It’s about the spending as much as the funding

Last March I expressed my views here on calls to add more charges in various forms to parks and their facilities, and particularly on differential charging for tourists.

Recently this topic has been refreshed in media. It might be because the NZ Tourism Industry Association (the main association of subscribing businesses who charge tourists for experiences) having released a report arguing that there should be more privatisation in the operation of public assets, and suggesting more money should be raised directly from their users. The report is announced here, which includes a download link for a 24 page executive summary.

Here’s some more random and recent coverage on the topic, all from Fairfax: Kiwis risk losing an ‘unalienable right to wild places’ (23 Dec 2016), Dominion Post Editorial (27 Dec 2016) – Yes to a tourist tax, Tramping group fights plans to charge tourists for using Great Walks (30 Dec 2016).

Great Walks have been singled out in the popular media discussion, with much made of the point that Great Walks “lost” around $3 million last financial year. The Tourism Industry argues that DOC runs them inefficiently, and that much could be gained with forms of privatisation.

In my March 2016 post I’ve already expressed most of my views and reasoning around charging for access. On the Great Walk thing, I’d just add that since their inception, Great Walks were never intended to make a profit. There are multiple intents with Great Walks, but part of their purpose was to attract the masses of visitors to a few very specific places where so many people could be more easily managed.

It’s safer, and often more enjoyable, for people with lower skill and experience levels. At the same time much of the visitor pressure is lifted off the rest of the network. If costs get too high, there’s a higher incentive for people to disburse through all the other random places which are harder for DOC to predict and preempt their management for higher visitor numbers. That’s especially a risk when everyone’s so easily trading secrets in the internet forums and back rooms of backpackers about the best next place to go which authorities haven’t yet caught up with.

It should be about the spending

Something I didn’t address in my previous post is that I think much of this discussion is being misguided from the start. Reports and discussions and social media threads are mostly considering methods of funding DOC, or funding the Conservation Estate if not DOC. Maybe it’s about whether there should border taxes or entry fees or conservation passes or increased facility fees. Anything to make up for the lack of public funds which we’re providing! Talking about funding sources, though, doesn’t actually address the question of how much money is needed, nor what we could expect from it.

My own view is that New Zealand’s issues, at least when it comes to spending, are largely about how much we, as a population, value the land and what’s in it.

The exact number depends on detail, but somehow we’ve come to decide that the Conservation Estate is around $380 million/year, give or take. That’s how much DOC spends combined on saving birds, maintaining recreation facilities, protecting plants, advocating for the environment, paying all its staff, and whatever else it does. Most of its spend comes from Crown Funding, and about $40 million of its spend comes from elsewhere. (Hut tickets, sponsorship, concession fees, etc.)

Compare Conservation’s ~$380 million spend with rough numbers for a few other annual spends of the government. Public Health gets around $14.7 billion. Education and Tertiary Education get about $5.5 billion combined. The Defence Force gets about $2 billion. Each of Police and Locking People Up (Corrections) are around $1.5 billion. Social Development costs about $1.9 billion, although the Benefits and Super it pays out adds another $20 billion. Transport is about $2.1 billion. Collecting Tax (Revenue) costs us almost $700 million.

I find this public conversation that’s being fostered about funding sources to be odd. The fact that we’re having the conversation seems to imply that many of us actually care about managing the conservation estate well, yet for something that’s so small on the spending radar when it comes to the annual government budget, it seems so uncommonly difficult to simply value it higher in the context of what’s around it.

Maybe the current spending amount is appropriate, but in the conversation that’s being had, few people are referring to whether it’s appropriate. Instead, people are arguing about how to raise scraps of user-pays revenue around the edges, largely by adding new layers of bureaucracy to the system to make “someone else” pay money when they use stuff, or enter the country, because for some reason external sources of revenue are being touted as the only rational option.

The framing of the conversation is risky, because any conclusions mightn’t result in what people expect. Merely considering funding sources does not guarantee that spending will actually increase if new external funding sources are found. One person’s additional funds for pest control, or for flying sewage out of Great Walks, is another person’s tax cut. DOC could end up raising hut fees, yet still be spending exactly the same amount as a consequence of crown funding being pulled to match.

In the midst of the annual government spend, finding the money shouldn’t be a problem if there’s reason to believe that people actually care enough to be willing to spend $700 million (another made up number) instead of $380 million. Maybe it comes from adjustments to budgets of other things people care about less. Maybe it’s from offsetting spending on other things to later times. Maybe it comes from tax increases, or simply not lowering tax. Maybe it comes from borrowing. Maybe it comes from fewer flag referendums. Unfortunately the appropriate level of spending, or what to expect from it, isn’t significant in the debate.

Maybe once we’ve collectively figured out how much we value the conservation estate, what we want, and how much DOC and other organisations should be spending annually to carry out those objectives, it’d be reasonable to talk about whether tourists can be tapped as another source of revenue.

Happy New Year!

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