KI Traveller's Levy Economic Impact Assessment - Kangaroo Island ...

Commercial-in-Confidence
KI Traveller’s Levy
Impact Assessment
5. ADMINISTRATION AND IMPLEMENTATION
To this point in the study, the report has analysed a potential Traveller’s Levy without close
consideration of how it might actually be administered and collected. Drawing on the
desktop research undertaken as part of this study, and in particular, consultation with key
stakeholders, this section discusses the logistical and practical issues surrounding a levy’s
potential introduction.
5.1 HOW WOULD A LEVY BE CHARGED AND COLLECTED
The method employed for charging and collecting a levy would be one of the factors critical
to ensuring its cost-effectiveness and efficiency. The greater the extent to which it can
integrate into existing charging and pricing mechanisms, the greater its administrative
simplicity and the lower the burden of compliance. Given the magnitude of revenue involved,
dedicated fee structures or collection mechanisms would simply be too costly to administer.
The method of administration and collection also hinges heavily on Council’s capacity to
introduce regulation mandating that operators charge and collect the Levy as specified by
Council. This issue is noted but not analysed here and would need to be subject to a
subsequent, dedicated investigation.
With these points in mind, and given the discussion of the economics of a Traveller’s Levy
(Section 2), it would seem there are three broad options for administering and collecting a
Traveller’s Levy: a direct charge; an indirect charge via landing and wharfage fees; or a pervehicle
charge. Though the legal incidence of a levy would differ in each of these cases, the
economic incidence would be similar. This subsection overviews the merits and feasibility of
each of these options.
Option 1: Direct charging
With participation from SeaLink and the airlines, one possible method of collection would be
to integrate a levy into existing fee structures as a direct, per-passenger charge set by
Council. In the case of ferry travellers, this would allow for a myriad of options including
exemptions for residents or children and family passes. However, as the airlines’ charge is
simply a per-seat fare, the scope to differentiate between travellers who commute by air
would be minimal, if at all. Indeed only a flat, per-passenger levy applicable to all air
travellers would appear feasible. Given the importance of neutrality between the alternative
modes of travel, this would suggest a flat, per-passenger charge for all ferry and air travellers
as the only option for a direct charge.
The Levy could be collected as part of fare revenue and remitted to Council periodically,
making collection and administration an inexpensive activity. Provided data were collected
independently, visitor numbers would provide Council with a simple cross-check, ensuring
compliance and enforcement are similarly straightforward.
Option 2: Indirect charging
In light of the potential obstacles to the introduction of a direct charge (discussed in greater
detail below), the alternative mechanism for levying a fee on commuters would be to collect a
Levy from travellers indirectly though wharfage and landing charges. For ferry passengers,
this would mean estimating projected visitation for the forthcoming year and increasing
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