Media Release
Budget no boost for tourism
18 May 2006
The tourism industry is surprised that funding for New Zealand’s international marketing has not been increased in
today’s Budget, the Tourism Industry Association New Zealand (TIA) says.
“Dr Cullen announced an $8.5 billion surplus for the Government but virtually nothing for one of the leading industries
driving economic development,” TIA Chief Executive Fiona Luhrs said.
“Given the Government’s vision for the economy, we are surprised that Tourism New Zealand’s funding has not been
increased over this year. This is a lost opportunity for New Zealand at a time when the economy is slowing.”
The Minister of Tourism, Damien O’Connor, is trumpeting an extra $63.7 million to lift New Zealand’s offshore marketing
efforts, Ms Luhrs said.
“But it is important to note that this funding, spread over four years, merely holds Tourism New Zealand’s funding at
its existing 2005-06 level. To clarify the Minister’s figures, Tourism New Zealand’s core funding has been boosted in
the last few years by fixed term funding increases. Today’s Budget merely cements those funding increases in place for
the next four years.” (See attached figures)
She compared today’s Budget with last week’s Australian Federal Budget which saw funding of $320 million for tourism
over the next two years. This was in addition to funding for tourism from the Governments of each state.
“Australian Government funding for tourism has increased by 60 percent since 2000, according to the Australian Minister
for Tourism. New Zealand Government funding for Tourism New Zealand has risen only 25 percent in the same period. TIA
cannot understand why the New Zealand Government is failing to give similar backing to tourism in this
country as the Australian Government is offering its industry.”
Tourism is one of the few industries that provides jobs and economic growth opportunities in every region of New
Zealand, Ms Luhrs said. International visitors also contribute in the region of $481 million to Government coffers
through GST each year.
“Tourism is the fastest growing industry in the world and the tourism industry is willing to work with the Government
to ensure New Zealand is well positioned to attract its share of the global market. However, we need to see more
commitment from the Government than this Budget has delivered.”
The New Zealand tourism industry has consistently demonstrated high rates of growth over the last six years but is
facing significant challenges. New Zealand’s dream run as one of the world’s hottest destinations is under attack, with
India, Vietnam, Cambodia, South America, parts of Africa and Australia becoming fashionable. Visitor growth is slowing
and the costs of advertising in offshore markets have increased, she said.
Meanwhile, cheap trans-Tasman airfares are encouraging New Zealanders to travel overseas, affecting domestic tourism.
“Private sector tourism businesses have been stepping up to the challenge of marketing their products internationally
but to successfully keep New Zealand’s profile high among potential visitors, we need strong consistent commitment from
the Government to promote New Zealand as a visitor destination.
“This is the responsibility of New Zealand Inc., not individual tourism businesses. Strong offshore promotion also has
spin-offs for international trade, immigration and foreign affairs.”
TIA Members identified last year that more funding for international marketing was their number one priority in terms of
how they wanted the Government to assist the tourism industry, Ms Luhrs said. TIA has been campaigning hard for an
increase in Tourism New Zealand’s funding.
Tourism New Zealand’s Government funding
Tourism New Zealand’s total Government funding over the last few years:
97-98: $32.767m
98-99: $55.527m
99-00: $64.439m
00-01: $55.027m
01-02: $56.925m
02-03: $54.702m
03-04: $60.387m
04-05: $60.237m
05-06: $69.004m
(source: Tourism Research Council New Zealand)
Key statistics about tourism:
- Tourism is the world's fastest growing industry
- New Zealand tourism arrivals have doubled in size since 1994 to 2.38 million
- Forecast annual growth is 4.7% on average for at least the next five years
- Tourism is New Zealand's single largest export sector and contributed $7.4 billion dollars to the economy in the year
ended March 2004. That is 18.5% of exports
- Domestic tourism contributes $9.8 billion to the economy each year
- Tourism directly and indirectly employs 10 percent of the work force. That is one in 10 jobs in New Zealand.
- Tourism represents 9.4% of gross domestic product and generates around $481 million in GST returns from international
visitors each year. Tourism is the only export sector whose international clients pay GST.
ENDS