Sunday, March 7, 2010

Our View on GST Increase , Its Silly

We are very concerned about a potential increase in the rate of GST.

As a tourist operator and employer in a small business we have already set our rates until Oct 2011. These rates are published overseas and cannot be changed. These are written contracts we have made with international inbound agents.

We have not lifted our rates in real terms since 2008 because of the international situation. We have also provided our staff with regular wage increases and have worn the cost of increased charges for services provided such as post, internet, phone, electricity and other utilities.

We do not see any way of increasing our prices for the FIT traveller as hotels are reducing their rates and the market is extremely competitive. It is well known in the industry that in the last twelve months many operators have left or are planning to exit the industry.

We are appreciative of the efforts the government has made in providing funding for Tourism New Zealand for international marketing but the ability of the industry to sustain an increase in gst is doubtful.

We support the position of TIANZ which has also raised concerns about raising gst. Everyone we have spoken to in the last few days also supports the TIANZ position.

We believe that if gst goes up our staff will have expectations of wage increases to cover their extra costs. We also believe the Reserve Bank will lift interest rates next year which will not only affect our bottom line but coupled with an increase in gst will be inflationary.

Yours sincerely,
Sally James & Gerard Hill