Call for compromise on $4.5m short stay levy

Holiday makers spend about $60.5 million a year on short-stay accommodation alone in the greater south-west region which puts the state government's proposed levy revenue at $4.5 million.

But state opposition housing spokesman and Polwarth MP Richard Riordan said he believed the figure would be higher with the Great Ocean Road region and Mornington Peninsula having the bulk of the state's short-stay accommodation places.

"It's a tax and grab from regional Victoria. This is just millions less that will be spent locally," he said.

"Over 50 per cent of the tax is coming from the country with only a small percentage guarantee of it coming back."

While the government's website says 25 per cent of the levy will flow into regional areas, almost half of the 36,000 short-stay accommodation places were in regional Victoria.

Revenue raised from the levy would be redirected into providing affordable housing but when it was first announced Warrnambool's mayor Debbie Arnott called for more of that revenue to flow back to regional areas.

South-west operators have labelled the levy a kick in the guts, and there have been calls for a compromise on the tax they say is "too high".

Mr Riordan said investment property owners were going to be in for a shock when they started receiving land tax bills as well.

"The increase in tax on homes and housing that will not be coming back to country Victoria is outrageous," he said.

Mr Riordan said in places like Timboon, Cobden and Camperdown there was vacant land that hadn't been built on for a variety of reasons which now faced a tax bill because no one wanted to build houses on them.

He said the measures would not solve the housing crisis. "It's not making homes cheaper for people it's going to make homes more expensive," he said.

This week The Greens threatened to withdraw support for the short-stay levy in state parliament unless the government did more to secure housing.

Mr Riordan also said a high court ruling that this week put a stop to the state government's electric vehicle levy could have implications for the short-stay tax.

A study commissioned before the COVID-19 pandemic in 2019 found direct revenue from the western tourism region of Victoria - the state's most profitable - which includes Warrnambool, Port Fairy and Portland, was $60.5 million.

More traditional accommodation brought in $70.5 million.

The AICL Allen Report found short-term rental accommodation supported close to 1000 jobs in the region - which stretches from the South Australian border to the outskirts of Geelong - and underpinned additional tourism expenditure of $157 million.

Stayz corporate affairs director Eacham Curry, who addressed the Victorian Parliament's upper house standing committee which was conducting an inquiry into the issue, said the new levy might stop people short-term letting their properties but it wouldn't turn them into long-term rentals.

"In lots of cases these places are also their holiday homes. They're just going to sit vacant," he said.

Mr Curry said the proposed 7.5 per cent was "pretty high".

He said it was advocating for a something similar to Queenstown, New Zealand, where a tourist accommodation levy applies to all accommodation.

Mr Curry said a code of conduct to regulate behaviour and a register to collect the data and inform better policy should be developed first before a levy was introduced.

Airbnb country manager of Australia and New Zealand Susan Wheeldon said the proposal would create an uneven playing field.

She said Airbnb supported tourism taxes but the proposed 7.5 per cent levy was too high and would slug travellers' hip pockets when they could least afford it.

"A contribution of three to five per cent across all accommodation providers will raise more but cost travellers less," Ms Wheeldon said.

"The levy will apply only to short-term rental accommodation, creating an uneven playing field that puts everyday Victorians who share their home behind large corporate hotel chains.

"A tax that unfairly benefits the hotel industry over everyday Victorians is not the right approach."

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