Calls to recycle $15.7 million in aid declined by tourism operators
The Government is under pressure to redistribute close to $16 million in aid refused by tourism operators.
Some of those offered help decided they didn’t need the money after all, or couldn’t afford to take on more debt in the form of loans.
Last year’s tourism rescue package gave $270m in grants and loans to key businesses via the strategic tourism assets protection programme (Stapp), which is now the subject of an inquiry by auditor-general John Ryan who is looking into the application process, including the decision to award large sums to three major businesses before formal applications opened.
The Ministry of Business Innovation and Employment (MBIE) confirmed that as of late November five parties, which it is not naming at this stage, had chosen not to use $14.2m in loan funding, and three had declined grants worth $1.5m.
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AJ Hackett Bungy, which was controversially awarded the largest loan of $5.1m and a grant of the same amount, told Stuff it had not yet made a decision on whether to use the loan facility.
In total, $203m of the Stapp package was in loans, and because businesses have until the end of March to decide whether to take them up, there is potential for a substantial amount to be available for “recycling.”
Lawyer Andy Glenie represents a group of tourism operators who requested the auditor-general’s intervention, and he said the $15.7m should immediately be reallocated, a move which is also supported by tourism industry bodies.
“We’d expect Government Ministers and the ministries that advise them to come up with a sensible, fair and transparent scheme that would allocate that money in an efficient way to people who need it the most,” Glenie said.
“Waiting for the auditor general’s report won’t help the businesses who’re struggling now, they’ve had their summer holiday period and are looking at a very long cold winter, and they’re saying they need support right away.”
Tourism Minister Stuart Nash said he was awaiting the auditor-general’s review and the Stapp fund would not be re-opened.
“I’m talking to the Minister of Finance and others, including representatives of the industry, local government, iwi, and the tourism workforce, about potential next steps. However, no decisions have been made.”
Tourism Industry Aotearoa chief executive Chris Roberts, who met with Nash after his media appearance, said that while he could not comment on what was discussed, “it was a positive meeting and the minister is aware of the immediate challenges facing many tourism businesses.”
Roberts wants unallocated Stapp funds funnelled into a new 2021 tourism package, and he is still keen on a Travel Card loaded with cash to stimulate domestic travel.
The Tourism Export Council, which recently requested a further $200m in support, is also pressing for the Stapp money to be reused as soon as possible, and chief executive Lynda Keene has warned that many businesses could simply disappear in six to nine months if the border remained closed.
Adventure Group Ltd managing director Stefan Crawford did not apply for Stapp funding last year because he did not believe he met the criteria, and he would welcome the opportunity to get some of the aid money others had declined.
On Thursday he announced plans to hibernate his Canyon Explorers business until next summer because of the expected drop in visitors to Queenstown over the coming months, and uncertainty around a Trans-Tasman bubble.
Crawford said grant money would have helped with training and retaining key staff, and he could have avoided selling off critical assets such as buses and vans.
“That money would be massively welcome.”
Additional reporting by Debbie Jamieson