The government increased the levy by $65, to $100 per international tourist, effective October 1 last year.
The Ministry of Business, Innovation and Employment previously estimated the additional IVL revenue would raise between $127 million and $173m annually.
On Thursday, LGNZ president Sam Broughton called for the government to distribute the additional $65 per tourist to councils, which needed the money to accelerate investment in mixed-use infrastructure, such as pipes, roads and transport.
It came after a New Zealand Herald report uncovered the government’s intention to use the IVL revenue to subsidise Crown funding — it initially said the money would be adding to what was spent in the tourism and conservation sectors.
"New Zealand continues to experience increasing numbers of international visitors. This growth in visitor volume has challenged New Zealand’s basic infrastructure, environment and the social licence for tourism to operate in certain areas," Mr Broughton said.
"It’s disappointing to see the government has chosen to impose an extra tax on international visitors to improve the government’s budget."
Mr Lewers said, reading between the lines, he had anticipated IVL revenue would be used to shore up the government’s financials.
"Now that it’s been officially announced, it’s no real surprise. It’s just disappointing."
However, for many councils in the country, tourism was a very small part of their economy, unlike the Queenstown Lakes district.
Mr Lewers said about 30% of investment into services in the district — designed for peak-day populations — was attributed to visitors, but the tab continued to be picked up by ratepayers.
"It will get to a point where it will become unsustainable [for them].
"If the IVL was actually going to be used ... to promote and generate the best yields out of international visitation ... that should be directed at councils that give the most tourism benefit to tourism GDP, and the Queenstown Lakes is the number one district that does that for this country.
"... as I’ve communicated to LGNZ previously, I think it’s outside what they should be concentrating on, and that’s probably as politely as I can say it."
