Southland's hospitality industry may have its annual alcohol licensing fees discount scrapped and additional bills raised despite the struggle it is facing.
When the Alcohol Licensing Fee-Setting Bylaw was last reviewed in 2015, the Southland District Council deemed it affordable to reduce annual fees by 30% as the council had a large reserve balance.
However, this is no longer the case and a deficit of $134,924 by June has been forecast.
As a result, councillors voted at their meeting last week to get rid of the discount and increase annual fees, application fees and special licences 10% for the years 2021-22 and 2022-23.
They will then be increased a further 5% in 2023-24 and 2025-26 in order to alleviate the deficit.
The reserve will be repaid over nine years, if the council continues to increase fees annually by 5% past the five-year period covered by the bylaw.
The cost for a premises considered to be paying very low annual alcohol licensing fees is $133 at present — this will increase to $177.
For a premises paying high fees of $1006, owners will end up paying $1581.
Cr Ebel Kremer questioned the timing of the change, citing the position the hospitality industry was in due to Covid-19.
"A lot of people are hurting out there," he said.
"That could be a nail in the coffin for some of our businesses out there."
The increase proposed would add even more pressure.
Cr George Harpur, who has experience in the hotel industry, sided with Cr Kremer.
"A little country hotel is facing $1000 in fees before they even open the door," Cr Harpur said.
He believed the extra costs would cause more businesses to close, Cr Harpur said.
While Southland Mayor Gary Tong acknowledged it would be difficult for owners, "the bucket" running the fund was getting too low.
"How long do we keep kicking the can on the road? ... Covid could be here next year too."
Cr Karyn Owen argued it would not be a large cost in the scheme of things and ratepayers should not be subsidising alcohol anyway.
Cr Julie Keast acknowledged it was a tough situation for the council and operators to be in.
However, something had to be done, she said.
Cr John Douglas said the proposal needed to go out for consultation to "provoke discussion" from the community and then brought back to the council and reassessed.
The draft bylaw consultation period has begun and will remain open until March 26.
