A boy pulls a curtain closed in an inner-city isolation hotel in Melbourne, March 30, 2020. (Photo: WILLIAM WEST/AFP via Getty Images)
A boy pulls a curtain closed in an inner-city isolation hotel in Melbourne, March 30, 2020. (Photo: WILLIAM WEST/AFP via Getty Images)

PoliticsJuly 30, 2020

Everything you need to know about New Zealand’s new managed isolation fees

A boy pulls a curtain closed in an inner-city isolation hotel in Melbourne, March 30, 2020. (Photo: WILLIAM WEST/AFP via Getty Images)
A boy pulls a curtain closed in an inner-city isolation hotel in Melbourne, March 30, 2020. (Photo: WILLIAM WEST/AFP via Getty Images)

The government has finally announced plans to begin charging some New Zealanders returning to Aotearoa, but the list of exemptions will be long and the money raised won’t come close to covering the cost of managed-isolation.

What’s all this then?

As New Zealand settled into the freedoms of alert level one over the past two months, the idea of charging fees for managed isolation has become an increasingly hot topic. Covid-19 isn’t going anywhere and the sight of returnees spending a fortnight in swanky Auckland hotels on the public dime was turning into a problem. A few cases of people making a run for it, or complaining about the quality of the room service, didn’t exactly help.

Over the last couple of weeks, the government has debated charging nearly everyone arriving home or just a few. In the end it settled on a very limited system.

Who is going to be charged?

The business crowd and holidaymakers are the main target. If you’re in New Zealand right now and you plan to leave in the next few weeks for a getaway or business meeting you might want to look at your cancellation policy. The government won’t have much sympathy if you complain about the cost of coming back with a tan or a new business contact.

New Zealanders coming home for fewer than 90 days will also face the fees. There are some exemptions, but it rules out a quick visit for anyone who wants to attend, say, a wedding or a birthday. To escape the fee you pretty much need to be coming back to New Zealand with plans to live here, get a job and pay taxes.

Temporary visa holders will also be required to pay, unless they are critical workers or were ordinary residents of New Zealand before March 19. Based on current border restrictions, this category will probably apply mostly to partners of New Zealanders.

How much are we talking?

The government wants to charge $3,100 for the first adult in a room and $950 for an additional adult, with $475 for each child sharing the room. So a family of four sharing a single hotel room for 14 days would need to pay $5,000.

You said something about exemptions?

If you’re coming back for a funeral, or to see a family member who is dying, the government will consider making an exemption. Megan Woods, the minister in charge of the border facilities, also said there will be a mechanism to waive fees in full or partly for people facing financial hardship.

If you’re a partner or child of a New Zealander, returning with them to settle here, you won’t need to pay. Citizens deported to New Zealand won’t need to pay (we’re looking at you Australia). Diplomats and refugees will also be exempted. There will also be an exemption for people travelling here to attend the sentencing of the accused in the Christchurch mosque attack.

The vast majority of arrivals will still be able to undergo managed isolation or quarantine without paying. The government expects between 3 and 10% of those arriving will be charged.

When could the fees start?

In two or three weeks. The government is being a bit coy with the answer.

Legislation was tabled yesterday. Regulations need to be drafted and presented to cabinet. And the election is very quickly approaching. Expect fees to take effect in mid to late August.

There’s no exemption for me. Can I come to New Zealand before the fees kick in?

It’s possible, but not likely. Most airlines aren’t selling tickets to New Zealand until mid August. Once ticket sales reopen, the airlines can only sell as many tickets as there are places in managed isolation. That’s about 3,500 seats per week, or about nine Boeing 787s landing at Auckland Airport.

How much will the government make off this?

Not much. The treasury will pocket between $1.6 million and $8.2 million annually after the $600,000 cost of collecting the fees is removed. That’s the value of a nice house in Auckland or some architectural monstrosity on the Shore.

The government figured it would make about $125 million annually if it charged everyone coming back, but judged that the cost of collecting that sum would be about $33 million.

How much does the whole border system cost?

A lot. The government had committed $418 million for six months of managed isolation and quarantine, but projections now show it could run out of cash in October.

The system can handle about 14,000 returnees per month at 31 facilities around the country. The government has said it won’t be increasing that number much going forward. The cost of housing, feeding, guarding and testing each returnee has been estimated at between $4,000 and $6,500.

The whole system costs half a billion and we could collect less than $2 million, so why collect fees at all?

The government talks about fairness and equality. It’s concerned about an increasing number of people heading overseas for holidays or business trips in the coming months, and it wants to deter anyone who decides to leave in the middle of a global pandemic.

There’s also a pretty strong feeling in certain quarters that people going overseas should pay. National wants a universal system of fees, suggesting a belief that anyone overseas can either afford an expensive trip or has a fancy lawyer job in London.

But why couldn’t they charge everyone?

You need to read a bit between the lines, but the government said it got legal advice that a limited system only targeting a few returnees would be easier to defend in court. A widespread system, where everyone needs to pay, could violate the Bill of Rights.

Not everyone is happy about it. Deputy prime minister Winston Peters put out a fiery statement calling the new rules “dreadful public policy”. New Zealand First abstained, for only the second time in this government, to allow the rules to be approved by cabinet. Peters said after the election he’d seek to have fees applied to many more returnees.

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