MBIE moots “more substantial visitor levy” in minister’s briefing

A new long-term funding model to support New Zealand’s growing tourism industry, including increasing the border levy and possible institutional changes, has been mooted by the Ministry of Business, Innovation and Employment.

In a briefing to the new tourism minister, Kelvin Davis, MBIE says it is not clear whether the current “modest” mechanisms for funding are sufficient to catch-up with booming tourism numbers in recent years.

It suggests a “substantial visitor levy” might be needed to address the significant pressure on infrastructure as more international visitors come to New Zealand.

In the year to August, international visitor numbers hit 3.67m – up 9% on the previous year – and are forecast to forecast to reach 5m by 2023.

The briefing document states: “At this stage, it is not clear whether short‐term and modest interventions (i.e. in the order of tens of millions of dollars, like the Tourism Infrastructure Fund, or other funding mechanisms such as a targeted visitor levy) will be sufficient to enable the system to catch‐up with growth.”

“If there is sustained high visitor growth over the long term, more structural/institutional changes may be needed to put the sector on a sustainable footing (e.g. a long‐term or more substantial visitor levy).”

In order to come up with the right funding model, MBIE says it is looking at who pays for tourism and who receives the benefits and the role of both local and central government.

The 34-page briefing paper also highlights social licence as an issue, with possible changes to freedom camping put on the table.

It states that given the pressure freedom camping places on some communities and the complex and varied bylaws governing it in different regions, “there may be a need to consider the role that freedom camping plays in New Zealand’s tourism and recreation offering”.

The Department of Internal Affairs is leading a programme of work to address issues caused by freedom camping and this “includes the development of a national geospatial dataset to provide a single source of information about freedom camping rules,” says  MBIE.

More broadly, the briefing paper notes the importance of increasing New Zealanders’ understanding of the direct and indirect benefits tourism brings, and in doing so, help retain their support of the sector.

In order for the industry to continue to deliver benefits and that the sector is socially, environmentally, and economically sustainable, MBIE highlights four key issues:

  1. Are government and communities generating sufficient revenue to cover the costs of tourism?

2. Are government funding and regulatory systems fit for purpose in the face of visitor growth?

3. How do we ensure that tourism flows across regions support inclusive and sustainable growth?

4. How can the sector continue to enjoy the support of the majority of New Zealanders?

MBIE says that the Tourism Chief Executives’ Group, a pan-department government body, has requested that a cross‐agency communications group develop a social licence communications plan in May 2017.

The plan includes messaging about work currently underway to address issues that may be causing some concern in New Zealand communities where tourism growth is strong.

The Tourism CE Group is also looking at “developing a shared long‐term vision across government for the tourism sector, including what success could look like by 2050 for both the government and the sector”.

The objective is to create a visionary ‘statement’ that paints a picture of the future of tourism in the country and why this matters to New Zealanders and international visitors.

“The purpose of the vision for 2050 is to act as a signpost for CEs when developing their tourism‐related future priorities and work programmes,” says MBIE.

Tourism New Zealand is leading the project and has contracted Auckland-based brand agency Designworks to deliver the product.

Funding for tourism was $175.5m for 2017/18 with Tourism New Zealand receiving $117.4m and non-departmental expenses, which includes funding for programmes such as the Tourism Infrastructure Fund and Tourism Facilities Fund, receiving $50.8m.

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