Fast Facts

Predicted tourism boom could push infrastructure to breaking point

LGNZ President Dave Cull says that a new forecast predicting an international visitor increase of 37% to 5.1 million annually by 2024 will be a great boost to regional economies across New Zealand, however infrastructure is already under pressure and much more is needed to ensure a fair funding division is achieved between tourists and local ratepayers.

The report released by the Ministry of Business, Innovation and Employment shows a big uplift in tourist numbers and spending, with total international visitor spend expected to reach $14.8 billion in 2024, up 40 per cent from 2017.

“The tourism sector is predicted to grow rapidly over the next two years, but as evidenced last summer infrastructure it is extremely stretched in many regions, with provision of public toilets, car parks and basic potable and waste water infrastructure coming at a substantial cost to communities,” says Mr Cull.

“Those communities with scale can share the burden across many rate payers, but smaller ratepaying bases are picking up big bills to accommodate visitor demand and the lack of infrastructure is resulting in tension among communities.”

Mr Cull contends that the increase in international visitor spend should be harnessed to provide tourism infrastructure.

“This is about fairness. It’s not right to burden ratepayers with subsiding the entire cost of infrastructure which is used by tourists, and there needs to be a new mechanism for tourism to support itself.”

LGNZ has welcomed the government’s efforts to provide supporting funding for councils through the Tourism Infrastructure Fund launched in 2017. The initial investment of $14,222,594 for round one to fund 34 applications has helped, but it falls well short of what will be needed in the future to prepare for this influx.

This funding mechanism is a grants funding scheme administered by a government department which has limitations in its ability to effectively resolve the funding gap that is ever widening, particularly in supporting ongoing maintenance of infrastructure.

LGNZ is advocating strongly to Government on councils’ behalf that the Government introduce a Local Tourist Tax to raise the necessary funding to meet the capital and operating costs associated with tourism mix-used infrastructure future demand, thus alleviating the financial burden on local ratepayers.

Without the necessary funding tools to ensure the needs of both locals and tourists are met, New Zealand faces the prospect of over promising and under delivering in a sector that is so critical to our economic future.

“New Zealand should be known as a high-quality tourist destination with fit-for-purpose facilities to handle the expected increase in numbers and a country that welcomes and embraces their visit.”

Source: LGNZ

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