Transcript
MARK BROWN: It's really reflected in the tax take in terms of VAT, in terms of income tax and in terms of company tax that's been registered over and above what we estimated in our budget. The tourism boom has also been fuelling construction and building, with the last number of small scale holiday homes being constructed and existing accommodations being upgraded or expanded so there's been a flow on effect. We waiting to see what the numbers stack up for the remainder of this calendar year and if it looks like the numbers remain the same, then we can expect these levels of visitor arrivals to be sustained throughout the next year or so. At the moment we're looking at is a bit of a windfall but there is the real distinct possibility that this is significant and a sustainable growth in numbers.
DON WISEMAN: It's a remarkable situation because you would say I'm sure, that things have been tough for a long number of years, in terms of governments trying to get through with their various expenditure pressures.
MB: yes they have been tough, we've been very good in terms of the fiscal management but I think in terms of tourism, airlines have had a tough number of years fuelled by the high price of fuel. We've seen those fuel prices drop and we've seen airlines take advantage of this, we've seen a number of airlines record some significant profits in the last year, Air New Zealand, Fiji Air, also Air Tahiti. So they've all benefited from this drop in fuel price, people are travelling, that's fuelling the government's ability to be able to take on more significant projects, we've got significant water, infrastructure upgrades that are being undertaken. We're looking at sanitation as another important piece of infrastructure for reticulated sanitation systems to preserve the integrity of our lagoon and the environment and we've got other investments coming on board such as the submarine cable for increased connectivity, all of this economic activity is allowing the government a bit more fiscal space to be able to commit to these significant infrastructure upgrades.
DW: You are going to need more accommodation and there are problems there aren't there?
MB: Yes, well in the last I guess, about 800 extra beds have been added to the inventory on the island and like I said a lot of this is existing homes that have been converted to holiday homes, it's people making investments on their own land, it's a lot of grassroots type expansion in number of beds and number of rooms and it's great to see because the benefits are flowing straight back to the grassroots small scale operators there is scope for more major investment now, the appetite for investment, coupled with this increase in visitor arrivals and demand for rooms is setting the environment for some good significant investment.
DW: Yes and there has been a lot of talk hasn't there of the need for people to be kept there longer and to spend more rather than to go for numbers, go for quality.
MB: That's right, yields are very important that's really where the benefits come in and if we can get visitors to spend a bit more money, while they're here in terms of food, accommodation, tours, shopping and that sort of thing then it helps keep some of that revenue here in the country.
DW: One of big things in terms of boosting the government's coffers has been the Air New Zealand underwrite you've had to pay out a whole lot less this year.
MB: That's right, on the back of strong numbers, coming through from Australia and also from North America, coupled with the low fuel prices that have factored into the subsidy, this year's payment has been significantly less than what we've estimated, and what we've budgeted for, less than half, I would expect.
