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Govt mulling tourism spend options

NZ NewswireNZ Newswire 9/11/2016 Tina Morrison

Prime Minister John Key said the government is moving closer to making a decision on how to fund additional infrastructure needed to cater for record tourism inflows.

New Zealand tourism arrivals rose 11 per cent to a record 3.4 million in the year through September, and Key, who is also the country's Tourism Minister, told the Tourism Summit Aotearoa at Te Papa in Wellington that more infrastructure spending is needed to cater for the growth.

"I don't think there's much doubt that there's the need for greater investment in infrastructure in tourism," Key told the Summit. Doing nothing wasn't an option because "I don't think you can sustain going to 3 to 4 to 5 million tourists and not be frankly building more toilets and more facilities and all this sort of stuff."

Key noted that there were many "great opportunities" for further development for tourist activities but local councils may not be able to respond to quickly enough or be able to fund them on their own.

Consultancy firm McKinsey & Co is preparing a report for an industry group, spearheaded by Air New Zealand, on infrastructure demands around New Zealand and funding options which is expected to be presented to the government before Christmas.

Key said it identified about 50 potential projects and looked at how other countries funded such developments.

The government is likely to take some time to consider the report, which will be publicly available before it makes a call on how to proceed, he said.

"The question then becomes how much money do you need, what would you allow it to be used for, and who would decide, and then the last bit is how would you fund it."

"Around the world as I understand it, there are a range of different models," Key said, noting potential options included the introduction of differential pricing, which could see tourists pay for attractions such as national parks, a departure tax, bed tax, or tourism levy.

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