Local Government NZ says $12m for tourism infrastructure a 'good start' but more needed

Local Government NZ said the government's $12 million fund to help local authorities facing infrastructure stress from an influx of international visitors is a good start but not enough to provide what's needed.

Local government bodies can apply to the new Regional Mid-Sized Tourism Facilities Fund to access the $12 million over four years and Prime Minister John Key, who is also Tourism Minister, said they would need in many cases to match dollar for dollar any funding they receive.

LGNZ president Lawrence Yule said while the extra funding was a welcome boost, it would continue to advocate for more long-term and sustainable funding for tourism infrastructure.

"It will be important that visitors pay their fair share for use of facilities provided by councils to support New Zealand's successful tourism industry," Mr Yule said.

Asked whether $12 million is sufficient, given international visitors contribute over $900 million in goods and services tax a year, Mr Key said it was probably not enough long term. "It's a good starting point. Over time there is the potential to do more," he said.

The need to upgrade infrastructure in areas affected by the big upturn in international visitors has been identified as a key priority by the industry.

Most of the $12 million is likely to go on helping smaller communities build new toilets, signage and parking facilities to cope with freedom campers who caused problems in some popular tourism areas.

Mr Key said the government was open to discussing other ways of raising money from international visitors to spend on bigger infrastructure projects, with the issue having been under debate for some years. Stewart Island was allowed to impose a $5 visitor tax because of its small rating base and other countries have differential charging regimes for international visitors.

"It could potentially be quite a lot of money in which case it might be worth us considering if it was to give them a big lift in their infrastructure," he said.

But Key said the government would need to see any such measure had wide support and no negative impact.

Visitor numbers are forecast to rise to 4.5 million by 2022, which is equivalent to this country's current population.

Tourism Industry Aotearoa chief executive Chris Roberts, who is on the working group assessing the application process and funding criteria for the new fund, said the $12 million was a good start.

"If presented with enough sensible investments that provide a long-term return for New Zealand, there will be good reasons for government to look at adding to the initial funding," he said.

The government today also committed a further $8 million over four years to Tourism New Zealand to target key growth markets such as India and the US eastern seaboard.

"With strong economic growth prospects, India's potential as a source of visitors is high. And the highest number of visitors from India peak in May – one of our shoulder seasons," Mr Key said.

Tourism NZ chief executive Kevin Bowler said additional marketing activity will begin immediately in the US to capitalise on newly announced air services which are expected to result in a 30% increase in seats between the US and New Zealand. It is moving to spend all of its annual $80 million marketing budget on encouraging high-value tourists in the shoulder season, given capacity constraints at peak times in the tourism hotspots such as Queenstown.

Key announced additional investments in three new tourism projects – with $2.5 million for the development of new facilities at the New Zealand Maori Arts & Crafts Institute in Rotorua, over $1.2 million to Timber Trail Adventures for the development of a new 80-bed lodge on the Timber Trail cycleway and half a million dollars for the development of a new bungy launch system at Queenstown Bungy's Nevis site.

The prime minister said he's also due to make an announcement this weekend relating to new cycle trails in the South Island. The government has already spent $60 million on the New Zealand Cycle Trail which attracted 125,000 users in the month of January 2015 compared to 97,000 the year before.

(BusinessDesk)