Government commits to package for trade, details to come

Government commits to package for trade, details to come

The Government will provide a consumer travel reimbursement scheme to assist the return of credits and refunds to New Zealand consumers via travel agents. In an announcement today, Commerce and Consumer Affairs Minister Kris Faafoi says the scheme will be funded to a maximum of $47.6 million.

Travel agencies will be paid 7.5% of the value of cash refunds and 5% of the value of credits successfully secured on behalf of customers.

Faafoi says the scheme will be established as soon as practicable, with details such as eligibility to be worked through over coming weeks.

'The travel sector and the Ministry of Business, Innovation and Employment estimate around $690 million of New Zealanders' money is locked up because of travel cancelled due to Covid-19. We want to get that money back for Kiwi customers and into the local economy as quickly as possible.The scheme we are announcing today will help those in the travel industry with financial support to facilitate the recovery of those funds. I know that travel agents and wholesalers have been working hard to recover refunds and credits owed to New Zealand consumers, but are under severe financial stress, with many facing the prospect of insolvency.'

The news comes on a day that Labour has promised a range of new small business policies, including extending the small business cash flow scheme for another three years and putting more Government money into tailored business advice and make changes to small business tax schemes.

The collective behind the Proposal for Support of the Travel Agency Sector says this is good news for our industry. 'There’s still a long road ahead but we’re pleased to be getting some much needed support in what has been an incredibly difficult time for travel agencies in New Zealand,' says a spokesperson. 'Our people have been working tirelessly over the past six months to repatriate funds from travel suppliers into the hands of Kiwis. This funding will allow us to recoup some of the costs involved in that lengthy process. While borders remain closed, there is work to be done to ensure we pull through as an industry, but this support gives us a bit of breathing room.

'We are thankful to Hon Kris Faafoi and his team for allowing us the time to explain the challenges the travel agency sector is facing right now, and of course, for working with us to come to a balanced solution. We’d also like to acknowledge Kirk Hope (CEO Business NZ) and Rob Fyfe (former CEO Air NZ and business advisor to Jacinda Ardern) who have been active in support of our proposal and thank them for their advice and guidance.'

The collective included David Coombes, MD Flight Centre NZ; Mark O’Donnell, CEO House of Travel; Malcolm MacLeod, CEO First Travel Group; and Simon McKearney, EGM Helloworld.

Meantime, the Travel Industry Suppliers Group says the support is vital to help bring back the travel funds of New Zealanders. The group's chair, Robyn Galloway of Innovative Travel, says wholesalers have had to cut costs and make staff redundant over the past six months just to stay in business.

'We make no bones of the fact the investment the Government is offering is a bare minimum,' she says. 'We acknowledge there are many calls on the public purse right now but the public good achieved by bring travellers' money home justifies government assistance. This will help to keep our industry on life support but it will not keep the industry alive in the long term.'

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