No cash injection for industry in this year's Budget, Prime Minister says

Tourism won't be getting an injection of extra cash in this year's Budget, even though the $20 billion industry is facing one of its toughest years.

Prime Minister John Key, who is also the Tourism Minister, yesterday told members of the hotel industry he acknowledged the market was hugely competitive and New Zealand was up against some big players.

But he warned they should not get their hopes up for anything big in the May 28 Budget. "Don't get the wrong message here. There won't be a big boost in this year's Budget," Key said.

But he expected the Government to put more money into "the pot" over the next few years.

Talk of extra funding for tourism sprung out of the February Job Summit when Key spoke about a possible $40 million fund. But yesterday he made it clear only some of that money would come from the Government.

"One idea that came out of the Job Summit was a tourism fund to provide contestable funding for good ideas in the sector. It could work like this: We put in a certain amount of money. Then RTOs (regional tourism organisations), businesses and other tourism bodies can contest that money if they put in some of their own."

Tim Cossar, chief executive of the Tourism Industry Association, which has run a campaign to get a spending increase, said the news had not come as a surprise. "We were reasonably pragmatic about it. We have enough confidence to think that it will come over the next year or so."

Hotel council chairman Jennie Langley said Key had built up a level of trust with the industry and there was a belief that he was committed to tourism. "I think he wants to know tourism better first to know the current spending is productive."

She also believed the industry itself needed to contribute more to marketing New Zealand.