on such conferences totally not taxdeductible.” Whatever might be said about the imposition of the travel tax, it was quite clear that the amount being spent abroad bv New Zealanders was snowballing, he said. It had reached $274M in 1975 for fares and other travel costs.

The Government had considered various measures to restrict the demand on overseas exchange for travel, said Mr Muldoon. The Cabinet finally accepted that a tax on transportation charges only was the most effective and least objectionable method of dampening down that demand.

“The hysterical response from agents indicated clearly that their real concern was not the various ingenious arguments they put forward against the tax, but its effect on their profits. They have in recent times prospered well at the expense of our overseas balances.”

The amount of tax for most New Zealanders did not constitute an imposition. he said. “The majority of New Zealand travellers visit Australia, and even if they pay normal economy return air fares, the tax is only $32. If early payment fares are used, it

drops to only $2l. “After all. how strong has been the complaint against regular increases in fares far in excess of 10 per cent?” he said.

Mr Muldoon’s comments provoked prompt reaction from executive officers of T.A.A.N.Z. The president (Mr G. F. Alpe), the vicepresident (Mr R. H. C. Walshe), and the executive director (Mr A. L. McGowan) met immediately after Mr Muldoon had finished speaking. “It would appear that Mr Muldoon has not been kept fully informed by his colleagues, for in the words of the Minister of Customs (Mr Wilkinson), the official attitude of T.A.A.N.Z. has been ‘totally responsible and constructive,’ ” Mr Alpe said after the meeting. "T.A.A.N.Z. has objected to the tax only on the grounds that it is inequitable, and will encourage rather than discourage the

expenditure of overseas funds. The association will continue to press for those amendments which are necessary to protect the intersts of the consumer and the industry as a whole,” he said. “Holding a convention overseas is an accepted world-wide practice for professional and industry groups, and certainly our association has not broken new ground in this field. It believes that it is desirable to hold one convention overseas every three years in those areas which are important to its members.” Mr Alpe said that Fiji had been chosen this year because of the New Zealand interests in the island. “Surely this was endorsed by the Government when it exempted Fiji from the travel tax,” he said. The suggestion that New Zealand organisations might be penalised for holding conferences overseas was a

threat to the democratic rights of individuals and associations, and to the growth of the convention business in New Zealand. “Mr Muldoon should be aware that many members of T.A.A.N.Z. are actively engaged in promoting tourism in New Zealand, and have been responsible for getting several overseas organisations to hold their conventions here.

“Mr Muldoon’s attitude, which implies that tourism should be only a one-way business — into New Zealand — is totally out of touch with the realities of the industry, and the needs of the New Zealand traveller,” said Mr Alpe.