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Joint Standing Committee on Treaties
11/05/2015
Treaties tabled on 3 and 5 March 2015

MAHONY, Mr Tim, Government and Media Relations Manager, Tourism Australia

MASON, Mr David, Executive Director, Treaties Secretariat, International Legal Branch, Department of Foreign Affairs and Trade

WOJCIECHOWSKI, Mr Paul, Assistant Secretary, Economic Advocacy and Analysis Branch, Trade, Investment and Economic Diplomacy Division, Department of Foreign Affairs and Trade

Committee met at 11:05

Statutes of the World Tourism Organiz ation

CHAIR ( Wyatt Roy ): I declare open this public hearing. The committee will take evidence on the withdrawal of Australia from the Statues of the World Tourism Organization. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and warrants the same respect as proceedings of the House and the Senate. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. At the conclusion of your evidence, would you ensure Hansard has had the opportunity to clarify any matters with you and, if you nominate to take any questions on notice, would you please ensure that your written responses to questions reach the committee secretariat within seven working days of your receipt of the transcript of today's proceedings. Would any of you like to make introductory remarks?

Mr Wojciechowski : Thank you for the opportunity to speak with you today on the behalf of the Department of Foreign Affairs and Trade, Tourism Australia and Austrade about Australia's withdrawal from the World Tourism Organization under article 35 of World Tourism Organization statutes. The World Tourism Organization is commonly referred to as the UNWTO, to distinguish it from the Geneva-based World Trade Organization. The UNWTO is the United Nations agency responsible for the promotion of responsible, sustainable and universally accessible tourism. The original World Tourism Organization statutes entered into force for Australia in 1979. Australia withdrew from the UNWTO in 1990 and subsequently re-joined in 2004. The current proposed UNWTO withdrawal was prompted by renewed questions about the value of membership to Australia in recent years. It follows a comprehensive internal review conducted by DFAT in consultation with all relevant government agencies and key tourism industry stakeholders, some of whom are WTO affiliate members.

The government has decided that it is in Australia's national interests to withdraw from the UNWTO as the return on Australia's investment is minimal given the limited benefits to the Australian tourism industry and the Australian government. While the UNWTO has emphasised the importance of Australia's membership to it, it has not given priority to Australian interests, as would be expected given the extent of Australia's financial contribution. The Australian government has instead refocused Australia's multilateral tourism engagement towards the APEC Tourism Working Group and the OECD Tourism Committee. These fora provide better returns on investment, include Australia's key tourism markets and will assist Australia to achieve its Tourism 2020 policy priorities and broader economic diplomacy objectives. Membership of these bodies also supports our efforts to build stronger and bilateral tourism relationships with our key markets such as China or the United States of America.

Australia is not the only member of the UNWTO questioning the value of its membership. The United Kingdom, the USA, Canada, Singapore and Belgium have all withdrawn from UNWTO. New Zealand, Denmark, Ireland and Sweden never joined the organisation. We understand that the UNWTO's choice of priorities, together with economic considerations, was a key factor in those countries' withdrawal from the UNWTO or in the decision not to seek membership of it. In 2015 figures, since re-joining the annual cost to Australia for its UNWTO membership has increased from approximately A$235,000 in 2005 to A$430,000 in 2015. Australia's membership fees will need to continue to be paid in 2016 on a pro rata basis until the proposed withdrawal from membership has come into effect.

Given the differences in the Australian government strategic priorities and resulting work program from those of the UNWTO, the benefits from Australia's UNWTO membership to the Australian tourism industry and to the Australian government are low and are not matched by the cost of membership. Australian government agencies do not currently rely on data supplied by UNWTO. Withdrawal from UNWTO will not preclude Australian government agencies from purchasing UNWTO publications and data on an ad hoc basis. We believe that Australia's proposed withdrawal from the UNWTO will have no negative impact on the Australian tourism industry. For example, Australian tourism organisations and businesses are still able to apply for UNWTO affiliate membership, if they so wish. It will actually be easier for these organisations to apply for affiliate membership as Australian government support for new applications would no longer be required. Australia will be free to re-join the UNWTO at any time.

Finally, I wish to clarify a point under paragraph 26 of the national interest analysis. Should JSCOT approve completion of the Australian domestic requirements of a UNWTO withdrawal, DFAT will lodge an instrument of withdrawal with the government of Spain. DFAT will commence the process to amend the Specialised Agencies (Privileges and Immunities) Regulation 1986 after the instrument of withdrawal is lodged, not before as stated in the NIA. This is because Australia's withdrawal from the UNWTO will not come into effect until one year after the government of Spain has been notified.

Honourable members and senators, thank you for providing us with this opportunity to make these opening comments. We are pleased to take any questions you may have.

CHAIR: You talked about the alternative membership with the APEC Tourism Working Group and the OECD Tourism Committee. Can you tell us a little bit about them and the benefit for the Australian tourism industry?

Mr Wojciechowski : Sure. Australia has been a member of APEC since it started in 1989. Its Tourism Working Group essentially works to increase tourism growth in the Asia-Pacific region. It does a number of studies. It does research into topics of interest to Australia and its members. It is an organisation which we find is quite responsive to being tasked to do the kinds of things we are interested in. For example, we would like to get up a major proposal in APEC which focuses on labour and skills and labour mobility. These topics are at the heart of what the government is trying to achieve in the tourism sector in Australia. Certainly we have a very strong commitment to APEC. Importantly, it contains most of our major markets. China and the North Asian economies are represented in APEC as are the United States and big parts of South America. It is the big player and that is where our future lies in terms of cooperating on tourism in our region.

With respect to the OECD Tourism Committee, obviously OECD is a pre-eminent organisation which looks at improving public policy around the world. It is an organisation of developed countries and I think it is fair to say that the problems we encounter are more of the nature of the problems encountered by other developed countries. In fact, if I could paint a contrast between OECD and UNWTO, the issue of a state of development is an important one to make. UNWTO is an agency which predominantly provides benefit to developing countries. For that reason perhaps a number of countries have not joined it. They perceive the benefit not to be particularly huge. We have been in, we have been out and now we would like to come out again. That reflects policy nimbleness in response to how institutions change and how national priorities change. I think it is fair to say that this is really a discussion about value for money and government priorities. We are on board rebuilding the budget and therefore the $440,000 we will save each year for not much that we get in return will go towards that.

CHAIR: Excellent.

Mr WHITELEY: I have a series of questions. If developed countries are questioning their own involvement, as we are, who are the major players? I know there are 150-odd countries. You just alluded to developing countries versus those that are developing. Who does that leave as the players? Who are the major players—there is always a major player within these UN groups.

Mr Wojciehowski : Thanks for that question. It is a good one, but a difficult one to answer in the context of UNWTO. There are some countries that are more prepared than others to attend meetings, but in terms of being major players, in our view it is not an institution that has a particularly strong impact on the tourism world. It is an institution that brings together the smaller players, so in terms of being the dominant player it would be hard for us to identify a specific country. You might perhaps look more to the kind of groupings that are dominant in the United Nations—it is the developing countries, it is countries in the Mediterranean region and North Africa—and, perhaps look at office holders. I believe the current secretary-general is from Jordan. Obviously there is a great buy-in from those countries. But it is not an organisation that is, for example, dominated by one group of countries or another. Its impact, in fact, is not huge, so therefore I guess it has never been a major prize to dominate.

Mr WHITELEY: So it is one vote, one country?

Mr Wojciehowski : Pretty much. It follows the UN system.

Mr WHITELEY: On that front, how are the membership fees calculated? How is it that Australia pays nearly half a million dollars a year?

Mr Wojciehowski : The membership fees are calculated on the basis of GDP, population and tourism receipts. It really is a sliding scale, if you like, or an equation that they have.

CHAIR: Who measures the tourism receipts?

Mr Wojciehowski : It comes from a variety of sources, but in our case we measure our own. We have our own national statistics, we give those to the UNWTO and, based on the census and the population numbers, they work out how much we should pay. Of course, as people withdraw others who remain will have to pay a little bit more. The organisation does not have a big budget—it is about €13 million, so it is not huge. There probably also lies its problem; that with €13 million it is hard to be a significant player, to do research and to do other things. It is not a particularly well-funded or strong organisation, in our view.

Mr WHITELEY: I note in some of the comments in relation to those that oppose this decision, particularly within in the tourism industry. They raised the concern which we hear often in this committee, about the way governments of all persuasions—I will use the word 'consult'. We tend to use that word fairly loosely. The NIA attachment that we have on consultation claims that the industry was consulted prior to this decision being made to consider withdrawal. However, those that are against the decision have submitted to the committee that they were simply informed that the decision had been made, and they believe that their concerns about the withdrawal have been ignored. Would you like to make any comment in relation to that. Either they were consulted or they were not.

Mr Wojciehowski : I certainly would refute any suggestion that there was no consultation.

Mr WHITELEY: Talk to me about how, in your mind, there was consultation. Everybody has got a different view of what consultation is. What does consultation represent for you?

Mr Wojciehowski : Consultations for us represents comprehensive briefings on the question before government, which was whether to stay or go. That was put to the meeting of ASCOT—the Australian Standing Committee on Tourism. There has been quite a bit of talk around this subject for a number of years; in fact, it was the previous government that initiated internal reviews into it. It has been questioned by previous ministers of tourism, so in terms of corridor talk it was certainly a live topic. People felt that at some stage we will have to make a decision on it. The current government certainly briefed ASCOT on its intention to consider this issue. Then, as part of DFAT's work in preparing the internal review, we contacted every single Australian affiliate member. There are not that many—10, as it turned out. Some of the information we have been getting from UNWTO was not up-to-date; some people have withdrawn.

Mr WHITELEY: So there are only 10?

Mr Wojciehowski : There were essentially 10 parties we had to contact. We spoke to some of them a number of times.

Mr WHITELEY: They are known as affiliates?

Mr Wojciehowski : That is correct, yes. If you are interested, I could tell you exactly who they are.

Mr WHITELEY: That would be useful. If there are only 10, it will not take us long.

CHAIR: You were saying before that you could still be affiliated without having Australian government approval.

Mr Wojciechowski : Absolutely. This is really the point. Unless you want to run for UNWTO positions where you must be a member, unless you really want to be a serious player in that organisation—for whatever reason that may be—it is really poor value. Anyone can be an affiliate. In fact, you pay about A$3,400 to become an affiliate so it is a bit of a bargain compared to the $400,000 we pay. If you feel in some way it enriches your engagements with the tourism industry, be it in terms of work you might get as a consultant or the value you might receive as an educational institution, that is the way to go.

If I come back to your question, the 10 are: the Australian Tourism Export Council, which is an umbrella organisation; Central Queensland University, which is in the process of withdrawing; Griffith Institute for Tourism at the Griffith University, which is a recent example of a member that has joined as an affiliate; James Cook University School of Business; Australian Tourism and Transport Forum; University of Queensland; University of Technology, Sydney; Victoria Tourism Industry Council was but has now withdrawn; and the Victoria University Centre for Tourism and Services Research, which is in the process of withdrawing as far as we know. We spoke to these entities and how it affects their businesses.

If I can be honest, if somebody pays for something that they may perceive they may receive some benefit from, even if it is intangible and immeasurable, more people will generally say, 'Sure, we would rather that Australia was a member than not be a member.' But when pressed about what the actual benefits are or what can you achieve without this, really, it was clear that there was no real benefit from being a member. You can be an affiliate. If you are conducting research that perhaps is closely aligned with what the UNWTO is doing, perhaps on the development side, you may choose to be an affiliate member. Go ahead and do that. But, really, as a nation, we really felt it was not something that we needed to have to pursue our national tourism strategy—Tourism 2020.

Ms PARKE: Are there any disadvantages for affiliate members of Australia not being a member?

Mr Wojciechowski : No.

Ms PARKE: So they can just operate as they have done?

Mr Wojciechowski : Absolutely. There may be a perception that your country is not a member. We looked into the question of would you be overlooked for contracts if there was a member country running but it was not the case. In fact, the UK picks up quite a number of consultancies with the UNWTO and it is not a member. It had not been a member for a long time. We are still UN members. This is just one organisation of the UN, which, on consideration of priorities, we just feel it is one we can save some money on.

Ms PARKE: You just mentioned development there. I am curious, does the WTO have any kind of development law in helping developing countries develop their tourism industries as a means of an economic empowerment in which case Australia's participation, I think, would be valuable?

Mr Wojciechowski : Thank you for that question. Yes, indeed it is in the mandate of the organisation to be responsible for assisting the growth of tourism and the use of tourism as a development tool. So they do quite a lot in terms of conferences on how tourism can be used to increase income. Essentially the UNWTO is more a player in the development world, I would say, than it is in mainstream tourism policy world, where I would say the OECD is more in front.

There have been some cases in the past where we have cooperated with the UNWTO on development activities. I recall a workshop some years back, for example, on how to do tourism statistics properly that was conducted. We can clarify that and maybe send you follow-up information. There was a workshop organised in Bangkok, for example, that brought a number of developing countries from around the region and provided tuition on technical assistance and on tourism statistics.

The important thing is that nothing prevents us from working with the UNWTO in the development space. So should there be an interesting proposal that they have or should there be a demand from our side, where we would like to bring them in because of the level of expertise they have in tourism, we can still do that. We do not have to be members.

Ms PARKE: Would that then go out of our aid budget rather than foreign affairs?

Mr Wojciechowski : Yes, it would. Absolutely, but keep in mind, with 13 million euros headquartered in Madrid—they are not a big impact organisation. It is very small. So really, when you are talking about the development they do, that almost always has impact in partnership with some other major donor. We would have had to use our resources anyway had we stayed and said 'Let's do something, for example, in the Pacific.' The point I am making is that we can still do that with them, if they have something to offer. We do not have to be members to do it.

Ms PARKE: The decision to withdraw was taken solely on the basis of the benefit to Australia of being involved in this organisation, rather than taking into account the detriment that might occur to other developing nations from withdrawing.

Mr Wojciechowski : Not quite. In fact, DFAT's work on the internal review that I mentioned was conducted in February last year, which was just a couple of months after AusAID moved into DFAT—as you remember, when the merger occurred—and we certainly looked into the development aspects. There was a whole discussion on that aspect. The review did cover the development impact of our decision. In fact, at that time, it coincided with other decisions the government and the department were making around where best to direct Australian aid, and this issue of aid-for-trade became a major priority—so helping countries engage with a global economy and helping them to raise incomes through trading.

While conducting this review where we decided that we concluded and recommended to the government that there would be no development impact, at the same time we uncovered other opportunities that exist, particularly in services trade—aid-for-trade and the use of tourism as an accelerator of economic development. It led to some useful internal discussions. But let me just assure you that the development angle was fully covered in that internal review. We concluded that, whatever we have done with them before, we can do with them again if we so wish. We just have not done that much with them before.

Dr STONE: So, obviously you have come to the firm conclusion—I am being convinced—that we could spend our DFAT aid dollar much more effectively in some other enterprise; for example, having to grow tourism in the Pacific perhaps through direct investment in an activity, as we do with Carnival ships, or whatever.

Mr Wojciechowski : That is absolutely right.

Dr STONE: I hear what you are saying.

Mr Wojciechowski : It is obviously a separate discussion on development and what our priorities are—

Dr STONE: For about half a million dollars a year we could do much better.

Mr Wojciechowski : Absolutely.

Dr STONE: I understand.

Mr Wojciechowski : Although, I should say that whatever money was saved from this exercise, past governments have decided to put it towards promotion of Australian tourism. I think the best way to illustrate that—Tim, if I can put you on the spot—is to explain how you used to co-fund it with us, and then you stopped co-funding and you are using it now for the promotion of Australian tourism, so it is working in the national interest.

Mr Mahony : Up to the 2013-14 financial year, TA would pay for half of the membership fee. In 2013-14, that was about $215,000. We were sharing that cost with the tourism division that is in Austrade but, prior to the election in 2013, it was in the Department of Resources, Energy and Tourism. Our contribution to that fee is now put into marketing. At TA that is our job. We promote Australia as a tourism destination around the world. The global tourism market is becoming more and more competitive, not less so, and we just feel that is a much better use of those funds for us—certainly investing in our key markets and promoting our great country.

Senator BACK: I was keen to make sure that the money was not going back into consolidated revenue. I guess, with my external territories hat on, Chair, I would be hoping that a small proportion might find its way into supporting tourism activities on Norfolk Island, Christmas and Cocos (Keeling) Islands. I will ask you to bear that in mind.

Mr Mahony : Absolutely.

Senator BACK: In fact, it will come up again at Senate estimates. I ask you to bear it in mind somewhat urgently.

Mr WHITELEY: Tasmania is an island too!

CHAIR: It will be more money for the socialist republic of Tasmania!

Mr Mahony : You will be pleased that the main theme for Tourism Australia has been Restaurant Australia. That campaign is ongoing, but we are looking at developing a coastal and aquatic theme, so that will really suit our island destinations and, of course, our coastal destinations as well—and wherever there are rivers and lakes as well, not to lose our inland supporters!

CHAIR: Excellent. Thank you so much for appearing before the committee. If we have any further questions the committee secretariat might be in contact at a later date.

We will now go through the private meeting while we have the members here.

Proceedings suspended from 11 :30 to 11:47