Should Kiwi shoppers pay surcharges?

  • Opinion
  • October 3, 2017
  • Paul Keane
Should Kiwi shoppers pay surcharges?

I have been overseas for the past couple of weeks in the USA. In that time we have had a general election in New Zealand and to date we still don't as a result have a government. In some ways, it’s a little like the USA 2016 elections in that the party with the majority of the vote don't actually win!! It’s very odd. Certainly in the USA there is a high level of frustration and confusion amongst the populace, and I suspect that racial issues are still bubbling away at the surface.

However, the purpose of this week’s commentary is not about political comparisons but rather the purchase and cost of goods.

In New Zealand we seem to have a reluctance to add costs to achieve revenue, an example is the improvement to traffic issues through the collection of surcharges. This is certainly an Auckland focus. Not so elsewhere and particularly in the USA. There is nowhere in that great country where the consumer can escape the cost of tax and other charges on purchases. An example is a couple of drinks that attract a cost of $36.70, however tax is added at $3.25, plus government mandates of $1.47 total bill $41.42. It doesn't end there, you have to tip!! At the bottom of the bill a notation is listed highlighting what the tipping amounts can be, based on 15, 18, or 22 percent. Add the tip and the total sum can be upwards of $50.

This applies across the board, and adds incredibly to the actual listed total cost of the goods or services. It is an interesting society in that the dollar literally rules. The basic wage is low and the consumer supports the national wage through tipping.

We can learn from this experience.

The average consumer simply, has no option than to suck up the cost of goods and services. When we as individuals travel we accept the countries we visit for what they are and as a result accept the conditions under which they operate. Conversely we should be less afraid of charging our visitors to help improve our domestic facilities. The proposed tourist charge to our international visitors will be a drop in the bucket and much less that the costs we face overseas by comparison. Certainly in my view, we have nothing to be concerned about compared to other like environments in other countries.

 Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. This post originally appeared on RCG's blog.

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