LGNZ supports call for tourism GST to be reinvested in the regions

Local Government New Zealand supports Tourism Industry Aotearoa’s (TIA) call for the Government to release more GST collected from tourism growth to the regions.

TIA is calling on the Government to reinvest some of the massive tax windfall it has received from the tourism boom to ensure the long-term sustainability of the industry.

LGNZ President Lawrence Yule says providing tourism infrastructure so New Zealand regions can meet visitor expectations is a big issue facing some local councils. Funding necessary infrastructure, like toilets and carparks for freedom campers, is a challenge especially for smaller communities with a limited ratepayer base.

LGNZ has long advocated for a review of funding mechanisms for tourism and while the Government’s establishment of the Regional Mid-sized Tourism Facilities Grant Fund this year is welcome, long-term more substantial and sustainable funding is needed to support tourism infrastructure.

“The $12 million investment over four years is a good start but we have concerns the Fund will only make a small contribution to the sector’s tourist infrastructure related needs and more money will be required,” Mr Yule says.

“Currently the Government is reaping all the rewards of a booming tourism sector through GST from tourist spending. Some local economies benefit too, but the direct costs associated with tourism can overshadow the gains.

“We need to make sure tourism is a well-managed and resourced industry and that local communities are not disproportionately burdened with the cost of maintaining infrastructure and dealing with huge influxes of people.”

To better understand the future pressures on infrastructure provision in areas of high tourist volume LGNZ has partnered with TIA to undertake research to build a picture of current and future infrastructure requirements for the tourism industry. A second piece of work being led by private sector interests is also looking at a range of potential options to collect and allocate funding for necessary public tourism infrastructure.

New Zealand’s ability to maintain the levels of growth in tourism numbers in a sustainable way will require a collaborative effort by local and central government, and the tourism sector.

“The issues surrounding funding and provision of the necessary infrastructure needs resolution,” Mr Yule says.

“Solutions will require innovative approaches and the proposed release of the growing revenue from increasing tourism numbers to fund infrastructure should be further examined.”

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