Warning of mass airport security layoffs if funding not hashed out

Civil Aviation Authority price increases have had ministerial doubt cast over them for costing travellers and airports too much, after significant hikes to visa costs and a planned visitor levy rise.
Yesterday the Civil Aviation Authority opened consultation on changes to its fees, levies, and charges it says are necessary to prevent mass staff layoffs and prepare for the future.
The proposal includes a 146 percent increase to passenger safety levies, a 66 percent increase to the domestic passenger security levy, and a 72 percent increase to the international passenger security levy.
These changes will take the domestic security levy from $6.57 to $10.93 and the international security levy from $13.12 to $22.54. The passenger safety levy will rise to $3.94.
The current levies were set in 2017 and frozen through the pandemic. The authority says they no longer reflect the costs of its activities. The shortfall had been supported by Crown funding of almost $500 million since 2020.
But Transport Minister Simeon Brown has ruled out any more funding from July next year.
If no alternative funding system is in place when that funding ends, the Civil Aviation Authority would be faced with a deficit of $145.6m and a need to reduce its headcount by 788 employees.
This would include a 38 percent drop in the number of aviation security staff, which it said would lead to significant additional wait times, on top of hours-long delays already reported.
The funding proposal includes extra resourcing to meet sector and passenger expectations, including 193 frontline security staff, 34 certification and inspectorate staff, and 10 policy staff.
Though Brown concedes the rates need to change, he isn’t convinced the scale of the changes are fully justified and has requested a detailed review of the evidence to support the proposal.
“It is imperative that we explore every possible avenue for cost savings and efficiencies before passing additional costs onto the industry and travellers,” he told the Aviation Industry Association’s annual conference in a speech yesterday.
That is perhaps because the Government has already passed significant costs onto industry and travellers.
Earlier this month the Government released the outcome of its visa charges review, increasing the cost of visitor visas by 62 percent to $341 from October 1.
Tourists weren’t the only ones hit, with the cost of student visas doubling to $750, and skilled residence visas hiking from $4290 to $6450.
Immigration Minister Erica Stanford said the huge increases would generate more than $563m over four years, which appears to be substantially more than Immigration NZ’s forecast deficit.
The Cabinet papers on the visa pricing decision said there was no evidence presented by stakeholders that there could be tourism demand impacts from the fee increases, something NZ Airports chief executive Billie Moore took issue with. “That’s because airports and airlines were not consulted,” he said.
“The truth is that visitors will be turned off by paying over $300 just for their visa. Most Kiwis would be too, if they were in their shoes. And visitors have plenty of other choices for their travel, with most of our competitor countries focused on making themselves more attractive, rather than more expensive.”
These aren’t the only extra costs set to hit tourists and the aviation industry.
New Zealand’s international visitor levy, which funds conservation and tourism infrastructure, is up for review.
Currently set at $35, the tax was introduced under urgency by Labour in 2019, with National opposing it, saying it sent an “appalling” signal to international visitors.
Under the coalition Government and Tourism Minister Matt Doocey, the Ministry of Business, Innovation & Employment began consultation on lifting the levy as high as $100 earlier this month.
In May’s Budget, the Treasury said if the review landed on a midpoint, the Government could bring in $50m from the levy in 2025, rising to $70.6m between 2026 and 2028.
In contrast to statements in the visa pricing Cabinet paper, the consultation document said the impact of the levy couldn’t be considered in isolation.
“New Zealand is a premium and often expensive destination for many of our international markets, and any additional cost may impact our competitiveness against similar destinations,” the report said.
“There is a risk that increasing the international visitor levy too much could slow growth in travel demand for more price-sensitive markets, or lead to visitors spending less while in New Zealand.”
When that consultation document was released, someone entering New Zealand via Auckland Airport on a visitor visa would pay at least $318.86 in border charges and fees.
That visitor visa alone will be $341 from October. Assuming a midpoint of $70 for the visitor levy, that figure will increase to $411.
If the Civil Aviation Authority’s levy increases go through as planned and are passed on to customers in part or in totality, that number will tick higher still.