New Zealand tourism leaders propose a new NZ$130m fund for tourism infrastructure
The report released today is the result of work commissioned by the chief executives of Air New Zealand, Auckland Airport, Christchurch Airport and Tourism Holdings Limited. It is intended to be an input into the government policy process and to provoke a conversation between the tourism industry, local and central government on investment in public tourism infrastructure such as car parks, sanitation and visitor facilities.
“This work is a great example of industry leaders working together to create a national and targeted tourism infrastructure funding mechanism to ensure the long term sustainable growth of tourism,” said Christopher Luxon, Air New Zealand CEO.
Tourism is New Zealand’s largest industry, and growing fast. While growth presents huge opportunities for New Zealand communities the challenges that come with growth need to be well managed and the tourism industry is committed to being part of the solution.
“As the tourism industry grows it’s important that local public infrastructure keeps pace but we also need to be realistic about the ability of some local communities to fund the ongoing investment required,” said Malcolm Johns, Christchurch International Airport CEO.
“Rapid tourism growth over recent years means there’s already a local tourism infrastructure deficit in parts of New Zealand, especially in regions with low numbers of rate paying residents and high visitor numbers.”
Adrian Littlewood, Auckland Airport CEO says it is the right time to be focused on positioning New Zealand “to get ahead of the game and sustain the growth into the future”.
The report suggests that government and industry can work together nationally to create a fund to address the tourism infrastructure deficit. In particular the report highlights that the government benefits significantly from the tourism industry, not least from the estimated NZ$2.8 billion in GST that tourists pay every year, and should invest alongside the tourism industry if the industry is prepared to contribute to a ring fenced and highly targeted fund to improve local tourism infrastructure.
The report proposes that a National Tourism Infrastructure Levy be created comprising of a 2 per cent national bed levy across the accommodation sector and a NZ$5 increase to the border levy which would raise NZ$65 million per annum from the industry. Matching funds from the government would bring this to NZ$130 million per annum to fund local tourism infrastructure needs. It also recommends that the fund have a formal review every five years to ensure the funds are being appropriately applied.
The proposal from the tourism industry leaders has been carefully designed to avoid the problems observed overseas, like with the Australian Passenger Movement Charge, where tourism taxes are used for general revenue purposes and disconnected from tourism.
“By working together, industry and government could establish an independent entity that would bring greater discipline and commercial rigor to investment decisions than any of us could achieve on our own,” said Grant Webster, Tourism Holdings Ltd CEO.