Council Amalgamation and the Future of Tourism Funding: What It Could Mean for Hawke's Bay (and other regions)
The word ‘amalgamation’ has long been loaded in Hawke's Bay. Say it in public and you'll get either an eye-roll or someone will entertain the discussion on the pros and cons of the last attempt. Yes, we tried it in 2015. Two-thirds of voters said no and for a decade, the idea sat in the drawer marked too hard.
It's out of the drawer now, and this time, it's not optional.
On 5 May 2026, Local Government Minister Simon Watts and RMA Reform Minister Chris Bishop handed councils across Aotearoa New Zealand an ultimatum: develop your own reorganisation proposal by 9 August, or central government will do it for you. Hawke's Bay's four mayors and regional chair are already meeting this week to work out a response. The Hawke's Bay Regional Council, as it currently exists, will be disestablished in 2028 regardless.
So the question isn't really whether amalgamation happens. It's what we do with it.
It is important for us to explore this specifically through a tourism lens because the implications for how we fund, govern and deliver destination management and regional events are significant. Not just in Hawke’s Bay, but right across Aotearoa New Zealand. Right now, while the shape of any new structure is still being negotiated, there's a real opportunity to influence the outcome.
The challenge we've been living with
Tourism funding here in Hawke's Bay, much like most of regional New Zealand has been piecemeal, contested and very short-term. Hawke's Bay Tourism operates across a region where five separate councils have had different (yet competing) priorities, different budget cycles, and different appetites for investment in visitor economy activity. Until 2024, Hawke’s Bay Regional Council funded Hawke’s Bay Tourism via an economic development rate. However, in December 2024, HBRC announced it would cease funding Hawke’s Bay Tourism, requiring the organisation to pursue funding from the city and district councils to continue operating.
This new announcement of council amalgamation creates an opportunity for genuine alignment on a multi-year destination strategy, or securing committed funding for a regional event strategy, or furthering tourism product development, but it will require navigating multiple political relationships simultaneously.
The case for optimism
A single investment mandate: A unified Hawke's Bay council would (in theory) speak with one voice on tourism and economic development. There would be one Long-Term Plan, one set of funding priorities, one action plan, and one place to make the argument for sustained investment in visitor economy infrastructure, marketing and promotion, and in regional events. The current fragmentation, where Napier City Council, Hastings District Council, Central Hawke's Bay, and Wairoa all have separate tourism-related budget lines and priorities could become a single strategic conversation. Assuming this is the amalgamation grouping.
Stronger relationships with central government: One of the persistent frustrations in regional tourism is that fragmented local governance makes it harder to access central government co-investment. MBIE’s Regional Events Fund and Major Events programme, and any future visitor economy funding mechanisms have tended to favour regions that can demonstrate aligned governance and matched investment. A single authority for Hawke's Bay would be a stronger partner in those conversations, and would carry more weight when competing with other regions for national attention and funding.
Infrastructure investment and long-termism: The Government has been clear that the amalgamation drive is tied to a broader reform agenda around infrastructure, housing and resource management. A larger, better-capitalised council could theoretically make the kind of long-term infrastructure investment decisions including upgraded conference facilities, designated visitor precincts, and co-funding tourism development that fragmented councils have historically struggled to commit to.
Eliminating duplication in economic development: Currently, economic development, destination management, and events sit across multiple entities in Hawke's Bay from council organisations, regional bodies, industry groups each with their own governance and overhead. Rationalising these into a single economic development function under a unified council could free up money that's currently absorbed by administration and redirect it into actual delivery.
A national accommodation levy: There's a specific funding mechanism worth watching closely alongside the amalgamation conversation which is the proposed national bed night visitor levy. Auckland Council Mayor Wayne Brown has been a strong proponent of this solution for Auckland for several years, advocating for a 2.5 - 3% levy (aka a tourism tax on international visitors) on short-stay accommodation that could generate tens of millions annually for both destination marketing and major events. Industry support for a national levy solution, rather than a regional approach is broad; Hotel Council Aotearoa, short-stay platforms like Airbnb, and Tourism Industry Aotearoa have all signalled their support. Both the Prime Minister Christopher Luxon, and Minister of Tourism Louise Upston have been publicly positive on the topic but yet central government legislation has not materialised in this term.
The sticking point isn't really political will, it’s the structural complexity of a new 'tourism tax'. A nationally-enabled levy that flows back to regions to fund local tourism investment requires clear answers to questions that are currently very hard to answer cleanly: Which entity receives the revenue? Who governs how it's spent? How do you set consistent criteria across 78 councils and unitary authorities of wildly different size, capacity and strategic sophistication? Amalgamation doesn't automatically answer those questions but it will simplify them.
A Hawke's Bay unitary authority, with a single Long-Term Plan, a clear visitor economy mandate and the scale to run a professional destination management function is exactly the kind of body that a national bed night levy is designed to work with. The revenue-to-governance pathway becomes clear. The accountability structure exists. The risk of money being absorbed into general council operations rather than deployed strategically is lower. For regions like Hawke's Bay, this matters in a very practical way. If the accommodation levy does eventually get legislated, and there are good reasons to think amalgamation makes that more likely, because it reduces the structural complexity problem at the national level. A well-designed unitary authority would be positioned to receive and utilise that revenue in a way that five separate councils never could.
The risks worth taking seriously
I'd be doing this piece a disservice if I only made an optimistic case for amalgamation. There are real risks here and the tourism sector should be lobbying hard to mitigate them.
Bigger doesn't always mean better: The Auckland super-city experiment is often cited as the proof of concept for amalgamation. Auckland Council have claimed significant savings since the 2010 merger of eight councils, but independent analysis has found efficiency gains are difficult to verify, rates have risen substantially, and staff numbers have grown above pre-amalgamation levels. The democratic trade-off was also real; communities felt less connected to decision-making. For regions like Hawke's Bay, with its distinct sub-regional identities - the wine country vs cultural identity vs rural remoteness, that risk is genuine.
Community boards and decision-making speed: Any amalgamated structure that covers the full Hawke's Bay region will almost certainly include community boards, particularly given the political imperative to protect local voice in areas like Wairoa and Central Hawke's Bay. Community boards can be a positive accountability mechanism but they can also become additional layers of sign-off, consultation and delay. For time-sensitive commercial decision making such as responding to international event bids, to activating a marketing campaign, to product development investment, a more complex governance architecture could introduce a decision lag that costs us bids and opportunities. The commercial divisions within amalgamated councils must be able to move with agility and speed.
The funding withdrawal risk: The government's track record of increasing funding following structural reform is mixed. There is a plausible scenario in which amalgamation is used as justification for reducing central government co-investment in tourism and economic development, on the grounds that a new unified council now has the scale to do more with less. We should watch carefully for any signals that the Government's ‘efficiency narrative’ is being used to rationalise pulling funding, rather than to unlock it. We have already seen this in health and education in this term of Government.
The transition period: Even if the end state is better, the transition will be genuinely disruptive. Amalgamation decisions will likely be made by the end of this year, detailed planning in 2027, implementation before the 2028 elections, that's a hugely compressed timeline for what needs to be delivered. During any significant organisational transition, discretionary budgets get squeezed, strategic initiatives stall, and staff capacity is often absorbed by process rather than delivery which can occur for years. For tourism, that could mean several years of diminished capacity at exactly the moment the region needs to be investing in its long-term visitor economy proposition.
What the sector should be doing right now
The three-month head start window closing 9 August 2026 is not just a governance exercise for elected officials, it's a live consultation on the future shape of the institution that will govern tourism investment in this region for decades.
The visitor economy sector in Hawke's Bay needs to be in those conversations right now. Specifically, I'd be arguing for three things:
Advocating for protected tourism investment in any transition design: Any amalgamation proposal coming out of Hawke's Bay should include explicit provisions for maintaining destination management and regional events investment through the transition period and into the new structure. This means advocating for a dedicated visitor economy function, ring-fenced funding, and the Long-Term Plan commitment that survives the structural change. This matters even more if national accommodation levy legislation advances as a region without a clearly designated tourism function has no credible claim on that revenue.
Make the case for business events while the structure is still being designed: The moment to argue for a dedicated Hawke's Bay business events function with committed funding, the right governance model, and a genuine mandate is now, before the new council's priorities are locked in. The question is whether the political will to fund it can be secured before the transition settles.
Push for community boards with a tourism mandate, not just a local voice mandate: If community boards are coming (and they almost certainly are) the design of those boards matters. Tourism is too often treated as a city or district council function, invisible to sub-regional governance. Getting tourism outcomes built into community board purposes and reporting requirements would be a meaningful structural win.
The Bigger Picture
Council amalgamation in Aotearoa New Zealand is happening. It may or may not be well-designed. It may or may not deliver the efficiency gains its architects are promising. What is clear is that the decision-making architecture for regional tourism is about to change fundamentally and the sector has a window right now to shape that architecture.
Hawke's Bay's tourism proposition; wine, food, art deco, culture, adventure, and an increasingly compelling regional events story is strong. The funding structures that support it have never matched that strength. Amalgamation, done well, is a once-in-a-generation opportunity to change that.
The question is whether we're at the table, or waiting to find out what was decided for us.