Tourism sector failed by Budget and by Davis

Tourism Minister Kelvin Davis had 50 days to come up with a plan. And he fell short, again. Go hard and fast – it worked on saving the country from being overwhelmed by Covid-19. But when it comes to its biggest export earner, tourism, slow and lacking detail seems to be the approach. We’re not cooking the golden goose – we’re sitting here watching it being deep-fried.

In 2019 BC (Before Covid) tourism injected $112 million a day into our economy. And yesterday, the Government announced the equivalent of four days’ worth of tourism spending as its targeted lifeline – a $400m rescue package.

Let’s cover what’s been done well: the wage subsidy was quick, easy and essential to get tourism businesses through. The eightweek extension, announced in the Budget, will be welcome by all – but falls far short of the six months some had hoped for.

Now, let’s face the stark reality. This was D-day for many tourism operators; some were waiting until Budget day to decide if they would continue to operate.

So let’s look at the Budget, through the eyes of a tourism operator.

I now have a wage subsidy extension – which will end in August, in the middle of a cold offpeak winter. The big hope is the $400m targeted tourism recovery fund.

OK, sounds promising – could this help me? Well, who knows – because the minister’s gushing press release is devoid of much meaningful detail. It promises $400m spent on things like a Strategic Tourism Assets Protection Programme.

This is Davis’ explanation in full: ‘‘Some of our key tourism assets, in the form of attractions and amenities, play a vital part in our domestic tourism offering and our international brand as a tourist destination.

‘‘Some of these are at risk due to the effects of Covid-19 and if lost, could slow down either the national or regional recoveries, and have a major impact on some communities. This fund will identify those strategic assets and provide them with the protection and assistance they need so they will not be lost.’’

Who on Earth knows if this will apply to them? Is it going to give businesses money? Or loan? How much will it fund? Who can apply for it? Who’ll decide what’s a key tourism asset? When will the funding be available and over what period? Will there be a cap? Will everyone get a slice of the pie?

Then there’s the Tourism Transitions Programme, explained in Davis’ release with a similar lack of detail: ‘‘This programme will deliver advice and support for either pivoting a business towards the domestic and Australian market, hibernating a firm, or other options.’’

Is that financial support? Web support? Brochures? How much is being put aside for this? When can I access money to hibernate? Is money even available?

Davis, you had 50 days to work this out. Sure, you didn’t know how much Finance Minister Grant Robertson was going to give you, but you sure as heck should have been working through the details so that, when you got a figure, you had a detailed framework in place and industry could have certainty.

On Tuesday, as tourism businesses told the parliamentary Epidemic Response Committee of their desperate plights, Davis beamed in from his Beehive office and refused to provide any detail on a rescue package, saying it would be revealed in the Budget.

Well, yesterday was Budget day – and we don’t have meaningful detail.

Compare that to the media rescue package, where Broadcasting, Communications and Digital Media Minister Kris Faafoi had the plan laid out three weeks ago for his $50m spend.

There was lots of detail to chew over. And for non-broadcasters, the rescue package was underwhelming. That’s the thing about these rescue packages: they won’t be the saving grace for everyone. And tourism businesses need to know how it will work for them right now.

The sad reality is we have one of the most innovative tourism sectors in the world, but this package didn’t reflect that innovation. Could we work on incentives to get people travelling – that would help save the sector and provide GST to the Government by way of spending? It’d be a win-win.

A brutal subtext of all this is that many tourism businesses will need to collapse. We likely have too many hotels, motels, backpackers, tour operators, helicopter companies etc for the post-Covid world.

But that doesn’t excuse the lack of a plan; $400m is great, but the Government could have announced that weeks ago. What really matters is how that money will be spent.

I wrote last week that we needed a new tourism minister, because Davis didn’t have a plan.

The criticism continued, with a senior industry member saying of a webinars the minister has talked up: ‘‘It was awful. He’s a nice guy, but he’s totally out of his depth.’’

Yesterday wasn’t just a make or break day for tourism businesses. It was for the tourism minister too.

Yesterday wasn’t just a make or break day for tourism businesses. It was for the minister too.