Tourism windfall from the Govt's $1b Provincial Growth Fund

Thursday, 12 July 2018

A high speed gondola, an art gallery, and a cathedral restoration are on the Government's shopping list of projects to help boost regional tourism and employment. 

The Provincial Growth Fund is offering $1 billion a year up for grabs, and four months after its launch, almost 300 applications or expressions of interest worth $1.4b have poured in.

About a third of them are tourism-related and provincial development unit head Nigel Bickle said that reflected the huge part tourism played in the economy. 

'When you think about the nature of the fund, the primary objective is to lift productivity and create more and better jobs.

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'Part of the strategy for a number of years, because tourism is a seasonal business, is to try and make it an all-year round business with more growth in the regions.'

Recipients of the $126 million allocated to date would do that, Bickle said. A $10m loan to Ruapehu Alpine Lifts was a way of getting plans for a $25m high speed gondola at Whakapapa ski field 'over the line.' 

The gondola will carry up to 2400 passengers an hour, attracting more non-skiers to the mountain year round. Building and operating it is expected to create 150 jobs.

The Hundertwasser​ Arts Centre and Wairau Art Gallery in Whangarei will receive $10m for a $26m gallery featuring the work of artist Friedensreich  Hundertwasser​ and contemporary Maori artists. It's a venture forecast to bring 200,000 visitors annually. 

A $5m investment in Taranaki Cathedral will create a tourism attraction, showcasing the sometimes turbulent relationship between Maori and Pakeha over 175 years. 

Tourism New Zealand (TNZ) welcomes that kind of investment because it wants to increase international visitor spending in the regions by $1b over the next five years.

To do that, chief executive Stephen England-Hall said regions needed the sort of accommodation and activities tourists wanted, and TNZ could provide advice on where the gaps were. 

'There's no point in sending people to the regions if there's nothing for them to buy.'

The $25m a year tourism infrastructure fund (TIF) set up under the previous National Government has been absorbed into the much larger provincial fund.

Bickle said the TIF largely funded 'loos and car parks,' but it was time to take a broader look at tourism investment.

'How do we do product development? How do we evolve tourism away from just scenery and great walks?'

The TIF's strict funding criteria upset some councils who were ineligible for money and Bickle​ said they had deliberately avoided setting blanket rules or narrow criteria for the wider PGF. 

However, in the coming weeks the unit would release a clearer statement on priority projects to avoid time-wasting applications unlikely to attract funding.  

Grants, loans and co-investment were all options, Bickle​ said, and in some cases the Government might take shares in a venture. 

'We don't want to do things the private sector would have done anyway, but to leverage private sector investment.

'It's very clear this is not a $3b grants programme giving away $3b.

'Where there's private benefit the Crown is rightly looking for a return on its investment,' said Bickle.

The ​provincial development unit has a team of 40 staff who will assess applications and carry out due diligence on applicants, with input from an independent advisory panel. 

Senior staff make decisions on projects less than $1m, with four delegated ministers approving those between $1m and $20m, and projects over $20m going to Cabinet. 

Government investment in tourism is not new and the tourism growth partnership scheme awarded more than $23m to 40 projects before it was discontinued last year.

Tourism Industry Aotearoa chief executive Chris Roberts said one of the scheme's most successful examples was the building of a mountain bike track at Rotorua which led to a 10-year contract with the Crankworx​ mountain bike festival.

That event last year drew more than 36,000 spectators and professional athletes. 

'There was an intention to build something anyway, but the Government funding lifted it to an international standard, they were able to attract Crankworx​, and get a multi-year contract to run the event every year bringing millions of dollars into Rotorua.'

Roberts said there were 'a multitude' of  PGF bids in the pipeline from councils and he hoped they would talk with local tourism operators when they were putting proposals together. 

'Every region needs to be very clear what its unique proposition is, and many regions are trying to do that.

'For most of New Zealand the main attraction is something to do with the scenery, it's what services are built around that, the accommodation, transport and other activities.'