Summer festivals (would you believe?) are vital for the economy and it’s up to taxpayers to carry much of the risk

Three Ministers have been making spending announcements, although the most distinctive element of one announcement that captured our attention – committing taxpayers to carry much of the risk for summer festivals – was the absence of dollar signs.

Nope, dear reader.  Not one measure of the potential cost, whether or not it might be a wild estimate.

The PM meanwhile was doing her thing as leader of APEC, kicking off the fully virtual APEC 2021 Leaders Week, where political, business and young leaders come together for a series of events that conclude New Zealand’s host year.

The week will end with the PM chairing the APEC Economic Leaders’ Meeting where the 21 Leaders will gather (again they will do this virtually) to discuss the ongoing management of COVID-19 and further regional trade and economic cooperation between member economies.

This meeting will focus on charting a path to recovery from the once-in-a-century Covid crisis, Jacinda Ardern said.

She reminded us of some of the accomplishments of New Zealand’s hosting year, noting that APEC economies have:

  • agreed to help speed up the flow of vaccines and related goods across borders and reduced their costs;
  • agreed a five year programme of work on economic reforms that will kick start growth, create new jobs and help combat climate change;
  • laid the groundwork for a voluntary standstill on fossil fuel subsides – hundreds of billions of dollars are spent every year on subsidising fuels that harm our environment;
  • agreed to lock in digital and paperless customs procedures, saving business significant time and cost by removing requirements for physical paperwork; and
  • set a new roadmap to guide efforts to boost food security over the next ten years.

But let’s check out what Ardern’s Ministers were doing while she was being the leader of APEC.  We found three of them spending our money (or money that has been borrowed), but only two of them detailed the sums involved. 

Economic and Regional Development Minister Stuart Nash announced an Events Transition Support Scheme designed to give festival organisers greater confidence to plan and incur costs, in the face of public health risks from COVID-19.

He spoke of providing “financial security” for big summer festivals to proceed in face of COVID-19 threats.

Under the deal:

  • The government takes the lion’s share of risk for upfront costs that can’t be recovered
  • The offer is open to paid, ticketed events with audiences over 5,000 requiring vaccination certificates

“Organisers of large-scale summer festivals have to make decisions now about whether to proceed as their risk window is closing. There aren’t insurance options in the market to cover this so the government is stepping up as a type of underwriter,” Stuart Nash said.

“Under the scheme the government will cover 90 per cent of unrecoverable costs for paid, ticketed events with audiences of more than 5,000 vaccinated people, if organisers are forced to cancel or postpone due to COVID-19 public health measures.”

Nash recognised that the organisers of these festivals “are great entrepreneurs” who “take a lot of risk to deliver fantastic experiences that are part of the cultural fabric of a Kiwi summer and create lasting memories”.

But the government wants to heap more of the risk on taxpayers because COVID-19 has had made the entrepreneurs’ job even harder “and these grants recognise they need our support if summer events are to go ahead.”

Curiously, he also said:

“Big summer events are crucial for our economic and social wellbeing”.

Really?

By that measure, we wonder where primary exporters sit in the government’s considerations.

In two other statements, taxpayers are being told how much is being spent.

First, five Auckland suburbs are getting a major Government housing boost from the Housing Acceleration Fund, enabling up to 1,260 additional homes on top of the 2,500 additional homes that have already been supported by Government funding.

Housing Minister Megan Woods said $282 million will be spent on Large Scale Projects (LSPs) in Mt Roskill, Mangere, Tāmaki, Oranga and Northcote, in Auckland’s first big chunk of Housing Acceleration funding.

The press statement reminded us that the $3.8 billion Housing Acceleration Fund announced in March has so far allocated  $136 million “to unlock capacity for an extra 2000 homes in Porirua”.

More information on Large Scale Projects is here.

Second, the Government has committed an extra $600,000 in funding to support driver licensing and education programmes in rural communities across the country.

The funding, provided by the Ministry for Primary Industries (MPI), will be spread over three years to boost the Waka Kotahi Community Road Safety Fund. Waka Kotahi will use the funding to partner with community providers to deliver rural-focused driver licensing and education, which will include free driving lessons. The aim is to help people to get jobs in the food and fibre sector and learn how to drive safely.

“Everyone deserves the chance to have the independence that comes with obtaining a full driver’s licence, and the job opportunities this can provide,” Damien O’Connor said.

Latest from the Beehive

Summer festivals get government backing

New financial support will give organisers of large summer festivals greater certainty to proceed, with the government to shoulder the lion’s share of risk during planning stages.

Government steps in to fund infrastructure for Auckland housing

Five Auckland suburbs are getting a major Government housing boost from the Housing Acceleration Fund, enabling up to 1,260 additional homes on top of the 2,500 additional homes that have already been supported by Government funding.

Prime Minister to chair APEC Leaders Meeting

Prime Minister Jacinda Ardern has today marked the beginning of the fully virtual APEC 2021 Leaders Week, where political, business and young leaders come together for a series of events that conclude New Zealand’s host year.

Government backs rural driver licensing support programme

The Government has committed an extra $600,000 in funding to support driver licensing and education programmes in rural communities across Aotearoa.

2 thoughts on “Summer festivals (would you believe?) are vital for the economy and it’s up to taxpayers to carry much of the risk

  1. Having nationalised the motel industry and the media, the government now has its sights set on music festivals. I guess Ardern will be DJing at one of them.

    Liked by 1 person

  2. “There aren’t insurance options in the market to cover this so the government is stepping up as a type of underwriter,” Stuart Nash said.
    That is because insurance companies are not stupid enough to cover events that could be subject to the influence of a government that makes laws on the hoof.

    Liked by 2 people

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