In 2001, Environment Southland became the only regional council in the country to get operators to agree to pay a marine fee when their ships visited Fiordland and Stewart Island.
About $1.8million is collected annually and the money is spent on items beneficial to both parties, such as navigational aids, Milford harbour control, a weather station and improved VHF radio coverage.
But from October last year, Fiordland has also been included in the list of New Zealand ports, meaning operators have also had to pay a MNZ levy of $3.09 per passenger each time their ships visit.
Mr O'Sullivan, who is also the Southland regional harbourmaster, said Cruise New Zealand, with the backing of Environment Southland, had been trying to get MNZ to remove the levy, on the basis cruise ships visiting Fiordland did not stop at a port with infrastructure but merely ''cruised through'' the fiords.
However, he said yesterday MNZ had ''made it clear'' the levy would not be removed.
Instead, a MNZ review group which he was part of was considering changing the charging formula for the levy from an amount per passenger to an amount based on ship tonnage.
''That would decrease the impact on cruise ship operators ... and would be fairer, we [Cruise New Zealand] think. Ships of equal size would be paying the same for entering ports.''
MNZ intended to put a levy review paper out for public consultation in November or December, Mr O'Sullivan said. That meant any changes, if agreed, would not happen until the 2016-17 cruise season.
''We would have liked it to happen sooner, but nothing is ever fast in the realms of central government.''
When the levy was first introduced, Mr O'Sullivan called it a ''potential killer'' for Fiordland's cruise industry.
However, he said yesterday the number of operators visiting Fiordland had not dropped as feared.
Predictions for the 2015-16 season were 84 visits, up eight on the 2014-15 season and 10 on 2013-14.
Nationally, cruise passenger numbers are forecast to increase by 33% over the 2014-15 season to 267,800, driven by larger ships and more vessels sailing from Auckland.
A Cruise New Zealand economic impact summary report released yesterday said the growth was calculated to support 10,354 jobs and inject $543million into the economy.
Mr O'Sullivan said Cruise New Zealand was also concerned about the impact of the the new Border Clearance Levy coming into force from January 1.
Some operators had advised they were considering relocating ships away from New Zealand as early as the 2017-18 season because of it.
Cruise New Zealand estimated the new tax could knock $85million off the wealth the cruise sector generated for New Zealand in 2018-19, resulting in 1629 fewer jobs, he said.
''We are hearing operators don't like the raft of charges they face in New Zealand. It is adding up for them and for passengers.''
Cruise New Zealand was trying to have the introduction of the levy pushed back a year, on the basis it was brought in without consultation, he said.
Sailing away
Southland cruise ship 2015-16 season by the numbers
84 visits
21 cruise ships
170,400 passengers
$9.4 million economic impact
245 Southland jobs supported
Source: Cruise New Zealand
