Govt extends hotel building scheme

Press, 22 October 1986, Page 9

Govt extends hotel building scheme

PA Wellington The Government had extended its hotel construction incentive scheme to include all large hotel projects throughout New Zealand, said the Minister of Tourism, Mr Moore, yesterday. All new projects larger than 100 rooms would receive during the first year a grant equal to 10.5 per cent of the project’s taxation-measured depreciation. The grant would be in lieu of depreciation for that year. The scheme does not apply to construction projects already under way. The incentive previously applied only to pro-

jects of more than 200 rooms in Auckland, Wellington, Christchurch and Queenstown. The original scheme was due to end on January 1, 1987. The extended scheme will run until Mardh 31, 1988. Mr Moore said the scheme extension would give the hotel and construction industries a big boost. There would be a "huge spin-off effect through the economy, especially to materials and services suppliers,” he said. “Some development plans in smaller centres will now become more attractive,” he said. There were 12 main

hotel projects under way throughout New Zealand, with another 26 planned. “These are worth about $ll4O million, and will provide an extra 7620 rooms and more than 20,000 construction jobs,” he said. Tourism was the "No. 1 growth industry" with a predicted annual average growth of 7.8 per cent until 1991. Mr Moore said the scheme gave projects money they would have received in depreciation in a few years’ time. “This brings the cash forward so that they can get started more quickly," he said.