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Legal and Constitutional Affairs Legislation Committee
08/06/2012

BUCKPITT, Mr Jeff, National Director, Passengers Division, Australian Customs and Border Protection Service

COLES, Mr Anthony, Assistant Secretary, Border Management and Crime Prevention Branch, Attorney-General's Department

JAGO, Dr Leo, General Manager and Chief Economist, Tourism Research Australia

MADDEN, Ms Jane Lisa, Head of Tourism, Department of Resources, Energy and Tourism

WESTAWAY, Mr Simon Peter, General Manager, Corporate Affairs and Strategy, Tourism Australia

[14:54]

CHAIR: Would you like to make an opening statement? Could we clarify the status of your submission.

Ms Madden : I do not have an opening statement to make but I do want to refer the senators' attention to the comments and questions on the matter of the increase in the passenger movement charge that were directed at myself, the secretary and the managing director of Tourism Australia at the time of Senate estimates recently.

CHAIR: I understand the submission that has been provided to us is now able to be made public?

Ms Madden : Yes, the department provided some comments to the inquiry.

CHAIR: I am talking about this letter, dated 1 June.

Ms Madden : Yes.

CHAIR: We will now be publishing this letter on our website. If you would like to make an opening statement then we will ask you some questions.

Ms Madden : Please lead with your questions. The only point I wanted to make was the specific matter of the passenger movement charge in the budget was the subject of considerable questioning in the recent Senate estimates of our departments so I would like to refer the senators to the comments my secretary Drew Clarke made in relation to the PMC proposed increase, the utilisation of the proportion of that funding for the Asian marketing fund and also some elaboration that Andrew McEvoy, as Managing Director of Tourism Australia, made to that Senate committee.

CHAIR: That is a separate committee to us. We have not cross-referenced.

Ms Madden : I could read out the comments or table them.

CHAIR: We will take a copy for Senator Humphries and myself. I want to see if you can take us through some of the figures that Mr Lee used in his opening statement just now. I am not sure if you took them down while he was commenting on them.

Mr Westaway : Are you referring to the $180 million figure we were talking about?

CHAIR: No, I am talking about the $610 million figure that he anticipated would be raised as a result of this. Is that an accurate figure?

Mr Westaway : Yes, I am across that. It was announced in the budget that over the four years of the forward estimates, the change in the passenger movement charge would generate $610 million of additional revenue. A new Asia marketing fund was announced by the Minister for Tourism on that evening. Ten per cent of that additional rise would be allocated to the fund, which, over the four years of the forward estimates with indexation, would deliver $8.5 million in year one, $14 million in year two, $17.5 million in year three and $21 million in year four, which equates to an additional $61 million to the Tourism Australia budget over those four years. To provide further clarification, the four-year appropriation for Tourism Australia was outlined as $530 million. If you add the $61 million additional, which the budget is forecasting, it would have a four-year appropriation for Tourism Australia of $591 million.

Senator HUMPHRIES: But that money has already been spent. That core funding for Tourism Australia is ongoing. Funding of that order has been in the budget for a long time.

Mr Westaway : Of course, but I am just outlining what the four years will be in terms of our appropriation.

Senator HUMPHRIES: You are not suggesting that there is any benefit to Tourism Australia, apart from that Asian marketing fund, from the passenger movement charge going up?

Mr Westaway : I am just quoting the numbers. We get given our due, and we go and do the best for our country and our—

CHAIR: Let us just focus here for a minute, Mr Westaway. The increase in the passenger movement charge is one element; but what is the total cost then of operating the airport? We have federal police there, we have Immigration there, we have Customs there. I suppose what I am trying to say to you is: the passenger movement charge collection goes into general revenue, but what does it cost to operate our services as people depart this country, all up?

Mr Westaway : I have had a long background in aviation but not in airports, so it would be best if I were not to proffer an answer as to what it costs to facilitate a particular passenger.

CHAIR: It is not just airports; I am assuming that people pay this charge also as they leave on a cruise liner and so forth. Is that correct?

Mr Westaway : It is a passenger movement charge which relates to whether you are leaving on an aircraft or a boat or a cruise liner, yes.

CHAIR: Do we know across the board what the cost is? There are immigration and customs officers at every exit point in this country. When you look at some of the submissions you would be led to believe that the passenger movement charge is going to bring in $610 million, but we do not spend anywhere near that on the staff or the services as people exit. I am trying to get an accurate picture here as if I were doing a balance sheet of income and expenditure.

Mr Westaway : I have a broad general knowledge, but I believe I should probably defer to my counterparts here. It is not an area for Tourism Australia.

CHAIR: Sure.

Mr Coles : Unless my Customs colleague knows the answer, I do not think any agency at the table knows the answer to the question. I think the answer would probably require investigation across a wide range of agencies. So the best I can do is take it on notice, but—

CHAIR: What we would like you to do, as soon as the Hansard becomes available today right across the agencies—and I am sure there will be a number of you responsible—is to have a look at the figures that were quoted and provide us with some comments as to the accuracy or not of those figures and put them into some context. Surely, Customs and Border Protection, you must be able to tell us how much in your budget you allocate for departure arrangements in this country.

Mr Buckpitt : The Passengers Division within Customs and Border Protection is funded to the tune of about $156 million per annum. In simple terms that equates to about $5 per passenger. I think that the figure that Mr Lee referred to was $240 million, and I think that is referring to a combination of agencies such as DAFF, Biosecurity, Customs and Border Protection and maybe others such as AFP and perhaps even DIAC—I am not sure.

I am not aware of where that $240 million figure came from, but it is possibly of that order. I think the fundamental point that we would submit is that the passenger movement charge is not cost recovery; it is a tax. It has been classified as a tax since MYEFO in 2005-06, and suggestions that the two should equate are, I think, misguided.

Mr Coles : I do not know how helpful it is going to be, but I can give you part of the answer to what I think is a broader puzzle. For example, I think that the cost of aviation policing—and I think that that was one measure which Mr Lee referred to—is in the order of $200 million per annum. But that is one piece of a much bigger picture.

CHAIR: So we have $200 million per annum and we have $156 million per annum from customs and border protection. How much per annum goes to Tourism Australia now?

Mr Westaway : For the 2011-12 financial year, which only has a few weeks to go, we had an appropriation of $132.8 million. That figure is net of any efficiency dividend. The appropriation for the 2012-13 financial year will be $130.2 million. I can provide you with the other figures over the four years of the forward estimates if you wish.

CHAIR: Okay.

Mr Westaway : For 2013-14 it is $132.1 million. For 2014-15 it is $133 million. For 2015-16 there will be $134.5 million. That adds up to the figure I gave before of $530 million.

CHAIR: There were comments made about the reduction in flights in and out of the Northern Territory that was announced by Qantas a couple of weeks ago. I met with Julian Barry, Qantas's Northern Territory manager, yesterday. I will keep my own personal views about what is happening with Qantas and its quality to myself for this afternoon's purposes, but that might be why people are not particularly jumping on those flights. I am wondering if you want to comment on your analysis of what is going on in relation to those flights and why there has been a reduction.

Mr Westaway : I think the Northern Territory is in an interesting situation. The Northern Territory has great appeal and obviously has some of the most iconic elements in the world—Uluru, Kakadu. We have for some time defined Australian tourism as an industry in transition and, I would argue, quite significant transition. From an international perspective, we are moving quickly to a demand profile which sees the bulk of our visitors come from Asia rather than from our traditional source markets of the United Kingdom and the United States. New Zealand will, due to its geography, always be the largest provider of visitors. But in terms of value the Chinese market now brings the largest export return to the Austrian economy. That return is currently around $3.8 billion and will move upwards to somewhere between $7.5 billion and $9 billion, based on our Tourism 2020 planning.

The problematic issue with this is that, based on the year-to-date figures up to April 2012, Australia received around 573,000 Chinese visitors. In a recent visit of our executive up to the Northern Territory—and we spend a lot of time with Tourism Northern Territory and those associated with the industry—they were talking anecdotally of around about 2,000 or perhaps 3,000 Chinese nationals visiting the Northern Territory each year. Chinese visitors are our largest growth market, with numbers growing about 34 per cent just in the month of April, but currently the bulk of them are not coming to the Territory. Yet in the Western markets we have seen either some static behaviour or some decline, with the United Kingdom market down about five per cent on a yearly basis. In the German market and some of the other European markets we have also seen some softening. So the markets in Asia are growing but those in Europe are not, and the Northern Territory has traditionally had a lot of visitors from Europe.

The other aspect Mr Lee referred to is the growth in outbound travel out of Australia. It is true that more Australians fly out of the country each year than visitors come in, although we still receive close to six million international visitors a year. The proliferation of flights, the economic performance of our country, the high Australian dollar and lower unemployment all drive people towards looking at an overseas experience as much as a domestic experience. But people are travelling more often. Perhaps Professor Jago can provide some figures on the domestic behaviour. We are still seeing growth in domestic travel. I think it is just that the Northern Territory has experienced people flying over it rather than flying into it. That is something we are seeking to address.

CHAIR: We are probably not here to debate the state of the tourism industry in the Northern Territory, but I think there are a whole variety of reasons for that.

Mr Westaway : Yes, and we are very conscious of that.

CHAIR: I do not imagine that trekking through Kakadu is currently high on the agenda for someone from China, unless they are shown the benefits of that. It has probably been more of an attraction to the European market, I suppose. Would it be true to say that most Australians are choosing to fly overseas rather than around this country? I live in Darwin. If you gave me $1,000 tomorrow, I would be unlikely to spend it going to Melbourne or Sydney on Qantas; I would hike across to Bali. I do not think an increase in a passenger movement charge or a departure tax would make a difference to my view about that. Have you done an analysis of whether Australians are choosing to jump across to New Zealand or to South-East Asia rather than fly around this country?

Mr Westaway : I will answer the first bit. I think Tourism Research Australia can provide the hard data. Not just anecdotally, Australians are travelling more often. They are doing more domestic travel and they are also travelling abroad more often. I have a lot of figures in my head but not the National Visitor Survey figures around domestic travel. People are travelling more often. But you are right; there are numerous drivers in terms of seeing a spike in Australians travelling abroad. But they are still doing more domestic travel. To reinforce that point, in our campaign launched on Monday in Shanghai, we have got a specific focus on the Australian domestic market. We will be spending upwards of $5 million over the coming few months in terms of specifically marketing our country to Australians with that global campaign. We will be using many pieces of the puzzle to try and get Australians to be more in love with their country and rediscover aspects of it which perhaps they have been flying over, but should be flying into.

CHAIR: Professor Jago, did you want to say something?

Dr Jago : I will make a couple of general observations. Firstly, in terms of international travel, we are seeing more Australians travelling outbound at the moment than we are receiving. There is a deficit, as Mr Lee previously indicated. The National Visitor Survey figures will be released next week; they are under embargo at the moment. We are seeing the best quarter of results that we have seen for a number of years. Things look like they are bouncing up in terms of the domestic tourism scene. It is the most positive news we have seen for some years.

CHAIR: We heard evidence at estimates that the average spend of an inbound tourist is about $4,000. So this $8 increase in the PMC charge would be the equivalent of 0.2 per cent.

Ms Madden : That is correct. That was evidence that the department submitted to the Senate estimates committee based on work that Tourism Research Australia did.

CHAIR: Do you really think that a person who lives in another country would not come to Australia because there is an $8 increase in the departure tax?

Ms Madden : The level of taxes and charges is one of many factors going to the competitiveness of Australia. Certainly, as our submission makes clear, it is a factor. But it is the department's view, as expressed by the department's secretary, that it is only a marginal impact. The increase in the overall cost of visiting Australia, represented as a proportion of expenditure, is very small. Combined with the offsetting of 10 per cent of that passenger movement charge revenue for a major initiative into Asia by Tourism Australia, we believe this decision will have a net positive increase in tourism—that is, the hypothecation of part of the PMC as a result of the increase that is in the forthcoming budget.

Senator HUMPHRIES: The comments about the cost of running airports and border security measures and so on are presumably irrelevant. The government is not moving to a cost-recovery model, a user-pays model, for people who are transiting our borders.

Mr Buckpitt : That is correct.

Senator HUMPHRIES: This is a tax, as you pointed out.

Mr Buckpitt : That is correct.

Senator HUMPHRIES: Mr Lee made a point about the cost of the promotion campaign launched in Shanghai the other day. Where is that $180 million coming from?

Mr Westaway : That comes straight out of the appropriation we receive each year. It is our international marketing effort and domestic marketing effort—the combined value of that over the next three years. We expect to have industry partner with us to the tune of around $70 million, which is a value add to the campaign. We see this campaign being a $250 million investment in promoting Australia over the next three years.

Senator HUMPHRIES: How much of that $180 million is new money in this budget?

Mr Westaway : It is part of our appropriation. We will then seek to partner and we are indeed partnering already. In the last campaign we had around 180 partners for our international marketing efforts, 14 of those being major airlines servicing our country—Qantas, virgin Australia and down the list. We foresee that over coming weeks and months you will see further announcements by us about some major partnerships to best leverage that investment to promote our country more effectively and bring more visitors, particularly well-heeled Asian visitors, to this country.

Senator HUMPHRIES: I briefly looked through your submission which, at one stage, was mooted as being confidential, but which I now gather is not. I cannot see anything in there, from a quick reading, which tells me about any work the department has done to demonstrate that there will not be a negative impact on the tourism industry from increasing the PMC. What exactly have you done to estimate the effect on the tourism industry of this charge increase?

Ms Madden : In the submission, we make reference to the most recent research available to RET, which was the work also referenced by Mr Lee earlier today. He referred to it as research being done by the department, but it was actually facilitated by Tourism Research Australia and done last year by the Centre for Economics and Policy within the University of New South Wales. Economists and statisticians there modelled a 20 per cent increase in the PMC and, as noted in our report, the research found that, overall, the tourism industry would be worse off but only by a limited amount of $7.5 million, or 0.089 per cent per annum. There would be a negative impact on exports of $20.7 million a year, but this loss would be partially offset by an increase in domestic travel expenditure of $13.2 million.

I also note, and my colleague Professor Jago, may wish to comment further, that two elasticity scenarios were taken into account. I know that TTF made some comments about that. We can elaborate further on that research, but that is the most recent available research the department has access to which was projecting what an increase in the passenger movement charge might mean for the tourism industry—on expenditure and travel preferences—using these econometric assumptions.

Senator HUMPHRIES: His work being done specifically on the effect on the Chinese market of this increase in the charge? I understand—

Ms Madden : Not by the department and not, to our knowledge, by anyone else.

Senator HUMPHRIES: I understand there are some quite reasonable fares being offered from China. The passenger movement charge obviously constitutes quite a sizeable proportion of the total travel cost when those fares are as low as they are getting. Are you going to do any work on the possible impact on the Chinese market?

Dr Jago : I think the work that has been done—again, it was done by CEP, as Ms Madden said—has two elasticities. I guess it comes back to working out what the likely elasticity of demand from China is. You can actually ratio the existing work to get some sort of impact on that.

Senator HUMPHRIES: You can, but have you done that?

Dr Jago : It has not been done. Part of the problem is that I am not sure it is even known what the elasticity of demand is for that particular market. That is the problem—it is actually getting those elasticities in the first instance.

Senator HUMPHRIES: You can do a general assessment of the impact of the charge across the whole of the market but you cannot isolate it to one particular source?

Dr Jago : Some assumptions have been made about elasticities overall. A range of elasticities has been used and you can ratio it. But the elasticities are very difficult to tie down to individual markets.

Senator HUMPHRIES: What research has the department done about the value of the tourism industry to the Australian economy?

Ms Madden : The department, with Tourism Research Australia, working collaboratively with Tourism Australia and all state and territory governments, produces a range of information on the value of the Australian tourism industry. We work closely with the Australian Bureau of Statistics to provide funding for the Australian tourism satellite accounts, which are the primary statistical architecture for the industry. Tourism Research Australia produces a whole host of pamphlets, leaflets and documents. We can provide some to the committee, including the most recent international visitors survey that was extensively referenced by Mr Lee. In our submission we also note that the industry contributes on both the production side and the consumption side, with total tourism consumption in 2010-11 valued at $95.7 billion to the Australian economy. So we have a range of statistics and information to provide to the committee on any particular aspects you would like around that importance.

Senator HUMPHRIES: That $95.7 billion is the value to the Australian economy.

Ms Madden : Yes.

Senator HUMPHRIES: Do we have a figure for the contribution of tourism to tax revenues?

Ms Madden : Can I take that on notice?

Senator HUMPHRIES: Sure.

Ms Madden : Besides, I would like to liaise with the Treasury. One of the issues here, as you probably would be aware, is that although tourism is a major industry it is not defined within the Australian and New Zealand Standard Industrial Classification—ANZSIC. We have, over many decades, worked with the ABS and others to build up this statistical architecture, if you like, for the industry. I am not quite sure if the actual tax receipts can be tracked to find the proportion, but we will take that on notice and come back to you as quickly as possible.

Senator HUMPHRIES: Just coming back to that question about fares from China, I understand that carriers like Scoot are now offering fares as low as $179 from Singapore to Sydney. That is the fare, and of course now we are looking at a passenger movement charge that represents about another quarter of that fare added on as a charge. For a low-budget traveller—and there are plenty of high-budget travellers coming from Shanghai these days as well—that would make a difference, wouldn't it?

Mr Westaway : Yes. Scoot's launch, importantly, brings more capacity into a key market. Singapore is the top 10 source market. Unquestionably with these types of leading fares and stimulatory activity, as well as the additional capacity, we will see take-up of that. That will translate, we believe, into some stronger numbers out of Singapore over time. One extra flight a day does not necessarily tip it, but certainly we are pretty confident that we will see some growth out of that market. Similarly, you could well see some growth in outbound travel from Australia to Singapore as well. But that market traditionally has been about a fifty-fifty type of market between inbound and outbound, so I think it augurs well for some further growth out of Singapore with Scoot. And I should say that their parent company, Singapore Airlines, has put additional capacity into the Singapore-Australia market over the past year, even over and above what Scoot is doing. So that market is a dynamic and important one as a hub into Asia and beyond as well as a key hub for Asian travellers generally, particularly out of places such as India.

Senator HUMPHRIES: You would be aware that there is some criticism within the industry about research that has come out of Tourism Research Australia in recent times. We heard some of that from the last set of witnesses. I understand the Australian Tourism Export Council has sought funding to the tune of $20,000 because the industry, it says, cannot get proper research on priorities and does not trust findings from Tourism Research Australia. Are you aware of those criticisms?

Dr Jago : I would like to answer that, Senator. I have only recently joined Tourism Research Australia but, having been outside in the tourism industry for a number of years, that is certainly not my understanding. I heard the comments before about questions and assumptions in the report from CEP. That is fine; you can question assumptions in all reports. But I would argue very strongly that the research put out by Tourism Research Australia is of the highest quality.

Senator HUMPHRIES: That was not the question though, with respect; the question was about perceptions of the research. You are not aware of criticisms across the sector?

Dr Jago : Having been outside, no, I am certainly not aware.

Ms Madden : Senator, perhaps I could add that under this government there has been an attempt to work in partnership much more with industry and with state and territory governments. So we developed a national long-term tourism strategy and a framework document called Tourism 2020, which is actually endorsed by every state and territory government and has participation across each of its major work streams from industry. In fact, the CEO of ATEC, the Australian Tourism Export Council, sits on a high-level advisory board giving direction to the work of TRA and research in the industry. So, while I would be the first to say it is not perfect, there has been a collective effort, I think, on governments and industry to drive stronger research. The appointment of Leo as chief economist is one further example of that. So, while there may be some criticism that is constructive and useful, overall, I believe the standing of Tourism Research Australia is high and we are working in partnership with industry and governments to even improve it further.

Mr Westaway : I might add that Tourism Australia welcomed the appointment of Professor Jago. From my observations in my existing role as an executive at Tourism Australia, the level of collaboration between states and territories, TA and TRA is going well. We are an industry in transition. We have got some significant challenges but also some very good opportunities on our doorstep. I think the level of collaboration is high. As our industry comes to grips with the challenges that are there, I think we are finding a pathway forward. I think Tourism 2020 is endorsed by all of the states and territories. The last meeting of the Tourism Ministers' Council was very collaborative. We feel like we are heading in the right direction, but there are obviously challenges ahead of us.

Senator HUMPHRIES: I am pleased to hear all of that, but I have to say that the message I get consistently from the tourism sector is real concern about a lack of support for tourism from the Australian government. You would be aware that there have been plenty of criticisms over the years about that, of which we had only a small sample with some of the criticism earlier today. I accept that you are working hard to try to overcome problems but I hope you are not telling us that everyone is happy and that everyone is pulling in the same direction with respect to the—

Mr Westaway : I think most people pull in the same direction. We are an industry in transition. If you go through the public record of where Tourism Australia sits on this, we have got a significant leadership role. We think we are playing that role. We have had a change in our executive team over the past year. We have got an eminent chairman and I think a highly respected managing director. We are pulling people in pretty well. There are always people who want to be outside the tent rather than inside, and that is fair enough. There are a lot of issues at play and the industry is in transition.

There are some significant changes in the demand profile of Australia from an international visitor. Let us not walk away from it—it is true. There is a magnificent opportunity on our doorstep with respect to Asia. We were very demonstrative in launching in Shanghai on Monday. It was not by fluke that we decided to do that. We have got to make a statement to the market on where the market needs to head, and share your concerns as well. It is important that we have a collaborative industry. We are trying to ensure that we can play a role in that.

Senator HUMPHRIES: ABARES runs a roadshow to help agronomists with research—something like the equivalent role to what TRA does. I have heard criticism that people in the tourism industry think that the TRA should engage directly with tourism businesses. There is a concern that there is no translation of the data that they produce that can be used for real-world business development. Have you heard that criticism?

Dr Jago : I would like to follow up on that, Senator. One of the things very high on my agenda is exactly that. I think that TRA produces a raft of very good reports that are used very effectively by STOs and agencies such as TTF. I think it has been less successful to date at engaging the broader industry. One of the high priorities is to attempt to do that. It is also important to recognise that TRA is but one player in the research agenda. Much of our budget is geared towards producing the data sets that everybody uses. We will be doing a lot more to undertake that engagement but we need to be harnessing the other activities across the country as well. We cannot do it all.

Ms Madden : May I add that that recognition was made several years ago that TRA needed to work more closely with industry. It was the reason why Tourism Australia, the department and TRA came together to work a national conference, called the Directions conference; I invite you to it on 1 November, here in the Great Hall of Parliament House. It commenced three years ago. It was unashamedly modelled on ABARES's Outlook conference and has been followed up with workshops right around the country. Those workshops have been proceeding since 2010 with good buy-in. They attract a lot of businesses. As my colleague, Dr Jago, mentioned we are on the path and proceeding further ahead to have even better research collaboration at the SME level, which is predominantly what the tourism industry is made up of. Over 94 per cent of the tourism industry is small and medium-sized businesses. Without having contacts and material at the research level, the insights that TRA, TA and others develop will not be able to get through if it is not done in a user-friendly way with direct links. Those are in train and developing further.

Senator HUMPHRIES: All of which would suggest there is a problem you are trying to overcome, a problem of perception at least if not a problem of engagement with industry. You are not just doing this because it has occurred to you it is a good idea. You are trying to overcome a deficit of some sort in the way in which people in the industry view the work of bodies like TRA, aren't you?

Ms Madden : The Treasurer and the Prime Minister have recognised tourism is our largest services export industry but it is an industry that is in transition, as my colleague Simon Westaway was saying. It has changing in markets. It has different impacts depending on whether you are in regional and rural Australia. There are a whole range of forces at work that make the industry have considerable pressure points. That is why we are doing some of the measures we have outlined today and we are happy to brief you further if you wish about some of the other initiatives in train under Tourism 2020. It is an important industry at this very juncture, particularly on the verge of the Asian century, which has some fantastic opportunities to grasp but it is not easy. There are challenges and there are some real pressure points that need research insights from the likes of Tourism Research Australia so that businesses at the grassroots level can be positioning as effectively as possible to take advantage of those new opportunities.

Dr Jago : You are using as a reference the agricultural industry and one of the big differences between the agricultural industry and the tourism industry is they parallel to each other in small businesses but agriculture has been very successful having a large number of extension officers. It is not the research per se; it is the conduit out to the market that is the real challenge.

Senator HUMPHRIES: I understand the research on the 20 per cent increase in the passenger movement charge states there is no difference between that elasticities between a long-haul and a short-haul trip. If you consider the case of a short-haul trip between Auckland and Sydney, where the PMC would make up about 20 per cent of the cost of the fare, compared to Los Angeles to Sydney, where it makes up less than one per cent of the fare, there must be a big difference, mustn't there?

Dr Jago : The report does not say there is no difference. It just says there are assumed elasticities.

Senator HUMPHRIES: How can you make that assumption?

Dr Jago : It makes it clear at the front that elasticities have been used. In the example you have given, I think there is a difference.

Senator HUMPHRIES: What is the value of the research if it fails to identify that particular factor? Look at the situation of a person in New Zealand as was postulated by a previous witness. Someone in New Zealand wants to travel. They have the money to spend on holiday and want to get out of a cold place. They have the cost of a fare to Australia plus the cost of a fare to Fiji or some other Pacific Island. It is a very important market for us but a charge which makes up 20 per cent of the cost of a fare is going to make a difference to people's choice about where they want to go, isn't it?

Dr Jago : Yes, I think that is correct. But you can use the thing. If you make the assumption about what the elasticities are, you can ratio the results.

Senator HUMPHRIES: But we have not done this in this particular case, have we? Were trips between Auckland and Sydney and Auckland and Fiji compared in this study?

Dr Jago : No.

Senator HUMPHRIES: Isn't the New Zealand market a very important part of our inbound tourism market?

Ms Madden : I will make two brief points. Firstly, as the report notes, tourism demand elasticity estimates differ widely in all available literature and there is no accepted value available. As a result, two demand elasticity values are used. One is probably more applicable for economists to short-haul and the other to long-haul. That being said, as my colleague has said, the report does not go into that level of specificity. The researchers did not take that study into looking at specific markets, as we said at the beginning.

Senator HUMPHRIES: Okay. If I can come back to the general acceptance of the effort that is being made by government in this area, I had drawn to my attention the National Tourism Alliance process that took place around the Tourism 2020 strategy. I was told about the meeting that took place, I think, in Sydney, where tempers ran very high. People from around the country—tourism peak bodies—said that the government had not delivered on the industry's top three issues. I am told the minister stormed out of the meeting because it was so fierce, people were so upset and the reaction was so strong. Do you know about that, Ms Madden? In fact, I am told that you were at that meeting.

Ms Madden : I go to many, many meetings.

CHAIR: Do you know what date that was or when that was, Senator Humphries?

Senator HUMPHRIES: No, we do not. I am sorry. I will try to find out.

CHAIR: You can take it on notice, perhaps.

Ms Madden : I have been in the role as head of tourism for over four years. As I said, the industry has some challenges. There have been some very good meetings where there have been some good debates. Without further information, I do not know if I can answer your question, Senator.

Senator HUMPHRIES: All right. I will get more information, perhaps, and put that to you as a question on notice. Sorry, the date of the meeting was 16 December last year, if that helps you.

Ms Madden : All I could perhaps add is that, leaving aside the comments regarding the meeting process, in terms of results the Tourism 2020 agenda has delivered significantly since December—since this aforementioned meeting—including on key areas such as labour, skills and investment. Tourism Australia, the department and Austrade have now collaborated to produce national priority work around investment facilitation, which has been very warmly welcomed by most parts of the Australian industry. There are a range of achievements that I think Tourism Australia, the department and Tourism Research Australia could point to even since last year under the Tourism 2020 heading.

Senator HUMPHRIES: All right. Thank you.

CHAIR: Thanks. We do not have any other questions, although I understand the Hansard will be available on Tuesday. So I am going to ask you if you could take it on notice, please, to have a look at Mr Lee's evidence again and get back to us with any clarification of those figures and amounts that he specified. But we would need a very quick response to that, because we are due to table this report the week after next. Thank you very much.

Committee adjourned at 15:38