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British Airways plane - Source: ONE News
The British Government has announced an increase in departure tax for air travellers to New Zealand.
Prime Minister elect John Key has slammed the decision to increase the UK Air Passenger Duty (APD) next April from 85 pounds ($170 NZD) to 92 pounds ($184 NZD) per passenger coming to New Zealand.
"The APD places a significant burden on New Zealand businesses, on families who travel, and on our tourism industry," said Key.
He said the British Government has been reviewing the tax this year and the New Zealand Government has been talking closely with them about the issue.
"We made our views on APD clear on several occasions, including during Foreign Minister William Hague's visit here in January, and my own visit to London in April."
The previous UK Government used environmental grounds to justify imposing a higher levy on long-distance flights.
"With the tax for New Zealand-bound passengers set at four or five times the costs of offsetting the carbon emissions produced, this logic is without basis," Key said.
"The British Government's announcement overnight maintains this cost difference, and ignores the fact that environmental concerns about emissions are being addressed through the European Union's extension of its Emissions Trading Scheme (ETS) to aviation emissions."
The cost of APD will depend on whether a passenger's flight is short or long-haul and those in business and first-class travellers will be charged more than those with an economy ticket.
Key claims it is discrimination on the basis of distance.
He said he had been hopeful that the UK Government had been persuaded not to proceed with an increased APD that discriminated unfairly against Australia, New Zealand, the Caribbean, Singapore, South Africa among others.
The tax sparked a moment of unity between rival international airlines last month with Easyjet, Ryanair, Virgin Atlantic and IAG chiefs signing a joint letter slamming the increase.
In the letter the group said the government's consultation on APD was "a sham and a waste of taxpayers' money".
Key said APD will continue to be an issue and he will raise it at every opportunity.
The APD changes will for the first time be extended to private business jets.
Tourism industry condemns increase
Meanwhile, the Tourism and Transport Forum Australia has called on the Australian and New Zealand Prime Ministers to raise the increased in departure tax with the British government.
"We're urging Prime Ministers Gillard and Key to raise our concerns directly with British Prime Minister David Cameron," said TTF Chief Executive John Lee.
"The Air Passenger Duty (APD) is a discriminatory, arbitrary tax which impedes tourism, travel, trade and economic growth."
This will be the fourth APD rise since 2007 and now takes the tax paid by an ordinary British traveller to more than $A140, said Lee.
"It unfairly penalises British residents wishing to visit long-haul destinations like Australia and New Zealand, as well as impacting visitors to Britain from long-haul source markets.
"It's a tax on tourism which reaps billions of pounds in revenue for the British government masquerading as environmental policy."
Tourism Industry Association New Zealand CEO Tim Cossar said the latest rise is an unfair burden on long-haul tourism.
"The UK already has the highest departure tax in the world and this latest rise means a family of four will pay more than $NZ736 in taxes just to leave the country," Cossar said.
"It will simply price more potential visitors to Australia and New Zealand out of the market."
Poor economic conditions in Europe are already affecting
consumer confidence and reducing the likelihood of people to take a
long-haul holiday, so now is not the time to introduce another
barrier, Cossar said.
