Inbound Tour Operators Council Forum

Good Afternoon and Kia Ora

It's a pleasure to be here this afternoon, and thank you for inviting me to your Christmas wrap up.  I'm very keen to get out and engage with your sector as soon as possible, and your invitation was very welcome.

Firstly I'd like to pass on the regards of the Minister of Tourism, Prime Minister John Key.  It's a clear indication that this new Government recognises the importance of your sector to the country's economy that the PM has taken on the portfolio himself.  I'm going to be working very closely with the PM, and because of his responsibilities I think you're going to be seeing a lot of me.  But I am also certain that John Key is going to attend everything he possibly can, and he's certainly going to want detailed reports from me about what's going on in the sector.

As you know, we've got off to a whirlwind start as the new Government. It's been a pretty intense and exciting time as a new Minister.  There's a lot to get a handle on.

I've had the luxury of two years as opposition spokesman to come to grips with my job as Minister of Broadcasting, and I come from a health and business background, so I've had plenty of time to prepare for my job as Associate Minister of Health.  I'm putting a lot of time into my job as Minister of Immigration, and of course this portfolio, as associate Minister of Tourism.

So I'm not going to be so presumptuous as to lecture you people.  You rightly want action from the Government, but I'm going to be doing a lot of listening to you, the sector, because you are the experts in tourism.  And on that note, today is a good opportunity to hear from two of the major tourism groups in New Zealand.

However, I do want to briefly cover a couple of issues - the new government's policy on tourism and the issue of GST on facilitation services provided by inbound operators.

I know that the GST issue is one that has been the focus of a lot of attention for you, and understandably so.  I have had an initial briefing on this, and I can understand your frustration.  I completely understand your desire for consistency in law application and certainty for your members.  I also understand there is a case that has been referred to the Chief Tax Council and that the outcome will be of major interest to you.

I'm very happy to be briefed by you at any stage on this issue and I'm sure it will feature prominently in the ITOC briefing document that you're sending to the PM.

These are certainly difficult times in the world's economy, and as discretionary spending tightens for individuals, inbound tourism operators may feel vulnerable.

The United Nations World Tourism Organisation is predicting world tourism growth will be down to between 0-2 percent in 2009, which is well down on recent averages of around 6 percent over the past two years.  International arrivals to New Zealand and commercial accommodation nights have both fallen in the past year.  And I know I don't need to tell you people this, because I'm sure it's at the forefront of your discussions here.

So, what can the government do to help?

Well firstly, the Prime Minister has signalled that he is going to take active leadership in the portfolio - that is good news for your sector.  He is going to know your concerns and be taking responsibility.

An industry that accounts for 18 percent of export earnings and employs about 10 percent of the workforce is hugely significant for the country's prospects.  And tourism also is very important in promoting "brand New Zealand" which helps to make the rest of the world aware of us and contributes to the growth that is so necessary for this country.

To promote that growth, it is necessary for all our internationally focused agencies - tourism, trade and enterprise, and foreign affairs - to work together effectively, and to work effectively with the private sector.

One of the things we expect a "New Zealand Inc" approach to focus on will be to deal with environmental concerns overseas - such as carbon footprints - that may threaten New Zealand's image as a tourism destination.  And I can tell you that John Key raised the issue of the new long haul air fare taxes with Gordon Brown on his recent visit to London.

The Government will be working closely with Tourism New Zealand to make sure we are putting as many resources as we can into the front line marketing effort, so that we are getting maximum bang for our buck.

Part of that is keeping the brand fresh, so that it remains relevant to our audience.

The marketing and the brand are the "promise" to our visitors.  But what about the reality when they get here?

The attraction for many people visiting New Zealand is our natural environment, and the government's environmental policy will protect the resources that tourism providers rely on - clean water, clean air and unique landscapes.

There are other areas this Government will focus on in order to support and grow tourism.

National governments have always stood for encouraging business and allowing the entrepreneurial spirit to flourish.  Tourism is built on the efforts of a huge range of mainly small and medium-sized businesses.  One thing the government can do is make sure we don't hinder the efforts of businesses.

All businesses in New Zealand need a sound infrastructure and the tourism sector needs it as much as any other.  Good roads, reliable energy supply and ultra-fast broadband are all crucial.

But to achieve these things we need investment and we need to cut through red tape and compliance issues.  In our first 100 days we will introduce a bill to streamline and simplify the RMA.  We will also target other regulations that hinder businesses rather then help them.

This is part of the government's desire to work with the private and public sectors to help develop the industry further.  For our part, we can make sure that the public sector supports private sector initiatives.  One example of that is reviewing the current approach to Department of Conservation concessions.

The Rugby World Cup in 2011 will be one of the biggest promotional opportunities New Zealand will get on the world stage.  The government is right behind this event and will work with the organisers to help make sure it is a success.

However, many of these policies will take some time to have any effect, and the recession is starting to bite now.

More immediate action is necessary in the short term.  The Tourism Industry Association and Ministry of Tourism are organising a sector meeting next week to try to predict the effect the global recession will have on tourism.  From this they hope to come up with a common view on what is likely to happen as a result of the current economic situation.

This will be important for the Government.  If we need to take short-term action to help various sectors, it is much easier if we know that there is general agreement on what needs to be done.

Thank you for your time today.  I am still new in this portfolio and there is still much for me to learn.  As I said, I'm here to listen and I hope to get a chance to meet and talk to many of you in the near future.