Thursday, January 15, 2009

Mixed feelings on bail-out for capital

In the story below, individual moteliers have been sought out to comment on the prospect of higher rates bills to pay for facilities based in central Wellington and the introduction of user charges at the door for non-Wellington City residents.

This commentary is interesting and significant as debating funding options for local government will be repeated in a similar vein in other areas throughout New Zealand.

Local councils are full of ex-school teachers, career administrators and socialist do-gooders that have little understanding of running a business. Unfortunately they mistakenly view accommodation businesses as major beneficiaries of ratepayer subsidised events, attractions and sports facilities based on on flawed economic multiplier assumptions. Accordingly motels are often grouped together with other "tourism" businesses that attract targeted rates.

The motel industry has a vested interest in the efficient operations of local government and needs to have a voice.

What should the motel industry be saying?

An underlying message that should be communicated to all councils is that a strong private business sector will underpin and sustain the general welfare of communities. In order to achieve this, councils should focus on minimising rates and regulatory burden.

Councils should only fund genuine public goods and services, facilitating the efficient provision of necessary infrastructure.

Councils should exit from all non-core activities.

Councils should be making a concerted effort to reduce business rate differentials.

The case for councils subsidising events, attractions and sports facilities must be supported by rigorous economic analysis that clearly demonstrates net benefits for ratepayers.

There should be a concerted effort by councils to move funding of ‘club’ goods, such as swimming pools, recreation centres, libraries, museums, zoos etc to user charges.

Hutt News
13 January 2009

The prospect of higher rates bills to pay for facilities based in the capital, or extra charges at the door for non-Wellington City residents, is not a prospect that Hutt locals are likely to greet with any enthusiasm.

It might be supposed that Hutt City accommodation providers would be more open to the idea that we could shoulder a bigger share of costs of the International Festival of the Arts, Te Papa, the zoo, etc., if those entities are cash-strapped (or WCC threatens a funding cut). But calls by the Hutt News last week indicate any move to initiate extra charges faces as much of a battle with motel/hotel operators as can be expected from any other resident or ratepayer.

Camellia Court Motel operator John McLaughlan, a former president of the Motel Association, says Wellington's bed capacity has more than doubled in the last decade. The days when Hutt accommodation providers gained good "overflow" from visitor numbers the capital couldn't handle have gone. "It's minimal (now); nowhere near what it used to be."

The people staying at Hutt motels and hotels are mostly here for business or family reasons. Sure, they might tack on day trips to visit Te Papa, the zoo and the like in Wellington but the capital's attractions are of "little benefit" in terms of gaining local motels/hotels more business.

Nevertheless, Mr McLaughlan was somewhat scathing of the Hutt Valley mayors' "huffing and puffing" over the idea of a levy or door charges even being raised. The threat to cut off water supply reminded him of the "old England versus Scotland stuff".

The stadium is being paid off via regional rates. Mr McLaughlan could see nothing wrong with charges of a dollar or two to get into the likes of Te Papa if there is a genuine funding shortfall. "After all, even when you pick up someone from the airport, you pay."

A duty manager at The Angus Inn said the hotel gets a lot of people staying there who visit Te Papa and other Wellington attractions, including Japanese students and tourist groups. But she declined to venture an opinion on whether the Hutt and outlying cities should pay more.

Dave Sorenson, at Green Gables, agrees Te Papa is a popular destination for people staying at his motel. He wasn't so sure many went to listen to the orchestra though. He too noted all of the region pays a substantial amount towards the stadium.

What he resents about Wellington seeking more money for such facilities is that the city "wastes" so much money already. "Some of their ideas are just loopy; the (Basin Reserve) flyover is just one of them." Mr Sorenson said it's one of the reasons he's dead-set against talk of amalgamation.

As well as owning Lowry Bay Homestay, Pam and Forde Clarke run a nationwide booking service for bed & breakfast accommodation. Pam says tourists who stay with them at Lowry Bay (perhaps 70% of their clientele) do visit the attractions in Wellington City. Others are here for weddings or family reasons and may also get into town.

She sees nothing wrong with charges to get into the likes of Te Papa if funding is tight. A $5 or $10 charge would still be significantly less than what it costs to visit such facilities in the UK.

Forde says rather than knee-jerk reactions, the region's authorities should sit around a table for a reasoned discussion on the issues. Wellington City has invested massively in the tourism/visitor/events industry and outlying districts piggyback "a bit unfairly" on the "fantastic reputation" that has been built up. But extra charges at the door for taxpayer facilities like Te Papa, or charges that vary according to local ratepayer status, "could be an administrative nightmare," Mr Clarke says.

"All this needs to be debated. It's a good topic for public discussion."

Source: Click HERE

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