The Auditor-General will carry out an inquiry into aspects of the government’s Strategic Tourism Assets Protection Programme (STAPP).

While STAPP, created to protect New Zealand’s core tourism assets during the border closures caused by Covid-19, has been a lifeline for some businesses, concerns have been raised about the eligibility criteria, application process, and whether the distribution of the $400M fund has been equitable.

Some southern tourism operators wrote to the Tourism Industry Authority and Ministry of Business, Innovation and Employment (MBIE) last year complaining about elements of STAPP.

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One operator, who wished to remain anonymous, told the Wanaka App they were misled by the early allocation of STAPP funding to large operators, such as Queenstown’s AJ Hackett Bungy which controversially received $5.1M.

Lake Wanaka Tourism general manager Tim Barke said STAPP funding was put together as a rapid response to help the tourism industry survive, and “as with any emergency response, more is often learned over time as to how it could be improved...”

A number of southern operators received a STAPP boost, including Air Milford ($500,000), Doubtful Sound Cruises ($500,000), Fiordland Expeditions Ltd ($500,000), Jucy Cruise ($500,000), Milford Sound Tourism ($500,000), Real Journeys Milford Sound ($500,000), Southern Discoveries ($500,000), Stewart Island Ferry Service ($500,000), TSS Earnslaw ($500,000), Te Anau Glowworm Caves ($500,000), Te Anau Helicopter Services ($500,000), Totally Tourism ($500,000), Transport World ($500,000. Thirty-one regional tourism operators (RTO) also received funding through the STAPP programme including Destination Fiordland ($400,000) and Great South ($700,000).

“Because of the concerns we have heard, the amount of public funding involved, and the importance of robust processes to ensure public trust and confidence is not eroded, we have decided to carry out an inquiry,” Auditor-General John Ryan said.

He said his office will examine how applications from tourism businesses have been assessed against the programme’s criteria; look at the information available to applicants about the programme’s eligibility criteria and assessment process; look at how applications from tourism businesses have been assessed, including three businesses that received funding approval before the formal application round began; and consider whether there is any evidence that applications have been assessed inconsistently.

He said his office will not be examining the merits of individual applications or particular funding decisions.

Minister of Tourism Stuart Nash said the inquiry was expected after a number of unsuccessful applicants, and others who did not apply, raised concerns.

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“It is a good idea to have an independent set of eyes on the programme. I am open to this external scrutiny. The Auditor General is the right person to do this,” he said, adding he was open to hearing recommendations for how to change processes in the future.

“I’m sure there are things that can be learned, to improve future decision-making, and I look forward to seeing the outcome of the inquiry,” he said.

“In the first wave of Covid-19 we took a ‘no regrets’ approach to decisions about economic support. It was important to get money out the door, fast, to support jobs and businesses. We knew our support would not save all tourism businesses, and it was not designed to do. It was designed to shore up our key tourism assets, to bide time till borders could be safely opened once more,” he said.

He said ministers said at the time that, like the Wage Subsidy, the STAPP operated on a high trust model.

By Sue Wards, The Wanaka App

Republished by arrangement

Background

The Government established the Strategic Tourism Assets Protection Programme in May 2020 as part of a recovery package to address the impact of Covid-19 on the tourism sector. The purpose of the Programme was to provide funding support for strategically important tourism assets that contribute significantly to their local region and to tourism in New Zealand.

A group of Ministers, called the Tourism Recovery Ministers Group, were responsible for making decisions under the Programme, including setting the eligibility criteria.

Before the start of a formal application round, the Tourism Recovery Ministers Group approved funding for three tourism businesses. The subsequent formal application round was open for two weeks, and decisions about all applications were made by the end of July 2020.

More than $290 million has been committed to the tourism sector through the programme.

Concerns about the programme have been raised, with several tourism businesses questioning the clarity and transparency of the programme’s criteria and whether they were applied consistently.

Because of the concerns, the amount of public funding involved, and the importance of robust processes to ensure public trust and confidence is not eroded, the Office of the Auditor-General has decided to carry out an inquiry.

The inquiry will look at:

●    the information available to potential applicants about the Programme’s eligibility criteria and assessment process;

●    how applications from tourism businesses have been assessed, including the three businesses that received funding approval before the formal application round began;

●    whether there is any evidence that applications have been assessed inconsistently; and

●    any other related matter that the Auditor-General considers it desirable to report on.