Sunday Star-Times

Falling short Tourism fund disappoint­s

The tourist boom comes at a cost for some, reports Amanda Cropp.

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The Government’s tourism infrastruc­ture funding is again copping criticism, with the revelation that its first round of grants fell $10million short.

Last month, the Ministry of Business Innovation and Employment announced 13 grants worth $2.6m - mostly for toilet blocks - from an annual fund of $3m.

But in a just released Official Informatio­n Act response to the Green Party, the ministry says it has received 40 funding applicatio­ns valued at $12.7 million in total.

Green Party leader James Shaw, says the fact the regional tourism fund is so heavily oversubscr­ibed proves the Government has to move faster to relieve the financial strain on small communitie­s struggling to cope with visitor growth.

Confirmati­on of the high demand for assistance comes just days after the release of a tourism infrastruc­ture report which suggests new ways of squeezing more money from tourists without making them squeal.

Internatio­nal consultant­s McKinsey and Company, were commission­ed to prepare the report on funding options by the chief executives of Air New Zealand, Christchur­ch and Auckland airports, and Tourism Holdings (owner of the country’s largest rental campervan fleet).

The aim is to raise $130m annually, with the tourism industry and the government contributi­ng equally to a fund for roading, water supplies, sewage schemes and other public facilities used by both New Zealanders and overseas visitors.

The report suggests a 2 per cent bed tax, and a $5 increase in the departure levy would amount to less than 1 per cent of the average internatio­nal visitor spend of about $3,700.

Car parking charges for National Parks and popular scenic spots, and higher fees for flasher huts were among other options to help cover the Government’s $65m share of the new fund, along with a slice of the $2.8b it receives each year in GST from tourism.

Upping private enterprise in National Parks

Shaw wants a $14 to $18 increase in border charges to raise $20 million annually for tourism infrastruc­ture and $46 million for conservati­on projects.

However, he opposes the McKinsey report suggestion that a ‘‘private consortium’’ design, build, finance, operate and maintain our nine Great Walks with possible investment from the ACC and NZ Super Fund.

The Great Walks lost more than $3m in the last financial year, but Shaw says they should remain under the management of the Department of Conservati­on (DOC) or hapu and iwi to avoid becoming over-commercial­ised.

According to the report, DOC covers just five per cent of its costs on average through user pays, compared with about 20 per cent in Australian, US and Canadian national parks.

It recommends raising hut fees, albeit with subsidies for locals, and upgrading accommodat­ion with laundry facilities and free or ultra cheap Wi-Fi to justify price increases.

Tourism advisor Dave Bamford says 15 areas of the DOC estate were under pressure from tourism and in desperate need of financial and management help.Car parking charges were feasible, but might be impractica­l at remote locations.

‘‘Differenti­al charges for the use of huts seems to be a good thing, so if you are a New Zealander, you pay less.’’

He believes more privately owned lodges in places like Aoraki Mt Cook are worth investigat­ing, but is less enthused about other aspects of the report.

‘‘If they’re advocating for a privatisat­ion of the Great Walks, then that’s a really challengin­g thing to do and fraught with weaknesses.’’

Taxing beds

Although the industry is still digesting the McKinsey report, support is emerging for a national 2 per cent bed tax.

It would cover all accommodat­ion - hotels and motels, camper van rentals (worth $180m this year), Airbnb, camping grounds, and holiday homes regardless of whether guests were locals or internatio­nals.

Auckland mayor Phil Goff recently floated the idea of a visitor tax to raise up to $30 million to pay for city marketing and major events.

But Christchur­ch airport chief executive Malcolm Johns, is keen to avoid a plethora of different regional levies which would just confuse visitors who tend to tour much of the country.

‘‘We’re all in the same waka, so to speak, so it’s incumbent on us to ensure those regions that are under a lot of pressure from this growth get the assistance they need.

‘‘You (Auckland) can’t aspire to be the gateway of New Zealand and then somehow expect the rest of New Zealand to fund the pieces that make you the gateway.’’

Hospitalit­y New Zealand accommodat­ion manager Rachael Shadbolt, agrees different regional levies would be problemati­c and her organisati­on looks forward to further discussing the proposals with the government.

Airbnb has more than 20,000 listings here and already collects tourist taxes on behalf of government­s in some 200 cities and overseas jurisdicti­ons.

Local manager Sam McDonagh says it would work with the government if it choses to introduce a bed levy.

Trade Me runs the largest booking website for holiday houses and communicat­ions advisor Logan Mudge, says a tax would be difficult to administer because the majority of owners completed their rental transactio­ns off site.

While supporting the need to boost tourism infrastruc­ture ‘‘we’re yet to be convinced whether a bed tax is the best option.’’

Dishing out the dosh

Tourism Industry Aotearoa (TIA) chief executive Chris Roberts says it is important the money is ringfenced for tourism-related infrastruc­ture and not siphoned off for other purposes.

When it comes to allocating funds, the report proposes a new Crown agency, akin to the Crown Fibre Holdings model, with representa­tives from tourism, and central and local government.

Local Government New Zealand (LGNZ) chief executive Malcolm Alexander says that mixed membership would alleviate concerns about transparen­cy and fairness

‘‘Having an arm’s length entity with all the players at the table from a governance point of view is probably more likely to get better choices made, particular­ly when you have got trade offs.’’

At a tourism industry summit last month, Prime Minister and tourism minister John Key said he would consider the McKinsey report along with a TIA report on infrastruc­ture priorities due out early next year.

He conceded that with a million extra visitors expected by 2022, ‘‘doing nothing’’ was not an option.

Now that he will relinquish the tourism portfolio, the industry is hoping his successor agrees.

 ??  ?? Pressure on popular locations, such as Coromandel’s Cathedral Cove, is driving calls for a $130 million fund for tourism facilities.
Pressure on popular locations, such as Coromandel’s Cathedral Cove, is driving calls for a $130 million fund for tourism facilities.
 ?? CHRIS HUTCHING ?? Car park charges could help to pay for tourist facilities.
CHRIS HUTCHING Car park charges could help to pay for tourist facilities.

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