NERA’s role in CP Group v Auckland Council

The Situation

Auckland Council introduced a targeted rate on accommodation providers in the 2017/2018 fiscal year to fund certain expenditures of Auckland Tourism, Events and Economic Development. A group of accommodation providers brought judicial review proceedings challenging Auckland Council’s decision to introduce the targeted rate. 

NERA's Role

NERA Managing Director James Mellsop was asked by counsel of Auckland Council to review the basis for the Council’s decision to introduce the targeted rate and provide his view on the reasonableness or otherwise of the Council’s analysis, from an economic perspective. Mr. Mellsop also reviewed, commented, and provided expert evidence on the affidavit of an expert economic witness for the Applicants. In particular, Mr. Mellsop and his team analyzed the role of the targeted rate in addressing a “free riding” problem in destination marketing expenditures and whether the targeted rate as a fixed cost would be passed through by accommodation providers to visitors.

The Result

The High Court found in favor of Auckland Council, declining the application for judicial review.