Tourism Minister Kelvin Davis has defended the $6 million cut to the country's visitor marketing agency, saying that New Zealanders would rather see the money spent on social services.
Tourism New Zealand's funding has been cut from $117.3m a year to 111.4m for the coming 12 months.
The move has been attacked as short-sighted by a tourism industry group but Davis said it was a question of priorities.
''If we were to ask New Zealanders if we should spend $5.9 million on bringing more visitors to New Zealand or spending on housing, health and education I'm sure they would say spend it on the latter not the former.''
He said he was ''more than confident'' Tourism New Zealand (TNZ) could do its job by reprioritising.
TNZ chief executive Stephen England-Hall said the budget reduction would be "absorbed" without the need to exit any markets or sectors.
The organisation, which is nearing the end of an internal review, would revisit its draft plans for the next financial year and make minor adjustments to reflect the changes.
"I have no doubt that we will be able to continue to deliver to our priorities including our new streams of work including helping ensure New Zealand is destination ready."
Budget documents showed the bulk of the saving would come from funding to bring in third parties such as media, opinion leaders and broadcast production.
TNZ got a big boost from former Tourism Minister Sir John Key five years ago to target a wider range of countries and higher-spending tourists.
Tourism Industry Aotearoa chief executive Chris Roberts said cutting TNZ's funding was short-sighted and would end up costing the economy through lost export earnings.
"International travellers have an enormous range of destination choices, and we
must be able to maintain and build our presence in our key markets."
Within TNZ's allocation, the biggest cuts are to the marketing and promotional
"TNZ is a very effective marketing organisation. Its funding must be seen as an
investment, not a cost," Roberts said.
"Reducing your marketing spend when it has proved successful is bad business.
Destination marketing influences travel decisions next year, the year after and
the years after that. Even this small cut could hurt New Zealand's efforts to
retain its share of global tourism."
Davis said with 5.1 million tourists forecast by 2024, the priority was destination management not marketing.
''We've got to make sure that when they get here they have the facilities and infrastructure and everything out in the regions so our visitors have a decent experience,'' he said.
''There's no point having more visitors and we're not prepared to cater for them and they have a rubbish experience.''
The Government had already allocated $35m to tourism projects from the $1 billion-a-year Provincial Growth Fund, and more was likely. The $25m-a-year infrastructure fund was still in place.
Overseas visitors spent about $14.5b in the past year.