Budget 2022: Unspent tourism funds for $54 million 'innovation programme'

Tourism Minister Stuart Nash. Photo / Mark Mitchell

The Government will use $54 million it didn't get round to spending earlier in the hard-hit tourism industry to fund an "innovation programme".

Tourism Minister Stuart Nash says there was more work to be done on the programme but fitted the Government's vision of a more sustainable tourism sector. Before the pandemic it vied with dairy as the country's biggest export earner.

A tourism sector group said it was disappointed the funds had not been allocated earlier to businesses that are clinging on.

''International tourism businesses are still in survival mode and looking to innovate is a nice to have but not a priority when you have families and staff trying to put food on the table and cover their family and business bills,'' said Tourism Export Council chief executive Lynda Keene.

In total, $288m has been allocated for tourism in the 2022-23 year, up from the $263m announced last year.

Nash said the new programme is subject to further detailed design work, and will prioritise innovation and low-emissions projects, and support tourism recovery.

"We will work alongside tourism businesses to develop new innovative ideas that improve sustainability and productivity of eligible businesses."

He said the Government had agreed to reallocate funds from previous tourism support programmes that were not drawn down by eligible businesses.

The Ministry of Business Innovation and Employment says the programme will support the transition of the tourism sector to a high wage, low carbon model and deliver ''transformational outcomes'' for the tourism sector.

The programme is targeted at initiatives that deliver on one or more of the following outcomes:

• Climate: reduce carbon emissions in the tourism sector or have a positive impact on the climate.
• Sustainability: increase the resilience or environmental sustainability of tourism.
• Technology: lift productivity or capability of the tourism sector through technology-based solutions.

Keene said the fact there's no detail on how the funds will be distributed and what the criteria is to apply for the new fund is frustrating.

''We are not sure if the businesses that really need funding support will meet the criteria, we really hope so.''

The council wanted further engagement with the Government.

''We have to focus on the most practical investment to ensure there is a quality international tourism offering in the future. If some businesses can't get support from the latest fund, New Zealand's global reputation will continue to be at risk,'' said Keene.

Included in the $288m allocated is just under $112m for the promotion of New Zealand to key markets as a visitor and business destination.

There is just over $68m for domestic visitor marketing, destination planning and management, just over $55m for the funding of New Zealand tourism infrastructure, just over $32m for the funding of tourism facilities and $19m for strategic tourism assets.

Funding for tourism during the pandemic has sparked controversy and a critical Auditor-General's report.

Earlier this year the decision to fund five South Island communities most reliant on international visitors with $49m from a Tourism Kick-start Fund resulted in outcry from tourism operators outside those areas.

And the Auditor-General found there were serious deficiencies in the Strategic Tourism Assets Protection Programme unveiled in May 2020.

In the end, 127 tourism businesses were given grants and loans worth at least $166m. While big commercial entities benefited, dozens of businesses were turned down, and many more didn't apply because of confusion over eligibility because the funding criteria were so unclear.

The Auditor-General found ministers never developed clear criteria for how to dole out the money, and no proper records were kept on their decision-making process for who to give money.