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Address to the Adventure and Backpacking Industry Conference, Sydney

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Senator the Hon Nick Sherry Minister for Small Business, Minister Assisting the Minister for Tourism, Senator for Tasmania

Senator the Hon Nick Sherry

04 Nov 2010


Sydney, NSW

[check against delivery]

Good Morning Ladies and Gentlemen.

It is a privilege to be here today to open the 15th edition of the Adventure and Backpacking Industry Conference.

It is my first official speech as Minister Assisting on Tourism and it is a pleasure to be here to recognise an area that has become so important to the entire industry.

As Minister for Small Business, I recognise the importance of your sector to small businesses, jobs and the Australian economy as a whole.

I also recognise the importance of the backpacker sector and its economic significance to regional Australia - and I am sure a lot of Australian farmers appreciate the extra hands at fruit picking time.

This conference has grown from humble beginnings to become one of the leading events on the tourism calendar.

Its rise is similar to the backpacker industry you all represent - from a niche market to one that contributes one in every five tourist dollars flowing into this country.

The prevailing economic conditions around the world have hit discretionary income and consumers, more than ever before, are on the lookout for travel options which provide value for money.

In facing these difficulties, the backpacker industry will play a starring role as Australian tourism recovers from the global recession.

It is an essential part of our accommodation mix, with its ability to meet a number of budgets.

The Economic and Social Importance of the Industry

If backpackers were a country they would be our third largest destination market by volume and our largest by value.

In 2009-10, Australia attracted over 580,000 international backpacker visitors - that’s 11 per cent of all international visitors and they spent $3.4 billion throughout Australia.

Despite popular myths and stereotypes, backpackers are high-yielding tourists and spend almost twice than other international tourists.

The modern, contemporary backpacker is in many ways a prototype of the visitor of the future.

They seek experiences, culture, adventure, natural attractions, social interaction and the chance to explore the length and breadth of our great land.

The average age of backpackers is increasing and three quarters of them spend time in regional Australia, with almost half of them staying overnight in regional Australia.

The backpacker industry is well positioned to serve increasing numbers of visitors in the future.

That said, a higher Australian dollar and sluggish economic conditions in many of our international source markets mean that 2010 has not been an easy year for the backpacker industry.

With the current economic outlook, 2011 is not looking like being any easier for the 400 backpacker establishments and their 3360 employees in Australia.

The Australian Government does have a plan for the industry and to better position Australia in the long run.

National Long-Term Tourism Strategy

The backpacker sector is particularly affected by such challenges as the ability to attract good staff, red tape around building approvals or onerous regulations and duplication between states.

These all affect the productivity of the industry, preventing it from reaching its full potential.

And these problems can only be addressed through proactive planning and working with the states and territories.

Governments are working through these problems as part of the National Long-Term Tourism Strategy work program.

The Strategy was launched last December and sets a macro-economic reform agenda for industry - to remove the barriers to industry growth and better position Australian tourism to be more productive and competitive.

State and territory tourism ministers are taking the lead on much of its implementation.

We have identified 41 priority actions for completion in 2010.

The Minister for Tourism, Martin Ferguson and I attended the Tourism Ministers Council meeting in Sydney last month and were pleased with the progress report from the working groups on these initiatives.

Most have been completed and the Australian Government has agreed to the planned expenditure of the additional $6 million allocated towards the Strategy’s implementation.

Initiatives to come out of the TMC meeting to assist the growth of the industry and the marketing of Australia to international visitors include:

o The imminent release of a National Online Strategy, which will be the blueprint for the States and Territories to work together and to market Australia globally;

o The preferential treatment in marketing efforts of accredited tourism businesses; o Addressing industry concerns regarding labour and skills shortages, with work advancing on a profile of Australia’s

tourism workforce across the professions; and o The selection of the Flinders Ranges, Cairns and Townsville to pilot research which identifies their most appealing tourism

experiences for visitors to Australia.

As the Minister Assisting on Deregulation, I am particularly keen to work with industry to cut red tape.

Inconsistencies in regulation between states and the Commonwealth pose an increasing burden on business and are ultimately a barrier to profit, jobs, investment, productivity and innovation.

This is particularly true of the Tourism industry where over 90 per cent of operators are small businesses - and in the adventure and backpacking sector that is characterised by the entrepreneurial spirit of its operators.

I am pleased to announce the Government will be engaging a consultant with global expertise and experience to identify how regulation impacts on tourism investment.

This will help to provide us with the evidence base to remove the unnecessary red tape that destroys jobs and productivity.

This reflects our broader commitment to push a responsible reform agenda, which unlocks productivity throughout the entire Australian economy.

We have taken up the fight on OH&S reform, to reduce the burden of differences in regulation between the state and territory jurisdictions.

An option to immediately write off assets of up to $5000 will allow Australian small businesses to invest in new capital infrastructure.

Our reduction of the corporate tax rate from 30 to 29 per cent will reduce the tax burden for business in Australia. Small Businesses will receive the tax cut a year earlier.

Our reforms will unlock productivity for business throughout Australia’s economy, and free up resources for investment in research, product development, and capital.

The Government is also helping small businesses go online by providing $14 million to improve e-commerce capabilities, enabling them to take up the new opportunities offered by the National Broadband Network.

Better Marketing

Another essential element of our strategy for tourism is to increase Australia’s presence in international markets.

Earlier this year Tourism Australia launched its new $150 million global marketing campaign ‘There’s nothing like Australia’.

The campaign is currently being rolled-out in our key international markets and incorporates the latest technology and social media.

In this campaign we make significant use of new social networking media to better target different demographics and audiences, such as the backpacker and adventure tourism market.

This builds on the Tourism Australia’s existing work to get more backpackers to Australia.

Tourism Australia has cooperative partnerships with key youth focused travel operators such as STA Travel in the UK, Germany, Switzerland the USA; Australie Autrement in France and a range of other partners globally.

In the coming year the International Media Hosting Program will assist popular French surf, skate and snowboard magazine BeachBrothe’s to visit NSW, QLD and WA.

In addition, Australia will host North American TV show the Amazing Race, which will be filmed here in Sydney, possibly in the Blue Mountains - or even further in Broken Hill.

Just recently, Tourism Australia partnered with the Backpacker Tourism Advisory Panel (BTAP) to successfully host the Australian village at the World Youth and Student Travel Convention in Beijing in October 2010,

which saw 24 Australian operators attend the event.

So we have a lot of exciting events on the calendar for the youth, adventure and backpacker markets in the year ahead.

Working Holiday Visas

Some of the issues affecting the backpacker industry sit outside the tourism portfolio.

You will all be relieved to know that the Australian Government remains committed to the Working Holiday Maker Program.

The program sustains the backpacker market, providing the opportunity for visitors to participate in unskilled work, stay longer, and contribute more to the Australian economy.

The program has more than doubled in size over the past ten years, but has recently entered a period of negative growth, stemming from the global recession.

With a strategy in place to unlock productivity and increase Australia’s presence internationally, and an upturn in global economic conditions, we are confident the Working Holiday Maker program can return to positive growth in the coming year.

Significant numbers of backpackers extend their stay in regional Australia to work in industries like fruit picking and meat processing. In doing so, they fill gaps in the employment market that would otherwise be hard to

fill in our low unemployment environment. Indeed, the income backpackers earn in these jobs, in part at least, mitigates the high Australian dollar issue and allows them to spend longer with us.

There are currently 26 Working Holiday Maker partner countries and the Government is actively pursuing new Working Holiday Maker arrangements with a number of countries, to unlock new opportunities for our backpacker sector.

More Resources for Industry

During the election campaign the Government committed an additional $46 million to tourism over four years including an additional $40 million for the TQUAL program, as well as the $6 million for the implementation of the Strategy.

We are committed to work with industry through the challenges of the present and we have a plan in place to secure the tourism industry’s long-term growth and sustainability.

On behalf of the Government, it is my pleasure to welcome you all to this conference.

I know that with the calibre of people in the room, there will be plenty of new ideas to continue to drive the growth of the adventure and backpacking industry.

The answers to the challenges of the future aren’t getting any easier, but a forum like this gives us the chance to equip ourselves with the most powerful tools of all - ideas.

The Australian Government will continue to work closely with industry to meet - and beat - these challenges.

Thank you.