Bennett rejects councils’ tourism infrastructure funding list

Deputy Prime Minister & Tourism Minister Paula Bennett thanked Local Government NZ yesterday for its $1.4 billion tourism wish list, but said she “rejects that most of these should be funded by Government”.

Local Government revealed details on Tuesday of a survey commissioned by Tourism Industry Aotearoa, which identified $1.4 billion of local infrastructure projects that might be useful in responding to ongoing tourism growth.

Mrs Bennett said: “I absolutely agree that there are some areas of tourism infrastructure that need to be addressed and that some of these will need help from central government. However, the list Local Government NZ has referenced includes things like town halls, council facilities, airport runway extensions, airport upgrades & expressways.

“These are either already funded by other areas of Government, are not considered a priority or should be funded by local councils. My priority is to support smaller councils with low rate bases with essential facilities. I am currently working with officials to establish how best to do this.

“Government is working with local councils to help with tourism infrastructure. Today we opened another round of the regional mid-sized tourism facilities grant fund of $5.5 million to help cofund things traditionally funded by local councils like public toilets, carparking facilities & freedom camping facilities. This comes on top of the $12 million announced in last year’s budget.

“I think most taxpayers would agree that restoring old council chambers is not a priority in terms of tourism infrastructure.”

Mrs Bennett said the Government “recognised the challenges that have come with growth in tourist numbers and are assisting where appropriate. With tourism now a $14.5 billion export earner, and 188,000 people working in the industry, these visitors are incredibly important to our economy, particularly in the regions.”

Local Government NZ says tourism needs well beyond communities’ resources

Local Government NZ said on Tuesday the survey of 47 councils revealed over 680 mixed-use infrastructure projects valued at $1.38 billion that were being developed.

Local Government NZ president Lawrence Yule said it was well beyond the resources of local communities to fund these projects, which included the development & ongoing operation of toilets, wastewater systems, carparks, access roads & wifi, and that a new funding mechanism was needed.

“The arguments for a new, sustainable way of funding infrastructure for tourism are undeniable. We just need to get on with it now, and these figures provided by just over half of our councils further illustrate the scale at which we need to act.

“There is much that could be done to protect & enhance the visitor experience, and provide some relief for our communities, many of which have a small ratepayer base. If we don’t act and with the right level of investment, we will be in no position to cope with the forecast growth of tourism – 4.5 million annual visitors by 2025. ‘Just in time’ infrastructure can mean ‘just too late’.”

For tourism, Mr Yule said: “Cofunding, with contributions from central government, councils & the industry in a way that allows for maintenance & operational costs, is required.”

He said the gst contribution from international visitors rose from $950 million in the March 2015 year to $1.5 billion in the March 2016 year.

Local Government NZ issued a discussion paper on funding in February 2015 and, last December, welcomed a report commissioned by the chief executives of Air NZ, Auckland International Airport Ltd, Christchurch Airport & Tourism Holdings Ltd on the tourism infrastructure gap.

That report called for the creation of a national tourism infrastructure levy which, between the industry and matching Government contributions, would generate $130 million/year to fund local tourism infrastructure needs.

Mr Yule said then: “The major issue for local government is ensuring that any new funding goes where it is really needed, which is not only on toilets, freedom camping facilities & carparks but also on major infrastructure like wastewater, which are some of the most costly pieces of work small communities are faced with.”

Local Government NZ funding review discussion paper, February 2015

Attribution: Ministerial releases, Local Government NZ.

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