The hotel industry is hitting back at the introduction of Auckland council’s controversial accommodation targeted rate by initiating a judicial review.
It is understood that the council has been informed of the proceeding that is set to get underway in the near term.
A statement in Millennium & Copthorne Hotels New Zealand annual results released this morning said: “In July 2017, Auckland Council narrowly voted to introduce a controversial targeted rate on a selection of accommodation providers.
“This discriminatory form of tax by the Auckland Council, now implemented, has garnered strong opposition from the accommodation industry in Auckland who intend to initiate a judicial review of the Council’s targeted rate in 2018.”
A judicial review proceeding involves a High Court judge being appointed to review the actions or decision of public or private administrative body to see whether they acted within the powers given to them by the law.
The process is being driven by a group of leading hoteliers, spearheaded by CP Group’s Terry Ngan, who are working together on behalf of the accommodation sector.
Auckland mayor Phil Goff proposed the tax based on the capital values of Auckland hotels, motels and B&Bs last year as part of council plan to raise around $30m.
The move, which in some cases was forecast to result in a 300% rates increase, was fiercely opposed by the accommodation and tourism industry, however Auckland Council’s finance committee voted 11-8 in favour of adopting the surcharge in July.
Following the vote, TIA chief executive Chris Roberts said the targeted rate proposal was based on “bad information and a poor understanding” of how the visitor economy works adding there were also unanswered questions over whether it met relevant legislation.
It had previously declared the targeted rate “illegal” after receiving a legal opinion from law firm Lane Neave that advised that adding a surcharge to guests’ bills to cover the costs of the proposed rates increases potentially breaches two sets of legislation.
These comprised the Fair Trading Act and the Commerce Act according to advice from Lane Neave Lawyers.