WCC funding of Te Papa

The Wellington City Council is consulting on its long-term plan, and one of the things they have proposed is cutting funding for Te from $2.25m to $1.0m. This is a very stupid thing to do in my opinion.

Before I get to the substance, a note on process. The City Council only told Te on the day of their Council meeting that they were proposing a funding cut of 56%. That borders on incompetence. You don’t pull surprises like that on institutions without warning. There should be regular communication on issues such as funding.

Now why is the Council trying to cut funding by 56%? It is because they are spending too much money elsewhere, and are trying to keep rates from increasing too much. I support keeping rates down, but the problem is not the long-standing funding to Te Papa, but all their new spending projects.

A issues is that 70% of the Te funding does not come from residential ratepayers but from the Downtown Levy. This is a levy on basically tourism businesses such as hotels, restaurants, bars and the like.  The tourism sector are perfectly happy paying this levy. In fact they are up in arms that the Council is proposing a reduction. What the Council in fact is trying to do is to spend the Downtown Levy on Council spending rather than Te Papa which generates an economic return.

How big an economic return do Wellington businesses get from having Te in Wellington?

An economic assessment by Market Economics calculates a contribution to Wellington of $91m a year.  50% of all visitors to Wellington visit Te Papa. On average there are 560,000 international visitors a year. 14% of domestic tourists and 4.7% of international tourists cite Te as the main reason they came to Wellington. This represents a tourism spend in Wellington of $58.9m.

You can see why tourism businesses are so happy to pay the levy, and are pissed off at the Council for cutting it.

At an absolute minimum the Council must keep the $1.575, funding from the downtown levy going.

Is there a case for the other $675,000, which comes from ratepayers? Well 450,000 of Te Papa’s visitors are from within Wellington Region. It is used extensively by locals. But further because Wellington is lucky enough to have Te here, we probably spend less on other galleries and museums.

The WCC spends $8.4m on museums and galleries (excluding Te Papa) which is $18.72 per person in the region. If one includes the other Councils, it will be more, but not massively so as most of the institutions are in Wellington City. Auckland Council spends $56.2m which is $37.82 per person in their region. I think Wellington ratepayers do pretty well out of the $675,000 they are being asked to fund Te Papa.

So I hope Councillors do the right thing and reverse the spending cut. Not because I am against spending cuts. But because Te brings in a huge amount of tourism revenue, and cutting tourism spending is a false economy.

What is interesting is that almost all the Councillors generally seen as on the right are against cutting Te Papa’s funding – because they understand that economically it is a silly thing to do. The Councillors who have been voting in favour of cutting the funding have generally been from the left – including the three Green Councillors (including the Mayor). Is it because the Greens want less tourists to come to Wellington as it is “bad” for the Environment?

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