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ESTIMATES COMMITTEE D
28/09/1989
DEPARTMENT OF THE ARTS, SPORT, THE ENVIRONMENT, TOURISM AND TERRITORIES
Program 2-TOURISM
Subprogram 2.1-Policy and program support

CHAIRMAN -Senator Richardson, the Senators have asked if they can deal in a general way with all the items under tourism, rather than 2.1, 2.2 and so on.

SENATOR RICHARDSON -That is fine. This is Mr Thirwell, the Managing Director of the Australian Tourist Commission.

SENATOR MACGIBBON -Welcome, Mr Thirwell. What sort of budgetary allocations do you estimate we will need to recover from this disastrous strike to promote Australia and to re-establish the international tourist trade?

MR FERGUSON -Are you asking that question specifically?

SENATOR MACGIBBON -I thought we had the Chairman of the Australian Tourist Commission here.

MR FERGUSON -The Department is putting together the details of a recovery plan consistent with the Prime Minister's undertaking to look at such a proposal.

SENATOR MACGIBBON -I understood the Prime Minister was in the airy-fairy land of compensation. I did not know that he was looking at an advertising budget.

MR FERGUSON -No. The Prime Minister met with a delegation from the industry two weeks ago and said that while he was obviously not prepared to look at an open cheque, he was prepared to look sympathetically at a proposal for a recovery plan and we are in the process of putting that together.

SENATOR MACGIBBON -Would you give the Committee some indication of how you propose to recompense them for their losses?

MR BLUNN -It is not a compensation scheme at all; it is a proposal to--

SENATOR MACGIBBON -What about the guys who have gone broke as a result of the Government's inaction?

SENATOR RICHARDSON -That is a policy question which you should not direct to the officers. The Government has not announced that it is going to compensate anybody for it; what it has said is that we will attempt to get the industry going at full speed again and that we will look at a plan to that end. The Department is currently preparing such a plan in consultation with the industry.

SENATOR MACGIBBON -All right. That will involve a degree of advertising over and above what is expended at the present time to promote international tourism, will it not?

MR FERGUSON -We would envisage that it would.

SENATOR MACGIBBON -Have you any idea of the magnitude of this assumption?

MR FERGUSON -No.

SENATOR MACGIBBON -I see.

MR FERGUSON -We are still discussing that with the industry.

SENATOR MACGIBBON -Are you doing an evaluation of the economic effects of the strike at the present time on the reduction in international visitors to Australia?

MR FERGUSON -Yes. Ever since the dispute commenced we have worked very closely with the industry in compiling what information we can, sifting it and analysing it, to come up with our best estimate of what the dispute may be costing the industry.

SENATOR MACGIBBON -How recent are your estimates?

MR FERGUSON -The last estimates that we have were as of Friday last week.

SENATOR MACGIBBON -Are those figures available? Are they public?

MR FERGUSON -They are not public, but they are figures that are in the public domain.

SENATOR MACGIBBON -Could the Committee have those figures, please?

MR FERGUSON -Yes, I do not see why not. But they are only estimates: it is extraordinarily difficult to estimate precisely what the damage might be and, of course, that is going to depend on how long the dispute goes on.

SENATOR MACGIBBON -I understand that.

MR BLUNN -Can I just clarify that, Senator? Do you mean a consolidation of the figures that have been in the public domain?

SENATOR MACGIBBON -No. I would like a consolidated figure as of last Friday for what you think it has cost us already.

MR BLUNN -Some of that information is commercial-in-confidence I believe, which would create some problems for us, but could we look at it and see what we can do? Also, I am told that it may not be accurate estimate. Some of it has come from specific organisations in aggregate form and in that form I do not see any problem with it.

SENATOR MACGIBBON -I think the Committee would be interested in the aggregate figures rather than any others. Have you made predictions as to what the degree of reduction will be this side of December?

MR FERGUSON -We have made a prediction that if the dispute continues for a period-and we cannot be specific about how long that period might be-the indications suggest that between now and the end of the year there may be a 30 per cent reduction in overseas visitation. That is our best estimate at this stage.

SENATOR MACGIBBON -Thank you. That is all.

SENATOR PUPLICK -What specific steps would you be taking to ensure that in order to overcome the temptation to promote our natural environment as part and parcel of the recovery program we do not in fact go overboard and encourage people into park and wilderness areas in numbers which are in fact greater than our capacity to handle that sudden additional impact in the short term?

MR FERGUSON -I think in general we are very careful on that question anyway. There is a member of the Board of the Tourist Commission, Miss Figgess, who is associated with the Conservation Council and is a well-known environmentalist , and you can be quite sure that she keeps a very close eye on the Commission' s activities in that regard. It is something that is done as a matter of course, but I take your point that it is something which will need to be looked at carefully in putting together the recovery proposal.

MR BLUNN -But to a large extent that is self-regulating by things like accommodation. You cannot attract huge numbers to a lot of these areas because they just cannot take them. Our efforts are going to be to get the numbers of people back to what they were.

SENATOR PUPLICK -Yes, but in areas such as north Queensland and the Barrier Reef, that restriction on accommodation is likely to be more of a constraining factor than it is in, say, Kakadu or in south-west Tasmania.

MR BLUNN -Sure.

MR THIRWELL -The basic thinking we have at the moment is to do no more than the positive promotion of Australia that we have been doing over recent years. The only market where we are contemplating anything new, I suppose, is Japan, and we may need to get on television for the first time, if we can get the funding for that. Otherwise the campaigns we have include the `Land of Dreams' in Asia, the European campaigns and the Hogan advertisements. These would basically continue but there would be more of them in more places.

SENATOR PUPLICK -In terms of this consultation process in the post-strike recovery program, what specific consultations are taking place with the States and the Territory Government on that question?

MR BLUNN -The Minister is meeting with the appropriate Ministers as we speak.

SENATOR PUPLICK -So that is at ministerial level at this stage.

MR BLUNN -I am sorry, there is also the Tourist Advisory Committee which is very much involved in this and which draws representation from all States. Also, we have, of course, been talking to our colleagues in the various State bureaucracies.

MR FERGUSON -There is a State-Commonwealth committee meeting next week.

SENATOR PUPLICK -Can you tell me why Tasmania has been specifically singled out for the funding of the consultancy to deal with improving its access to the international tourist dollar, as distinct from, say, the Northern Territory or another State?

MR FERGUSON -Tasmania traditionally gets a very small number of international tourists-only 3 per cent of international tourists visit Tasmania. Tasmanians have for a long time been very anxious to raise that level. It is a small State which has commensurately relatively small resources compared to other States, including the Northern Territory, which gets a large number of international tourists. That was the reason behind that proposal.

SENATOR PUPLICK -Who will undertake the consultancy?

MR FERGUSON -As I understand it, it is not for a consultancy; it is for a program to assist the Tasmanians. I understand that they have made a decision that they will provide an amount of funds to go with that and they will put them towards looking at what they need to do in international promotion.

SENATOR PUPLICK -So is there not to be a consultancy?

MR FERGUSON -It is not a consultancy in the normal sense: the Tasmanians are putting a similar amount of money together and they want to review what they can do or what they need to do in international promotion.

SENATOR PUPLICK -In this document it says that the purpose of the item is to provide for the Commonwealth share of funding in a joint Commonwealth- Tasmanian consultancy on international tourists. What is that?

MR BLUNN -This is the Advance to the Minister for Finance?

SENATOR PUPLICK -Yes, but presumably it is something which is your responsibility?

MR FERGUSON -I am sorry. It is to do with study: I suppose you could call that a consultancy, but the intention is to do a study.

SENATOR PUPLICK -No, it is not the document for the consultancy-not what I call a consultancy.

MR FERGUSON -I am happy to call it a consultancy then. It is a matter of definition, I think, but what they are doing--

SENATOR PUPLICK -It is a matter of your departmental documentation. It is your Department's words, not mine. This is a document prepared by your Department. It says:

. . . to provide for the Commonwealth share of funding in a joint Commonwealth -Tasmanian consultancy.

There is either a consultancy or there is not a consultancy.

MR BLUNN -I think there have been a number of consultancies actually, Senator. I think the objective is to produce a result. I would describe that as a consultancy in the terms in which it is used there.

SENATOR PUPLICK -Who is going to undertake it?

MR BLUNN -I cannot answer that.

MR FERGUSON -I cannot answer that either but the Tasmanians are putting in a similar amount of money to undertake that work.

SENATOR PUPLICK -The Commonwealth has offered $30,000 on a dollar for dollar basis for a three-month consultancy. I want to know whether a consultant will be appointed and whether tenders will be called for. It is a $60,000 project. Who is going to do it?

MR BLUNN -I think that has not yet been decided, Senator. I think what is going to happen is that there will be a meeting between Commonwealth and State officials to put together a program which will be funded from that. That will certainly involve consultancies, I believe.

SENATOR PUPLICK -Has the Department made a further submission to the IAC following its draft report on travel and tourism?

MR FERGUSON -Yes.

SENATOR PUPLICK -Is that a public document?

MR FERGUSON -Yes.

SENATOR PUPLICK -Could I be supplied with a copy of that?

MR FERGUSON -Indeed.

SENATOR PUPLICK -In terms of the general thrust of the draft report, has the Department indicated that it is in basic agreement with the general analysis and thrust of the IAC report or does it have any problems with it?

MR FERGUSON -In terms of the general thrust, with the exception of the recommendations in the draft report on the funding of the Australian Tourist Commission, we are basically in agreement.

SENATOR PUPLICK -Are those specific recommendations about the Commission addressed in the further submission?

MR FERGUSON -Yes, and they were addressed when we appeared before the Commission as well.

SENATOR PUPLICK -In that case I will not have to pursue them here. I refer to the other report in relation to tourism and its promotion entitled Tourism in the Antarctic, a report of the House of Representatives Committee. I will refer to this matter when we consider the Antarctic Division, but has the Tourist Commission adopted any position on the recommendations of the House of Representatives Committee?

MR THIRWELL -No. At this point it has not considered those recommendations.

SENATOR PUPLICK -Does it intend to?

MR THIRWELL -Yes.

SENATOR PUPLICK -Does it have any initial view at this stage about what interest ought to be encouraged or shown in the promotion of tourism in the Antarctic?

MR THIRWELL -No, no initial views as it has not been discussed by the Board at this point.

SENATOR PUPLICK -Did the Commission make any submission to the House of Representatives Committee?

MR THIRWELL -No, it did not.

SENATOR PUPLICK -Why not?

MR THIRWELL -Basically, a lack of resources at the time. We were trying to deal with the recommendations of the IAC inquiry at that time as well as other activities, and because we knew that the Department was making a submission into which we had some input.

MR FERGUSON -The normal way in which we have worked with the Commission on such issues is that, unless it is a matter which specifically falls within the ambit of the Commission's responsibility, the Department will have the major carriage of it and will prepare a submission in conjunction with the Commission, and that is what happened on this occasion. So there was discussion between the Department and the Commission on the submission.

SENATOR PUPLICK -Would the Commission ever envisage its having a role overseas of promoting visits to the Australian Antarctic Territory?

MR THIRWELL -At this point in time I would say probably no but it is something that has to be discussed with the Board and with the Department.

MR BLUNN -It may happen in the future but at this time no.

SENATOR PUPLICK -What response has either the Department or the Commission made to the recommendations and conclusions in the Bradbury report on tourism shopping in Australia?

MR FERGUSON -After the conclusion of the Bradbury inquiry and the publication of that report, the Government established a small implementation working group under the chairmanship of Tony Coote of Angus and Coote, and we are working through the recommendations in that report. We have completed action on a number of them; some of them we are still working on.

SENATOR PUPLICK -The report is now 12 months old. What positive outcomes can we point to arising from its recommendations.

MR FERGUSON -The implementation group is required to report by December, so as I mentioned not all the elements have as yet been completed. But a pamphlet dealing with dos and don'ts on education and training in the retail area has been produced; work has been undertaken on language study and the question of language premiums for staff; industry has done research into education and training; and the Manufacturers Association is looking at education in the manufacturing area. Decisions have been made to produce a book or booklet to promote Australian-made products to tourists and to establish a crafts database, which I think has been completed. There was a decision on the hallmarking of Australian-made manufactures in the area of silver and gold. Some work has been undertaken in terms of a better system of sales tax remission. I think we have a decision on it, in principle, but it has not yet been put into practice. I have a schedule which outlines the work that has been done and the work that is being done, and I do not see any reason why you should not have a copy of that.

SENATOR PUPLICK -Thank you very much. I would be grateful for that. Was the implementation committee set up with representatives of the bodies that it was recommended be on it?

MR FERGUSON -Yes, as far as I know it was. It has representatives of the Retailers Association, the Manufacturers Association, the industry training bodies.

SENATOR PUPLICK -The retailers association, inbound tourism, CAI, the Australia Council, duty-free operators and the unions were all represented on the implementation committee?

MR FERGUSON -Yes.

SENATOR PUPLICK -What is the current development work being undertaken by the appropriate tourist authorities for the planning and for the further advancement of the upgrading of facilities at Kingsford-Smith and the decision on the third runway?

MR FERGUSON -The upgrading of the current international terminal is almost completed. That will increase the capacity of that terminal by around about 80 per cent.

MR BLUNN -You are only interested in the tourist involvement in--

SENATOR PUPLICK -I am interested in the involvement from DASETT, whether it happens to be on the Commission side, the environmental work that you might be undertaking, the facilities rather than the actual aviation--

MR BLUNN -I think basically it could be summed up, Senator, by saying that our role is to advise our colleagues in the responsible department of the tourist implications and of the tourist needs. They then get subsumed into the Government decision making process where we are active in consultation with our colleagues in the other departments to make sure that tourismis to the forefront in those things.

SENATOR PUPLICK -What about advice on the environmental basis? Are you also involved in providing that?

MR BLUNN -Do you mean from the Department, apart from the tourism side?

SENATOR PUPLICK -Yes.

MR BLUNN -We will certainly be involved in environmental impact statements where those are involved, yes.

SENATOR PUPLICK -Can you tell me what is the mechanism for making sure that the tourist advice and the environmental advice, as distinct from the EIS process, are actually being integrated into one set of advice, or is in fact the situation that different parts of the Department are--

MR BLUNN -We rely on close liaison between the parts of the Department and I think we have, by and large, achieved that.

MR FERGUSON -We have made sure that the details relating to the draft guidelines for the EIS have been made available to the industry associations and, through them, to those members of the industry that want to make an input into that process; that is a public process.

MR BLUNN -That is by consultation between the environment side to the tourist side which then goes out to its--

SENATOR PUPLICK -There is not a sort of Kingsford-Smith working group, or anything like that, that actually brings together the tourist people, the environmental people, the people who might be involved in the different aspects of the advice which you have to give to different departments?

MR BLUNN -There certainly has been a group working on Kingsford-Smith for a very long time which has involved the various responsible departments. As far as this Department is concerned, normally we try to identify one area that has maximum responsibility and then make sure that area involves the others. But it could easily be in this case that both tourism and the environment side would be involved.

SENATOR PUPLICK -Can I ask you then about some specific figures? There were reports the other day that there had been a substantial downturn in tourist arrivals in Australia prior to the commencement of the pilots dispute. Can you provide some information on what that in fact was in a statistical sense?

MR FERGUSON -The figures indicate that in the first six months of the year overall there was a 3 per cent decline as compared with the same period last year. The July figures have just come out-that covers a seven months period- and the decline in that seven months is 5 per cent. Traditionally the second half of the year is better than the first half of the year. Had the pilots dispute not intervened, we would have expected that the curve would have started to come up again as the year progressed.

MR BLUNN -The drop was not altogether unexpected, because of the Bicentennial and Expo tourism hype.

SENATOR PUPLICK -Leaving 1988 out, how do those figures compare with the 1987 figures for the same period of the year?

MR FERGUSON -They are pretty constant. For the first six months of this year, 1989 over 1987 shows a 22 per cent increase.

SENATOR PUPLICK -For the first six months?

MR FERGUSON -Yes. That is the latest figures I have on that.

SENATOR PUPLICK -And is that fairly uniform across tourist source countries?

MR FERGUSON -Japan has been particularly higher; higher than most others. The United States has been lower. The United States has declined slightly, but in that period 1989 over 1987, Japanese numbers have increased by 90 per cent in that six months, compared with the same six months of the previous year; Europe, other than United Kingdom, 29 per cent; United Kingdom and Ireland, 43 per cent; Asia, excluding Japan, 25 per cent; and New Zealand, 7 per cent.

MR BLUNN -If you would like those figures, we could give them to you.

SENATOR PUPLICK -I would like them, please. The figures that you have just quoted, although understanding that 1988 was in some respects aberrant- particularly since the early part of the year, the January part of the year, was obviously a particular hype period--

MR BLUNN -Expo affected the middle to late parts, so the distortion--

SENATOR PUPLICK -The figures we were talking about were those for the first six months. Have they caused you in any sense to review or modify any of the strategies put in place as far as the promotion of Australian tourism is concerned?

MR THIRWELL -As the figures indicate, the two major markets that have shown some softness this year are the United States and New Zealand. New Zealand was totally expected, because of the very high numbers of New Zealanders- estimated at something like 220,000-who visited Expo in Brisbane. We even targeted on a decrease from the New Zealand market, because we obviously could not sustain that without a major event. Our strategy in New Zealand has changed, though, as a result, to try to upgrade the yield from New Zealand. We are aiming to promote Australia as a first choice destination, rather than the place which is second choice to most things, but they would rather go somewhere else in the world; so we are pushing that line.

The United States is of some concern. We are in the process of completing a major market identification study in there, in cooperation with the States and Territories, which will determine the future strategies in the United States market through the 1990s. Basically it is a study to understand the various segments of the United States market: what they want, what sort of products they need, and how they can be reached. That will be a major function of the Commission over the rest of this year: to determine what it will do about the United States market from 1990-91 onwards. With regard to the other markets, Japan is in a fairly good state. Without the pilots dispute there is no doubt that the Japanese market would have grown reasonably healthily again this year . The United Kingdom market is showing very good growth. The figures for Europe and Asia are holding up reasonably well against those for last year and will continue to be good markets for us in the next decade.

SENATOR PUPLICK -Does the Commission have any figures which would indicate what percentage of people flying around the country are domestic rather than international travellers, and the percentage of international travellers who use domestic air services?

MR FERGUSON -The best thing may be for me to give you the international visitor survey of the Bureau of Tourism Research which contains a great deal of that information. The answer to your question is that 45 per cent of international travellers fly domestically within Australia. The number of domestic tourists that use aircraft is of course quite small. The figure is about 8.5 per cent.

SENATOR PUPLICK -Can you tell me, without taking an obvious cheap shot, whether the 27 per cent figure for international tourists using domestic air services which Mr Keating cited the other day was in fact based on any published data that the Commission or any other body has published in the past ?

MR FERGUSON -My understanding is that it was based on the 1986 international visitor survey, which is of course a public document.

SENATOR PUPLICK -That 27 per cent figure might have been a valid 1986 figure?

MR FERGUSON -Absolutely. That was the category of travellers that used domestic aviation as their main form of moving from one stop to another. That does not cover the percentage of international travellers that use domestic aviation as a whole.

SENATOR PUPLICK -I now want to take you to one matter which arises in relation to the pilots dispute which may not be a concern of yours, but which struck me as an extraordinarily significant issue. On one flight I made during the course of the pilots dispute I was put on an international aircraft in Melbourne. The flight terminated in Sydney. All of the domestic passengers who boarded in Melbourne were simply told to head down a particular ramp when they got to Sydney. At no stage was their baggage checked. Somebody on that international aircraft could have had a bagload of cocaine, knowing that there was only going to be a Customs check in Sydney. I could have simply picked it up when I got on the plane in Melbourne and disembarked in Sydney, carrying that bag which was at no stage checked as I left the aeroplane. That smuggling operation would have been as easy as falling off a log. In terms of the tourist revenue side and in terms of the advice you give about handling any of these matters, what advice, if any, were you involved in providing to airlines, the authorities, Customs people, about the management of that sort of problem?

MR BLUNN -That particular issue you have illustrated was certainly raised by us, but I cannot answer the second part of your question.

MR FERGUSON -We have been involved, in a general sense, in discussion with the Department of Transport and Communications about the whole issue of using international airlines to carry domestic passengers. It is something that we have been keen to see happen, because we want to promote the view overseas-and Mr Thirwell will no doubt want to add to this-that you can get around in Australia; that you can still travel from Cairns to Brisbane to Adelaide. It may not be in the same way as you would have travelled traditionally, by Australian or Ansett, but there are methods whereby you can do that. Our main aim has been to ensure that those methods are put in place and, as far as we can, to make sure that the knowledge of that is available overseas.

MR THIRWELL -I can answer that. The main role of our 11 offices overseas has been to give advice to the travel trade and to keep it informed of what can happen. We have tried to demonstrate the positive aspects, particularly as Qantas has done, of flying a lot of international passengers around Australia, albeit mainly down the east coast. We certainly have been promoting that very actively and have been applauded for doing so. The only other comment I would make is a personal observation. Having come through Sydney Airport on Monday on a Qantas flight from Cairns, I have no doubt that I could bypass immigration, but there is no way I could get around Customs. Every domestic passenger was put through Customs. The queues were fairly long as a result, but they did a Customs check on every domestic passenger on Monday morning.

SENATOR PUPLICK -They certainly did not do so on either of the international flights I have taken in the course of the last week.

MR BLUNN -The point was recognised and flagged. It may be that, as a result of that, they have tightened up-I hope.

SENATOR PUPLICK -Regarding the Hospitality Industry Training Conference, two things arise. First, can you tell me what is actually planned, as far as that is concerned? Second, is one of the skills particularly regarded as still being in short supply related to hotel management and to the training required for people in the modern hotel management areas?

MR FERGUSON -The Hospitality Industry Training Conference is one of a series that has been organised by what used to be the National Tourism Industry Training Committee, which is now called Tourism Training Australia. It has, of course, prime responsibility for coordinating training activities in the industry. It is running a series of conferences, seminars and workshops related to different aspects of the industry. It is still the case that there are some shortfalls being experienced in the management area of the hospitality industry.

SENATOR PUPLICK -Finally, the figures prepared by the Committee secretariat show a change of minus 8.5 per cent in the variation to appropriations for the tourism function of this Department. Where is the main cut in funding taking place?

MR FERGUSON -Is that shown in our explanatory notes?

SENATOR PUPLICK -No.

MR FERGUSON -I would guess that the main reason for that would be a reduction in funding for international expos which is included in the tourism program.

SENATOR MACGIBBON -I would like to ask a question about the steel regions assistance program. Are there any figures available to demonstrate whether, in the tourism element of the steel regions assistance program, there is any improvement in the marketing of the region, the development of tourism facilities, and whether there is actually an increase in tourists going to those areas?

MR FERGUSON -We will not have definitive figures on those until the domestic tourism monitor, which is the main survey of domestic tourism, is available.

SENATOR MACGIBBON -What are we looking at-months or years?

MR FERGUSON -Months. The indications are looking at individual projects. As you would expect, some of them appear to have been very successful and have generated a significant number of tourists, although it is hard to provide definitive figures. Some of them, obviously, have been less successful in that regard.

Short adjournment