NZ Launches Sector Review to Cut Red Tape and Revive $15.7 Billion Hospitality Industry

Minister Seymour emphasised that the Ministry for Regulation is uniquely positioned to tackle regulatory inefficiencies that span across multiple departments.

New Zealand’s hospitality industry, employing around 145,000 people and contributing $15.7 billion to the national economy, is set to undergo a comprehensive sector review, the government has announced. This initiative, spearheaded by Regulation Minister David Seymour and Tourism and Hospitality Minister Louise Upston, will scrutinise the wide range of regulations that currently apply to businesses like restaurants, cafes, bars, hotels, catering services, food trucks, and market stalls.

The review, which is expected to take six months, will be conducted by the Ministry for Regulation and aims to eliminate unnecessary and burdensome rules that hinder growth and innovation in the hospitality sector. It will focus on identifying and addressing regulatory challenges that affect operators and customers alike—while excluding gambling regulations from its scope.

Red Tape Choking Recovery Post-COVID

Minister Seymour emphasised that the Ministry for Regulation is uniquely positioned to tackle regulatory inefficiencies that span across multiple departments. “The Ministry for Regulation is in a unique position to address regulatory costs that make it harder for Kiwis to get affordable services. Because these regulations are imposed by so many departments, it takes one ministry with a mandate for cutting red tape and fixing things,” he said.

Seymour pointed to the heavy impact of the COVID-19 pandemic on the sector, noting that hospitality businesses are still struggling to recover due to a mix of inconsistent, outdated, and illogical rules. “Hospitality is a sector which was hit hard by Covid. Red tape and dumb rules make it hard for the industry to bounce back. Every Kiwi has a café or bar they wish was still open,” he added.

Real-World Examples of Regulatory Frustration

Several examples highlight how regulatory confusion and inconsistency are affecting business operations across New Zealand:

• Alcohol Licensing Confusion: In some areas, business owners must secure both an alcohol license and a resource consent just to allow patrons to enjoy a drink outside. In other parts of the country, only an alcohol license is required, causing disparities and confusion.

• Nonsensical Hotel Restrictions: Current regulations allow a hotel guest to purchase a glass of wine at the hotel bar but prohibit them from taking the same glass to their room. Paradoxically, the same guest can legally purchase and consume a full bottle of wine from a supermarket in their room without issue.

• Food Truck Burdens: Food truck owners are bearing the brunt of disproportionate compliance costs. One food truck operator reported paying over $900 in paperwork fees and inspections just to attend a single event, all mandated by local councils.

These issues, according to Seymour, “just don’t make sense” and are indicative of a regulatory system in urgent need of reform.

Championing Change for a Major Economic Player

Tourism and Hospitality Minister Louise Upston also voiced strong support for the review, stressing the industry’s importance as one of New Zealand’s largest earners and job creators.

“New Zealand’s hospitality industry has been facing many challenges and complex rules and unnecessary regulations are making it even more difficult for one of our biggest earning industries to reach its full potential,” said Upston.

She highlighted that both new entrants and existing operators are burdened by the current regulatory framework. “We need to give our business owners the best chance at success. The current regulations act as a significant barrier for new businesses to open. Existing businesses are also struggling with these rules and regulations,” she said.

The review will aim to simplify compliance, reduce operational costs, and strike a balance between managing public risk and supporting business growth.

A Call to Action: Public Submissions Welcome

The government is calling on hospitality business owners, workers, patrons, and stakeholders to participate in the review process by sharing their personal experiences with red tape and regulatory barriers.

“We want to hear about red tape getting in the way,” Seymour urged. Contributions can be submitted via the official Ministry for Regulation portal for the Hospitality Sector Review (Note: hypothetical link).

The review findings will be reported back to the responsible Ministers along with policy recommendations designed to create a more coherent, supportive, and responsive regulatory framework for New Zealand’s hospitality landscape.

As Minister Upston put it, “I look forward to working to get hospitality back on the table.”