The tourism industry has reacted with outrage at the National Commission of Audit’s recommendation that the government halve funding to Tourism Australia.
Instigated by Joe Hockey on October 22, the review aims to identify areas of waste within the federal government. The final report was released last week and included money for Tourism Australia to be cut in half, threatening the $185 million the body receives annually from the government. The report instead recommends only international advertising from the body and more cash from state governments for localised promotions.
The report states: “While tourism is one of Australia’s main exports, most of the benefits of tourism accrue to the tourism operators. There is no clear reason why significant funding should be provided to tourism above other Australian export industries.” It also recommends a significant reduction of the AusTrade program and the end of tourism industry grants.
Tourism and Transport Forum chief executive Ken Morrison branded the recommendation as a “dumb idea”. He stressed Tourism Australia’s valuable contribution to the economy, worth $42.3 billion in direct GDP each year.
“Tourism Australia is recognised around the world as one the most effective national tourism marketing bodies and must remain a statutory body governed by experts.” The industry now supports 900,000 jobs and 280,000 businesses, with international visitors spending $80 million across Australia every day.
“The Australian government has identified tourism as one of Australia’s key economic strengths,” he said. “This recommendation flies in the face of this growth strategy.”
The Tourism and Transport Forum called for budget increases after figures revealed that international tourists spent almost $29 billion in Australia last year, a rise of 6% on 2012. “A strong visitor economy will create even more employment and investment opportunities in a number of sectors including accommodation, hospitality, retail and entertainment,” Mr Morrison said.
Tourism Accommodation Australia has called on the government to reject the Commission of Audit’s recommendation to make major cuts to Tourism Australia. “The tourism and hospitality sector has been consistently identified as one of Australia’s principal growth industries for the future, with the capability of employing thousands of new workers, generating significant foreign income, and producing a strong flow of tax revenue for the government it would be very short-sighted if the Commission of Audit recommendations were to be adopted,” said managing director of TAA, Rodger Powell.
“Destination marketing has become highly competitive and sophisticated in recent years and Australia is already significantly outspent in our principal source markets. There are major tourism infrastructure projects being planned around the country, and to justify these projects we need to build our market share, which can only be achieved by a well-resourced and professional national tourism body. This responsibility can’t be devolved to states, people generally come to Australia, not one state.
“Tourism Accommodation Australia members call on the government to reject the Commission of Audit recommendations, and keep on the path that they have commenced under Andrew Robb’s leadership. In fact, we call on the government to do the opposite of the recommendations and increase Tourism Australia funding so as to capitalise on the recent free trade agreements. If jobs and revenue are the key priorities of the government, to cut back the tourism and hospitality sector would be a counter-productive move.”
Chief executive officer of the Accommodation Association of Australia, Richard Munro, reiterated the opposition to the recommendations. The accommodation industry is strongly opposed to the recommendations in the National Commission of Audit report that funding for Tourism Australia should be halved and that Tourism Australia should be consolidated in the Department of Foreign Affairs and Trade.
“These recommendations have come as a shock to the accommodation industry and if implemented, have the potential to risk private-sector investment in our industry. The accommodation industry is against any cuts being made to Tourism Australia and it strongly supports the retention of Tourism Australia in its current form.
“We call on minister Robb to confirm these recommendations will not be realised.
“The tourism industry is one of Australia’s largest and most important industries and it directly employs 543,600 people. Any cut to the funding of Tourism Australia and/or consolidating it into the department would severely damage Australia’s ability to compete with other nations for the international tourism dollar, particularly as other lower-cost destinations in Asia are investing significantly in tourism marketing.”