Local councils play an important part in the visitor experience through the investment they make in infrastructure, e.g. roads, water/waste disposal, broadband, attractions and events. But many councils are cash-strapped and need a helping hand.
TIA has long been advocating for greater investment to support and manage tourism growth. In 2016, we engaged Deloittes to undertake a National Tourism Infrastructure Assessment. This highlighted historic under-investment in ‘local and mixed use’ infrastructure – which is used by locals and visitors alike and is generally provided by local councils.
Central government funding
The previous Government responded to TIA's National Tourism Infrastructure Assessment with the $100m Tourism Infrastructure Fund that councils can access. The Tourism Infrastructure Fund Panel (including TIA Chief Executive Chris Roberts and TIA board member Kauahi Ngapora) met on 22 May 2019 to consider applications for Round 3 of the TIF. Round 4 opened on 1 August 2019.
The Provincial Growth Fund is also supporting numerous regional tourism projects.
The new International Visitor Levy is to be introduced in the second half of 2019, with the estimated $80m a year it will raise to be split between tourism and conservation. TIA has provided feedback to the Ministry of Business, Innovation & Employment's Tourism Unit on how the IVL funds should be spent. The final IVL investment plan will require approval by the Ministers of Tourism, Finance and Economic Development with an announcement expected in October.
A fair and practical regional tourism funding model is being advanced
The pressure on underfunded regional infrastructure continues to be a major risk to tourism’s social licence to operate.
In response to calls for local councils to be able to impose their own visitor taxes, TIA has said that any new regional funding models need to be fair and applicable nationally. Ad hoc taxes on visitors or tourism businesses at a local level are undesirable. We have also said that no final decisions on visitor taxes should be made until the outcome of the Productivity Commission’s much broader inquiry into local government funding and financing is known.
This stance is reflected in our submission to the Productivity Commission.
The Productivity Commission’s final report to the Government is not due until November 2019.
TIA has also shared our policy on regional tourism funding with the Mayors and Chief Executives of 76 councils, providing details on how much their region would receive based on our proposed distribution system.
TIA has also briefed Ministers, Opposition MPs and government officials on the funding model, including the Ministers of Tourism and Finance, and the MBIE Tourism Unit.
We know that identifying a local government funding solution that has broad support is no easy task but it’s important that the tourism industry plays its part in solving the problem.