10 Sep 2020

Election 2020 Tourism Debate: Kelvin Davis and Todd McClay

From Checkpoint, 5:32 pm on 10 September 2020

Last year tourism was New Zealand's number one export, but Covid-19 has brought it to its knees, after our borders essentially slammed shut back in March.

The sector directly employs about 230,000 people, but with no signs of the country opening up to international visitors anytime soon, what is the future for an industry that has until recently made up almost a quarter of our exports?

Labour's Kelvin Davis and National's Todd McClay join Lisa Owen to debate tourism policies.

Tourism in NZ: Survival mode or recovery?

Todd McClay: "I think it's a combination of both, there are tourism businesses that are in survival mode, and some of them who are not sure how they're going to survive. At the same time, there are real opportunities around domestic tourism, but the problem I think we have in the very short term is around competence and certainty.

"So if we look at Taupō and Rotorua as an example, two tourist destinations, they started to do much better after the initial lockdown was lifted and largely it was visitors from Auckland for weekends and for longer. But when we had the systematic failure at the border and this virus established itself in Auckland again and Auckland went into level 3 the door was shut."

Kelvin Davis: "I tend to agree with Todd there are some businesses that are doing it really tough, but also there are glimmers of hope on the horizon. We didn't expect domestic tourism to be quite as responsive as it was, so that was really positive."

Govt's $400m tourism recovery package and strategic tourism assets

Davis: "What we're trying to do with the tourism recovery fund is to try and spread it as wide as we could to make sure we got the biggest impact. So the initial part was $17 million went to the tourism transitions fund to help businesses to either pivot to the domestic market or hibernate or to explore other options.

Davis said operations like Wellington Zoo and Zorb Rotorua met criteria to receive funding as strategic tourism assets. "They would attract visitors in their own right, if they didn't exist then there may be significant loss of spillover effects into other businesses.  

"The criteria and all the applications went through a very rigorous business, they were assessed, there were peer-reviewed, they were moderated by MBIE… MBIE consulted with a number of other agencies such as Māori Tourism."

McClay: "I don't know that we would have funded the same businesses, but we would have had a very open and transparent system that treated everybody equally and fairly.

"Question of why Wellington Zoo got funding and Auckland Zoo didn't is a very good one, maybe one of them had an extra elephant. Actually both of them should have been assessed the same and had the same opportunity.

"The problem we've got is about $300 million was spent very, very quickly. Every single dollar of that has to be borrowed and paid back sometime in the future. And there's about 140 businesses around New Zealand that have been helped. Take the example of AJ Hackett, good on him he applied, but he was given $10 million to save 20 jobs. There'll be businesses down the road in Queensland with the same if not more need, and actually didn't get that funding and don't get to save those jobs."

Davis: "That raises the question, Todd is saying what about the tens of thousands of other businesses, so I assume that he's saying that National would have funded those tens of thousands of other businesses, and then what's the cost to that?

"We had to make decisions, we had to draw lines in the sand somewhere and that's exactly what we did. The process was open, it is transparent, and of course there are going to be some people who didn't receive funding… We've always said from the outset that we couldn't save every business in every job but we had to make decisions.

"He said in his comments just then that this money was spent quickly. Well, he's spent the last five months criticising me saying that we're not doing things fast enough so he can't have it both ways."

National's tourism policies?

McClay: "We will be announcing a full round of tourism policies in the coming weeks so [the Tourism Accelerator Fund] that's only one component of it, but ultimately it's very similar to the tourism growth partnership we had under the last government where the tourism sector was able to look at innovation, ways to drive tourism, to change their businesses. It was fully assessed and decisions were made independently of the government. I would have a view that we would want an independent group of people making these decisions not the Cabinet." Cabinet would do final sign-off, he said.

Davis: "If we talk about the National Party's policy it actually is $100 million over four years, $25 million in the first year. Now, we allocated $400 million in the last six months. $25 million that they're offering is one-sixteenth of what we've done... I think it's an insult really to the tourism industry to say 'here's $25 million'."

McClay: "It's the first part of policy and we'll be announcing more… I'm not going to announce it today, but actually what we're doing is looking both in the short term is how we get businesses through the next period."

Opening borders?

McClay: "I do think we need a responsible debate around what an open border might look like. If we have a consideration of Singapore as an example, they've come to a position where they want to welcome New Zealand visitors there. I don't believe the border of New Zealand can be opened safely today, but what is really important for the tourism sector is the start of that conversation about what it might look like and when it might happen.

"A very low level of risk would be important, we do need to consider health. We need to ensure that the Border Agency has control of the border and that we have track and trace and the ability to get on top of any incursion very quickly.

"Earlier this year, there was ongoing discussion about the trans-Tasman border and the Cook Islands, the government had announced opening up travel to the Cook Islands, so that demonstrates there are opportunities or ways that this can happen."

Davis: "You asked Todd what his policies were and he just said he wants to have a big conversation. Our plan is actually being implemented. What he described is what we're actually doing in terms of the contact tracing, we had a resurgence plan, unfortunately we had to implement it.

"When Covid-19 initially hit, people were asking me to stand up and speculate about when the trans-Tasman bubble would be opened, and I didn't, I wouldn't speculate because businesses would go out and they would make business decisions about hiring staff and training staff.

"Thank goodness that we didn't speak late on timeframes, because to be honest we were hoping it would be around about now that the trans-Tasman bubble would have been opened. And if we'd got to a situation where we are now, after me speculating about this timeframe, businesses would have said we'd given mixed and confusing messages.

"There are things that can be done in the meantime, so for example Tourism New Zealand, they've been charged with keeping the brand New Zealand alive in the hearts and minds of our international markets."

Matariki public holiday?

McClay: "I do think Matariki is a good idea, I support it, but I've got to tell you when they announced it in Rotorua on Monday… and billed it as a solution to the challenges that the tourism industry is facing at the moment, it actually is not going to help at all, it's two years away. Kelvin, if another holiday is going to fix tourism let's have 10 this year, please.

"I do think we should take an existing holiday and move it over rather than another one."

Loosening physical distancing rules on planes?

Davis: "We've had this conversation in Cabinet… We understand the concerns, but ultimately we listen to the latest advice, the latest health advice, and make decisions based on that."

McClay: "If the masks work and declared to be safe, yes we should do it. As tourism minister, I would be advocating for it. It would be for [Ministry of] Health to say whether or not it's possible."