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Home / Business / Companies / Tourism

Budget 2018: Why tourism is hoping to avoid a May surprise

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
6 May, 2018 12:09 AM4 mins to read

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Still from a Tourism NZ video featuring PM Jacinda Ardern and comedian Rhys Darby.

Still from a Tourism NZ video featuring PM Jacinda Ardern and comedian Rhys Darby.

Tourism businesses are hoping to avoid a ''May surprise'' in next week's budget at a time when the industry is consolidating record growth but still facing infrastructure pressure.

They are also eyeing the $1 billion Provincial Growth Fund as a way of boosting the industry, which vies with dairy as the country's top foreign exchange earner.

Tourism Aotearoa Industry chief executive Chris Roberts said a ''boring'' budget would suit him.

Three years ago the Government stunned the industry with a ''border clearance levy'' which imposed extra charges of up to $22 a traveller to cover processing costs.

Then Tourism Minister John Key had given no indication to the industry just days before at its showcase, Trenz, which will be held this week in Dunedin.

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''A boring budget suits us right now,'' Roberts said. "We're not looking for a handout, we're not looking for any sort of change, certainty is really important.''

And new Tourism Minister Kelvin Davis has indicated he may oblige, at least in the short term.

His Government is working on a new tourism levy but there is still another round of consultation to do in what is a complex area.

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''The problem is with that growth we haven't kept up with investment in infrastructure. — hence the discussion around a tourism levy. Work has been going on around it - we've had to decide who would have to pay the levy, who would be excluded, where is it collected, how it is collected and how much it should be,'' he said.

''We shouldn't be too far away from making announcements about the levy - everyone is going to wait and see.''

Opponents of another charge on tourists say deciding who would pay is complicated as many of the 3.8 million visitors are here on business or visiting friends and relatives and don't put so much pressure on the tourism infrastructure. Some local authorities are also pushing for their own local charges such as the bed tax in Auckland.

Tourism Aotearoa Industry chief executive Chris Roberts says a ''boring'' budget would suit him. Picture / Jason Oxenham.
Tourism Aotearoa Industry chief executive Chris Roberts says a ''boring'' budget would suit him. Picture / Jason Oxenham.

Roberts said it needed to be clear what the money would be spent on and there was a need for full consultation on a new tax.

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''Whether it's coming out of Queenstown with its needs or at a national level, the talk doesn't go away - we need a proper conversation about it.''

While the industry was wary of a new charge, it was relishing the potential for the Provincial Growth Fund to support tourism ventures.

''Our message to the tourism operators and to regions is to make the most of the opportunity and put your best foot forward — put your case together and get it before the growth fund.''

Davis said there had already been about $30 million in funding for tourism projects announced and more were on the way.

''The thing with the provincial growth fund and tourism is that they are highly interconnected. A lot of projects that are being looked at have a tourism slant on them. What we want to do is make sure the regions are supported,'' the minister said.

The Government spends $117 million a year funding international promotions agency Tourism New Zealand which was undergoing an internal review by consultants from PwC. Picture / Greg Bowker
The Government spends $117 million a year funding international promotions agency Tourism New Zealand which was undergoing an internal review by consultants from PwC. Picture / Greg Bowker

This government was continuing to fund the tourism infrastructure fund for toilets and carparks to about $25m a year over four years.

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It also spends $117m a year funding international promotions agency Tourism New Zealand which was undergoing an internal review by consultants from PwC.

Roberts said there could be a temptation to wind back the marketing budget with the high number of visitors. There were signs that growth would continue at a more manageable 4 per cent to 5 per cent a year rather than the recent double-digit growth.

''Marketing has a long-term impact over many years and it would be naive to stop marketing the country just because things are good now.''

Davis said Tourism NZ had done ''a fantastic job" and he was a big supporter of the 100% Pure campaign.

The new international digital campaign, #getNZonthemap, featuring Rhys Darby and Prime Minister Jacinda Ardern was another promotional strand.

''The Prime Minister is certainly someone who invites clicks you could say. If she's happy to be involved I'm more than happy for her to be front and centre.''

Tourism NZ said the video had attracted millions of views around the world in the first 48 hours and the next step was to spend in key markets to amplify it further.

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