Tourism could be hit hard if local councils stop investing in it, the Tourism Industry Association New Zealand (TIA) says.
The TIA was concerned changes to the Local Government Act 2002 Amendment Bill which proposes councils focus on "core activities" will mean councils will no longer invest in tourism development.
The TIA has submitted on the bill.
"An end to local government investment in the visitor industry could lead to a decline in economic activity in many regions of New Zealand," TIA policy manager Simon Wallace said.
Local authorities perform an important role in the tourism industry through their investment in public amenities used by both residents and visitors, such as water, sewerage, toilets and roads.
In some cases, councils also operate visitor attractions such as museums, art galleries, gardens, events and sports stadiums.
Councils also fund regional tourism organisations (RTOs) and economic development agencies for destination promotion and marketing.
"Local government support is vital, as most tourism businesses are small and operate on low margins, so they are not able to fund big marketing campaigns by themselves. But councils earn a good return on their investment in tourism, as visitors spend millions of dollars in the regions," Mr Wallace said.
In a speech to the Local Government Chief Executives' Forum today Local Government Minister Rodney Hide said the legislation was needed.
"The return to a focus on core council services will mean that processes are simplified and streamlined. By core services, I mean, those things that most people understand and expect their councils to provide, such as waste collection and public transport...
"These amendments will help cut back on wasteful spending, pet projects and ill informed decisions that so often leave councils with debt burdens for little gain, and ultimately, pass the cost on to the ratepayer in the form of increased rates."
(Seeking comment from minister)
NZPA