News In Brief

“Only the viable will survive” even as Budget 2020 extends support

The anticipated tourism rescue package announced in Budget 2020 received a mixed response from the industry with many in agreement that it will not be enough to save jobs.

The government announced a $400 million Tourism Recovery Fund, alongside the extension of the Wage Subsidy Scheme and a domestic tourism campaign, to shore up the devastated industry and support recovery.

Independent association, Tourism Industry Aotearoa’s response to the Budget was overall positive, satisfied that it sent the “right signals” that the Government has “recognised the critical importance of the tourism industry to New Zealand’s future” but that the package is only the beginning of what will be needed for recovery.

TIA Chief Executive Chris Roberts said: “Tourism was the first industry to be hit by the impacts of COVID-19 and will be the last to recover.”

“The Budget package will not be enough to prevent significant job losses across the industry. In terms of immediate survival, the measures announced today are welcome but further initiatives will be required in the months and years ahead.”

Tourism Minister Kelvin Davis stated: “This targeted package will go over and above the Government’s broad-based support of businesses and workers, and reflects the importance of tourism to Aotearoa, our economy and our people.

“When forming this response package, my colleagues and I carefully considered feedback from industry. Initial, wide-ranging consultation identified a strong desire for a deep look at the future of tourism, but also significant short-term pressures because of COVID-19.

“There were strong calls for further support for staff costs, the extension to the Wage Subsidy Scheme announced today will also help businesses cover staffing costs and protect jobs, while we ramp up a domestic tourism campaign.”

According to Mr Roberts the extension to the wage subsidy had been top of the request list for many tourism businesses. He said: “Almost all will be able to meet the new qualification of showing at least a 50 percent drop in revenue, but some will be disappointed it is only for an additional eight weeks.”

The 400 million Tourism Recovery Fund, will include a Tourism Transition Programme to provide specialist advice and guidance to businesses and a Strategic Tourism Assets Protection Programme that will direct support to private businesses that have a strong positive impact on their communities. Furthermore. a Tourism Recovery Ministers Group has been formed alongside a public-private New Zealand Futures Tourism Taskforce, with an independent chair, to advise Ministers.

Mr Roberts said: “The Tourism Taskforce will have a crucial role to play in advising Government on the long-term recovery and reimagining of tourism.”

“Tourism businesses are resilient and are determined to stay in business with a helping hand from Government. I’ve spoken with Tourism Minister Kelvin Davis this afternoon and he has assured me there will be close engagement with the industry on what the next steps should look like and what further business assistance is needed.

“Government and industry need to work hand in hand to get through this crisis and emerge with a new, sustainable tourism economy that delivers for Aotearoa and its people – the Budget is a good start.”

Many agree the tourism sector is at the beginning of a journey. It will be changed and will need continued support to rebuild a sustainable tourism industry this will require flexibility from government, industry, and private sector.

Finance Minister Grant Robertson appeared on TVNZ1’s Q+A on May 18, talking about the need for flexibility in the tourism business model.  He said: “Businesses most hard hit by Covid-19 need to start considering restructuring and reorientating for the long term.”

When asked about the targeted extension of the Government’s wage subsidy, for an extra eight weeks to businesses with a 50 per cent or more revenue loss.

He stated: “We’ve been flexible, we’ve responded to need as its arisen. We are now targeting more; I think that’s the right thing to do.”

“I’m not in a position of saying ‘that’s it, it’s a total cut off’, but this is us showing we’re focusing more for that eight-week period.”

“What we’ve tried to do is support the vulnerable, but the viable.”

Specific support measures for tourism in the Budget includes:

  • A $400 million Tourism Recovery Fund, in two parts:
    • Tourism Transition Programme to provide specialist advice and guidance to businesses to help them switch to the domestic market, prepare for the opening of the Tasman border, to hibernate, or to consider other options
    • Strategic Tourism Assets Protection Programme that recognises that private tourism businesses are often the core element of a region’s attractiveness as a destination. It will direct support to businesses that have a strong positive impact on their communities. Where such businesses have exhausted their private sector funding options, government officials will work with them on bespoke solutions.
  • Formation of a Tourism Recovery Ministers Group
  • Formation of a public-private New Zealand Futures Tourism Taskforce, with an independent chair, to advise Ministers.

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