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Peters: Vision, Regulations, Alcohol Laws, Safety & Security

Rt Hon Winston Peters

New Zealand First Leader
17 September 2014

Hospitality New Zealand Conference

Wednesday 17 September, 2.15pm

Rotorua Energy Events Centre, Rotorua

VISION, REGULATIONS, ALCOHOL LAWS, SAFETY AND SECURITY

Thank you for the invitation to speak at this important hospitality conference being held so close to the election.

So much of this election campaign has overlooked policy and that has been disappointing.

The hospitality industry underpins the New Zealand tourism industry so this is a chance to outline New Zealand First’s policy on tourism, based on the approach we take in other areas of national importance.

We are not doctrinaire or dogmatic.

We are not addicted to arcane theories and abstractions from either the left or the right of politics – we are interested in what is best for New Zealand’s tourism and what works.

Tourism is a complex industry in which all the component parts - airlines, accommodation, infrastructure, and operators all have to work together to meet the challenges of an ever changing market.

Challenges that range from the Christchurch earthquake, to the overvalued dollar, to new competitors chasing the same tourists. And challenges such as regulations like the UK departure tax require a response.

It is essential that tourism and hospitality continue to grow. The consequences of underperforming are too serious in terms of jobs and export earning for any complacency.

The facts speak for themselves.

There are well over 100,000 full-time equivalent employees directly employed in the tourism industry (not far short of 6 per cent of total employment).

If we include those indirectly employed in the sector it is estimated that to the year ended March 2013 around 180,000 full time equivalent people were employed in the tourism industry. Many, perhaps most, of those jobs are in your part of the industry, the hospitality industry.

At 180,000 full time equivalent employees, that is about 9 per cent of total employment in New Zealand.

Total tourism expenditure in New Zealand from both domestic and international visitors was $24 billion in the year ended March 2013.

So the direct and indirect value added contribution to GDP from the tourism industry in the year ended March 2013 was 8.7 per cent.

In the year ended July 2014 international tourists generated around $10 billion in foreign exchange.

If ever the expression – “too big to fail” applies, it is to the tourism industry.

New Zealand’s hospitality industry needs a thriving and growing tourism sector both at the international level and the domestic market. We must never forget the domestic markets, so pivotal to the industry’s health when other international markets are shifting.

Due to the lack of vision and ideas on sound economic management, the New Zealand economy has never been more vulnerable.

We are now deeply dependant on milk power and log exports – to one major market – China.

A present, tourism is the one of the few in the export sector that continues to offer growth in a feasible time period to regain some balance in our economy.

So what are the policies required to seriously grow the tourism and hospitality sector?

First, the Government has been an abysmal failure on monetary policy, i.e. the exchange rate, or to be more precise, doing something about the gravely overvalued New Zealand dollar.

Every percentage of overvaluation of that dollar is a loss to the New Zealand inbound tourism industry.

Tourism is an export industry, and like so many exporters, it’s suffering from economic dogma, that while recognising that the dollar is seriously overvalued, will not do a thing about it.

The question is, do you want action or do you want more tea and sympathy?

Our policy is to rewrite the Reserve Bank Act to reflect the blunt fact that New Zealand has an export–dependent economy.

We will create a sensible exchange rate regime that serves you and New Zealand’s economic interests.

Our legislation to reform the Reserve Bank Act was defeated by one vote on two occasions in the last three years.

We have pushed for this change because in spite of the terms of trade having been at a 40 year high, our economy is dangerously exposed and heavily reliant on a narrow range of unprocessed or minimally processed primary, dairy and timber products.

Tourism is just one – albeit an important one – of the many sectors that have suffered from a chronically overvalued exchange rate.

And you have a chance in this election to do something about it.

A realistic exchange rate is therefore fundamental.

Most international tourists arrive by air. To maintain the growth of the tourism industry we will ensure that Air New Zealand remains in government ownership, thereby securing this “Mission Critical Aviation Access” to New Zealand.

Second, we will encourage the ongoing establishment of links and agreements with other airlines and countries and together with the improvement of the regulatory environment, including our own visa requirements, provide for more sustainable tourism.

Third, we will support regional tourism developments and regional initiatives to use tourism to stimulate economic growth in the provinces through the use of government funding and support, where that can be demonstrated to be clearly in our economic interests.

Fourth, New Zealand First wants a balanced transport policy involving all modes of transport.

This means we are committed to the development and maintenance of transport and tourism infrastructure – a well maintained highway system and rural roading network particularly on those scenic and signature routes whilst not forgetting public transport.

Scenic routes must be far more aggressively promoted. Tourists seeking to arrive and drive in New Zealand need much greater preparation and understanding of our road rules and our road conditions.

For example, if you’re coming from somewhere that never sees snow, only to arrive in Queenstown and find yourself driving over the Southern Alps – that’s driving conditions that some may have never have experienced before.

Or if you’re used to driving on autobahns at high speeds, you need serious preparation into some of the uneven and winding roads, particularly those on our wonderful scenic routes.

The world’s best airports now have good public transport links to their city centres – so it’s important for the rail link to Auckland airport to go ahead soon.

Similarly in Wellington for the equivalent cost of a modern long haul jet airliner the airport runway could be extended to take direct flights to and from Asia.

And a light rail link from the airport into Wellington’s city centre, all the way to the Hutt Valley and up the coast should be planned as well.

The Prime Minister has said that Wellington is dying. Well, we are going to breathe new life into it.

Far-fetched? Not if we are really serious about boosting the tourism and hospitality industries.

And of course such infrastructure improvements are also of benefit to all New Zealanders.

Fifth, on the issue of the tourism and hospitality workforce we recognize the need to upskill and develop our own people first.

Overall, we are not in favour of any attempt to relax immigration policy to allow more immigrant labour into the tourism sector. In our view the first priority for New Zealand jobs has to be the New Zealand workforce.

Your job is to help train them, our job is to help you pay them.

It’s a fact that your industry suffers from a lack of skilled staff, particularly managers, which means the industry must get proactive about training and retaining New Zealanders.

To do that, this industry must pay better wages and be put in a position to do so.

That’s why New Zealand First’s minimum wage of $17 an hour is backed up with tax concessions to enable businesses to be able to pay these wages and remain profitable.

Our policy is of mutual benefit to both employee and employer.

Increased happiness, increased productivity.

Sixth, New Zealand First wants the profits from the tourism sector to stay in New Zealand.

That is why we support stringent tests for foreign takeovers of New Zealand businesses.

That is why today’s Flock Hill controversy is a case in point.

The Americans and other nations need to understand that we’re not lending “God’s Own” to make them a profit.

There is little point in promoting the added value of our tourism for foreign economies to gain the benefits.

There is little point in having a booming tourism sector if much of the benefit ends up offshore.

There is little point if this industry sees bookings from offshore end up with the tourists having the New Zealand Experience and their money arriving back in their country before they do.

Seventh, local body regulations need some common sense applied to it.

For example, Hawke’s Bay is a prime location for weddings during the months of October – April. Local bars, cafes, restaurants and wineries obviously want to provide the best service possible.

But when their opening hours and the service they can provide to the thousands of guests that come from around the country and overseas, spending millions of dollars in the region, are dictated by one or two people sitting behind a desk at the local council, who don’t take into account the hundreds of local hospitality operators telling them what they require, something is seriously wrong.

So New Zealand First is saying that if these outlets restrict their sale hours, they can nevertheless pitch their sale hours at the better time to attract custom.

We want to make the regions thrive – and having a strong hospitality industry is one way to go about doing that.

Think of it like rugby. When the provincial teams are strong, the All Blacks are strong.

The Future

In our view the real challenge facing the tourism sector is the question of quality of our products and our hospitality.

In Asia we are seeing a burgeoning and discerning middle-class emerge.

These are prosperous people who are looking to travel as their horizons widen.

New Zealand is an obvious destination for this growing group if the price and the package we offer is attractive.

But we should not assume anything.

They want to experience our wonderful scenery and environment and enjoy first class hospitality.

Quality has many aspects – safety and security is one, and so New Zealand First’s policing policy will be of interest to you. New Zealand First’s record was to increase frontline police by 1000 between 2005-08.

Our policy is to match the ratio of police per 1000 population, to the Australian equivalent.

New Zealand has a reputation for adventure tourism but we don’t want to get a reputation for lax safety.


However, why are legitimate, safe operators being whacked because of the sins of a few, and suffering the imposition of serious increased costs, putting their profitability and jobs at risk?

That said, the Wairarapa ballooning tragedy was a wake-up call for all in the tourism sector that the consequences of regulations being ignored can be very damaging.

Confidence lost, can be expensive to regain.

New Zealand needs to generate return custom, both domestic and international, for the tourism and hospitality industry to grow in New Zealand.

We will know that we have been successful in your industry when tourists leave New Zealand with one thought uppermost in their minds:

“When can I get back to New Zealand?”

ENDS


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