23 November 1995 Funding 'Source' For DOC Identified By Lincoln Lecturer

Finance for a cash-strapped Department of Conservation is no further away than the "cash bonus" of GST the Government receives from New Zealand's international tourist trade, says Lincoln University senior lecturer in tourism Dr David Simmons.

"Because it brings in foreign exchange, tourism is an 'export' industry, but unlike traditional export businesses it is not GST exempt. The Goods and Services Tax the industry pays – and last year it amounted to $389 million – is thus a cash bonus for the Government," he says.

"Based on current tourist arrivals this GST bonus represents $281 per visitor or $15 per international visitor day. In addition tourism also generated $1 billion in PAYE and company taxes in 1994.

"If, in the light of the Cave Creek Disaster Report, the Government is seriously concerned about under-resourcing of the Department of Conservation, then it should look to channeling some of its tourist industry GST earnings into the department's sphere of activities.

"Tourism needs to be considered a 'national business' and the question must be asked – what constitutes a tourism product?

"Tourism as a system is rife with market failures because the essential features of tourist experiences and satisfaction are natural and cultural resource systems, and what, it can be asked, has tourism contributed to the maintenance and enhancement of these?

"Any 'business' has to monitor closely its current products and research and develop new products. In tourism this research and product development is sorely lacking as governments – both national and local – are simply taking the benefits and not putting sufficient resources back into the public domain where the real action of tourism occurs."

Dr Simmons says that as an example, a tourist taking a concessioned walk in a national park could be paying up to 20 percent of the fee directly to the Government. This comprises 12.5 percent GST plus a concession fee of up to 7.5 percent.

"But what do the site managers get to manage the actual tourist pressures at the site? Next to nothing, as the Government claims the greater proportion of this for the consolidated account.

"New Zealand does not need any additional tourist tax, but it should seriously consider the allocation of some of its GST earnings for managing key tourist sites.

"It is misleading to argue whether or not DOC's budget has increased or been static since the department's inception in 1987. A more fundamental problem has been a failure to manage the many key tourism sites throughout New Zealand as fully fledged tourist attractions.

"The current discussions are also mischievous as international visitor arrivals have increased 56 percent from 1987 (when DOC came into being) to the present.

"Changes in domestic tourism patterns are not well known but would be expected to be increasing as New Zealand emerges from the recession of the late 1980s."

However, Dr Simmons does not believe that all GST should simply be handed to DOC. Proper accountability and project management are necessary requisites, he says

"Obviously too the requirements of the Resource Management Act for sustainable management have increased local government responsibilities.

"Many small New Zealand towns (such as Kaikoura, Paihia, Te Anau, and Akaroa) must cater for tourism pressures on a small rating base which could well be augmented by the deployment of GST-generated funds. These should not be for tourism promotion but for the essential infrastructure (water reticulation, sewerage systems, parking, litter control, amenity development) which allows tourism to prosper.

"What we need is a clear understanding of how tourism, with its unusual mix of public and private resources, works if we are to manage it in a way that is sustainable, and does not destroy either the resources on which it is based or community goodwill."

Dr David Simmons, Department of Parks, Recreation & Tourism Lincoln University, Canterbury.

Ian Collins, Journalist, Lincoln University, Canterbury, New Zealand.