Industry Confidence Slumps Further… Call for tax Reforms, More Skilled Workers

Growing concern over the strong Australian dollar, labour problems and taxes are among the key factors behind a sharp decline in sentiment among tourism operators.

This is according to the latest TTF-MasterCard Tourism Industry Sentiment Survey.

The survey shows that sentiment has fallen to levels not seen since the global financial crisis, with the exchange rate by the far the number one business impediment facing tourism operators.

Tourism & Transport Forum chief executive John Lee (pictured) said the strong dollar is having a double impact.

“83% of tourism executives identified the exchange rate among the top three business impediments facing Australia’s tourism sector,” Mr Lee said, “up from 61% in the last quarter, as Australians travel overseas in record numbers and the buying power of international visitors is reduced.”

“While the dollar is a function of the relative strength of the Australian economy, if it remains high it will further exacerbate our tourism trade deficit, already more than $5 billion a year.”

However, Mr Lee said the dollar is not the only factor concerning tourism operators.

“There has also been a sharp rise in concern over the shortage of skilled labour, with 30% of executives ranking it in the top three business impediments, compared to just 13% in the previous quarter,” Mr Lee said. “Especially in regional areas, tourism operators are having trouble finding and retaining skilled staff as they cannot compete with the wages being offered by the mining sector.

“While we welcome the extension of the Pacific Seasonal Worker Pilot to allow tourism businesses in Broome to employ staff from East Timor, we are urging the government to consider expanding the pilot to North Queensland as soon as possible and also to consider it for other regional areas, including the Northern Territory.”

Mr Lee said respondents are also concerned about the impact of taxes on tourism.

“As a service industry, tourism is labour-intensive, so payroll tax was the number one issue,” Mr Lee said. “Location is also a key factor for tourism businesses, so land tax is the next highest concern for tourism operators, followed by the passenger movement charge. These issues are at the top of the tourism industry’s agenda ahead of the federal government’s tax summit next month.

“In addition, with the carbon tax legislation currently before parliament, the survey has found that concern over its impact on tourism businesses remains high, with three quarters of respondents expecting it to have a medium to high impact on costs and rates, and two thirds expecting it to have a medium to high impact on their competitiveness. This indicates a challenge for the government in addressing the fears of tourism operators about the impact of the carbon tax on the sector.

“TTF is advocating assistance for the tourism and travel sector to make the transition to a low carbon economy, including investment incentives and accelerated depreciation schedules for furniture, fittings and equipment.”

Giving New Zealanders a discount on Australia’s departure tax would encourage more of them to come to Australia more often, helping to boost international visitation to Australia, said Mr Lee. He said he would like to see the passenger movement charge halved for visitors from across the Tasman.

“We want to introduce mates’ rates for Kiwis,” Mr Lee said, “to entice more New Zealanders to come to Australia by giving a 50 % discount on the PMC. At almost NZ$60, the PMC is a significant additional cost to visiting Kiwis which can account for more than a third of the total ticket price for a flight between Australia and New Zealand.”

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