14 March 2017

Depth of tourism infrastructure needs revealed

The full extent of the infrastructure investment needed so communities can keep up with unprecedented tourism growth has been highlighted through a recent survey of local government.

The tourism boom New Zealand is currently experiencing is putting pressure on infrastructure used by both international visitors and local communities.

The March 2017 research involving 47 councils revealed there are over 680 mixed use infrastructure projects with a value of around $1.38 billion that are in development in one form or another.

Councils across the country were asked to identify infrastructure projects needed to support sustainable tourism growth.

Local Government New Zealand President Lawrence Yule says it is well beyond the resources of local communities to fund these projects, which include the development and ongoing operation of toilets, wastewater systems, car parks, access roads and wifi, and that a new funding mechanism is needed.

“The arguments for a new, sustainable way of funding infrastructure for tourism are undeniable,” Mr Yule says. “We just need to get on with it now and these figures provided by just over half of our councils further illustrate the scale at which we need to act.

“There is much that could be done to protect and enhance the visitor experience, and provide some relief for our communities, many of which have a small ratepayer base. If we don’t act and with the right level of investment, we will be in no position to cope with the forecast growth of tourism – 4.5 million annual visitors by 2025. ‘Just in time’ infrastructure can mean ‘just too late’.”

There are calls for relief from many parts of New Zealand. Auckland mayor Phil Goff has proposed an accommodation levy for his city, while Queenstown Lakes mayor Jim Boult sees the need for a visitor levy for the district.

Mr Yule says it is understood the Government is looking at ways to address the need.

“We are confident there will be a solution, we just need to ensure it is the right one,” he says.

Accommodation and border levies contributing to a co-investment fund between central and local government and the tourism industry is a preferred model.

“Co-funding, with contributions from central Government, councils and the industry, in a way that allows for maintenance and operational costs, is required. Whatever option is settled on it needs to be well supported by all parties if we are to see a durable solution.”

GST from international visitors alone rose to $1.5 billion in the year to March 2016, up from $950 million in the 2015 year.

*Ends*

About LGNZ and local government in New Zealand

Local Government New Zealand (LGNZ) is the peak body representing New Zealand's 78 local, regional and unitary authorities. LGNZ advocates for local democracy, develops local government policy, and promotes best practice and excellence in leadership, governance and service delivery. Through its work strengthening sector capability, LGNZ contributes to the economic success and vibrancy of communities and the nation.

The local government sector plays an important role. In addition to giving citizens a say in how their communities are run, councils own a broad range of community assets worth more than $120 billion. These include 90 per cent of New Zealand's road network, the bulk of the country's water and waste water networks, and libraries, recreation and community facilities. Council expenditure is approximately $8.5 billion dollars, representing approximately 4 per cent of Gross Domestic Product and 11 per cent of all public expenditure.

For more information visit www.lgnz.co.nz

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