Department of Conservation budget set to take a hit from coronavirus

Tuesday, 21 April 2020

A new international visitor levy will pay for tourism and conservation projects.

Department of Conservation revenue is likely to take a hit from the global pandemic as coronavirus restricts domestic and international travel.

Last year the department earned $27.2 million from concessions fees, leases and licences but the Tourism Export Council is among bodies pressing for DOC to charge no concession fees for 12 months.

DOC was also in line to receive half the $80m raised annually through the international visitor levy introduced last year, but border closures and the possibility of a long recovery period mean income from that source is likely to drop too.

Recreation and tourism concessionaires make up about 1000 of the 4500 that run activities on DOC land, and they have been given a month's grace to pay fees due in April while the department considers what support it might offer.

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Conservation Minister Eugenie Sage has assured DOC concession holders there will be support for those whose operations have been badly affected by the Covid-19 pandemic.

* International tourists to pay new $35 visitor levy

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* DOC earns $17m from concession fees and sharpens its commercial skills

* Department of Conservation increases aircraft landing fees to match tourism growth**

A drop in overseas tourists will have an impact on the international visitor levy that was to raise $40m a year for the Department of Conservation.

The department declined to reveal how much it may have to forgo in concession fees if businesses could not afford to pay saying it was 'budget sensitive information.'

However, Conservation Minister Eugenie Sage has promised financial relief for concessionaires, saying it was a difficult time for all businesses, in particular tourism operators.

Options included refunds for concession fees which had been paid in advance, extension to payment terms, deferring applications for renewals and waiving administration fees for incomplete applications and reviews.

Trampers relax outside the Awaroa Bay DOC hut, in the Abel Tasman National Park. Fees charged for huts, campsites and the Great Walks, plus retail sales at DOC information centres, brought in about $20m last year with overseas visitors paying double for huts on some popular walks.

Sage said the department was dealing with recreation and tourism concession holders on a case-by-case basis and this may result in DOC waiving concession fees and/or writing off debts.

'If tourism and recreation concession holders are experiencing financial hardship they should contact DOC to discuss their situation.

'DOC is working with central agencies on an all-of-government approach to debtors that is equitable, while maintaining good financial practice.'

Active Adventures pays up to $60,000 a year in concession fees for the guided walks it operates on DOC land.

Chief executive Wendy van Lieshout said that while they were preparing to target the domestic market, but until that began to take effect 'our revenue has stopped dead.

'Ideally we'd like to see relief from DOC for 12 months, which will take us through the next summer season and will greatly assist with cashflow at a time when we'll be trying our best to reinvigorate the New Zealand and, hopefully, the Aussie markets.'

The Government is also reviewing use of the $35 per head international visitor levy (IVL) that was collected as part of a new electronic travel authority.

The IVL was to be split between tourism and conservation projects, and the review will look at how it could be used as part of a tourism restart package.

Since it was introduced last July, 162,000 people have paid the levy, raising more than $56m to date.

The system does not allow for refunds for visitors who do not end up coming to New Zealand, so we get to keep that money.

But prolonged border closures are likely to affect future levy revenue and Forest and Bird chief executive Kevin Hague believes the Government should compensate DOC for any impact the drop in international tourism has on its budget.

'I suspect incoming tourism at any significant level is going to be pretty much off the table for some years to come.

'While $56m in the hand is great right now, the Government budgets four years out, and three years have zero against that column now.'

Hague said it was also crucial that protection of biodiversity did not get lost in the push for shovel-ready projects - such as building huts and tracks - to create employment.