Budget 2024 has been delivered by Finance Minister, Hon. Nicola Willis, on behalf of the coalition government. As well signalled, the Budget has a strong focus on cost-of-living relief, education, health and reducing crime.
A key feature is changes to tax levels that will increase the discretionary income of households.
Sobering economic indicators are also a feature of Budget 2024. As the country’s second biggest export earner, tourism makes an enormous contribution to Aotearoa New Zealand and its economy. The tourism industry is already back to the number two spot in terms of export earnings and the contribution we are making is both meaningful and needed.
We should also be very proud of the over 300,000 people that are directly or indirectly employed by tourism.
Tourism Industry Aotearoa (TIA) did not anticipate any significant tourism-related announcements in Budget 2024, the key tourism takeaways are:
Tourism New Zealand and key tourism functions
Government invests in tourism to ensure its important contribution to the economy is optimised. This investment is centred on the work of Tourism New Zealand (TNZ) to market New Zealand as a visitor destination and the policy work of the Ministry of Business, Innovation, and Employment (MBIE) to ensure tourism operates well within New Zealand. There is also funding for other programmes including events promotion and cycle trails.
Budget 2024 marks a transition from a period with both COVID-19 support initiatives and investment in tourism infrastructure and facilities. The end of these time-limited programmes was signalled in Budget 2023 and is not unexpected. With this change, the total tourism expenditure that the Minister of Tourism and Hospitality is responsible for in Budget 2024 is $152 million, compared to $218m in Budget 2023.
Our assessment of the tourism-specific spend in Budget 2024 across both Tourism and Hospitality and Economic Development portfolios is as follows:
- Promotion of New Zealand as visitor destination, Tourism New Zealand, $106m
- Tourism and Hospitality policy, data and programmes, $47.6m
- Major Events Development Fund, $11.4m
- New Zealand Cycle Trails, $8.0m (IVL funded)
- Regional events fund, $1.6m
The appropriation for TNZ has been reduced by 5% which is less than the Government’s overall 6.5-7.5% public sector budget reductions. TIA has been a strong advocate for appropriate investment in TNZ, and we are pleased to see that the $15m cut to TNZ’s budget for 2027 (made in 2023) has been reinstated, though the money will come from the International Conservation and Visitor Levy (IVL).
Funds generated by the IVL are estimated to be $144m and are largely additional to the tourism appropriations above, other than to fund New Zealand Cycle Trails and to restore the $15m to TNZ’s out-year budget.
The IVL funds are used to support a wide range of tourism and conservation activities that are mostly not specified in the Budget itself. Half of the IVL funds are available for tourism purposes administered by MBIE, and half for conservation administered by the Department of Conservation.
Consultation is currently open on changes to the IVL, and TIA will be making a detailed submission on the industry’s behalf on what we believe is an appropriate rate and how the money should be spent. To support the development of our submission, we’d value your views via this survey.
Diving into the detail
TIA will now dive into the budget detail and commentary. This includes unpicking the assumptions in the Budget about the IVL, the funding allocated for conservation, roading and transport, infrastructure, small business support and immigration including visa charges. There are also valuable signals of further investment in Te Matatini and in flood protection and resilience, which we are sure will be welcome news to those of you who experienced significant impacts from recent weather and flooding events.
Keep an eye on Te Aka Tāpoi for more information and analysis on the Budget.
