Cheaper now for most overseas travellers

Press, 22 June 1979, Page 2

Cheaper now for most overseas travellers

By

LES BLOXHAM,

travel editor

New Zealanders who intend to travel overseas got off lightly in the Budget Although they will have to pay, from July 1, a $25 departure tax in addition to a $2 “airport development charge” when they leave the country, the much disputed 10 per ’ cent travel tax on fares and other transportation charges will then be abolished. Mr Muldoon did not, as was expected cut travel allowances or restrict the use of credit cards, but the 5 per cent devaluation will mean that travellers will, from today, have to pay more for their foreign funds. The devaluation will also eventually force a slight increase in international air fares.

However, domestic fares are likelv to be increased substantially as a result of the hefty new tax of 5c a litre on jet fuel. This is expected to add $4.5M to Air New Zealand’s present annual bill of SISM for domestic fuel, and $300,000 to Mount Cook Airlines’ costs for its four Hawker Siddelev 7485. International flights, including those of Air New Zealand, will not be subject to the tax.

In spite of these increases, most international travellers will be better off when the travel tax, which was introduced in the 1976 Budget, is abolished at midnight on June 30.

For instance, London-bound passengers on round-trip excursion tickets will save about $lOO, while those flying from Christchurch to Los Angeles and back on highseason budget fares will save about $5O. Travellers to destinations which were exempt from the travel tax, such as Fiji. Rarotonga. and West Samoa, will, however, pay an additional $25 for their journey. The Minister of Customs (Mr Templeton) said that passengers who had paid the

travel tax for travel after July 1 should apply for a refund to the agency which issued the tickets. The Government had deliberately allowed a phase-in period to allow them to obtain a refund and this should be done without delay, he said.

Passengers travelling up to and including June 30 will still have to pay the travel tax.

The $25 departure tax will be applied only to tickets issued in New Zealand. It will not, therefore, have a detrimental effect on New Zealand's inbound tourist industry. Children under 12 will pay only $5.

Based on the 340,000 New Zealanders who travelled overseas last year, the new tax could be expected to produce SB.SM, well below the SISM harvest from the travel tax.

In his Budget, Mr Muldoon said that to avoid confusion, the existing departure tax of $2 would be renamed the “airport development charge.” The revenue would continue to be used for capital development at airports, he said. Mr Muldoon also gave the tourist industry another shot in the arm by including it in the revised system of export incentives. “This reflects the Government’s recognition of tourism as a major earner of overseas exchange,” he said. The move will place firms earning foreign exchange from the “sale” of tourism services in a comparable position with other exporters. The travel industry's reaction to the Budget was generally favourable, travel agents being elated at the decision to abolish the travel tax. While Air New Zealand and Mount Cook Airlines have been stunned by the severity of the jet-fuel tax, the travelling public in general will find more good news than bad in Mr Muldoon's pronouncements.