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Foreign Affairs, Defence and Trade Legislation Committee
01/06/2018
Estimates
FOREIGN AFFAIRS AND TRADE PORTFOLIO
Tourism Australia

Tourism Australia

CHAIR: I welcome back Mr John O'Sullivan, Managing Director, and officers from Tourism Australia, in particular, Ms Halbert. Mr O'Sullivan, do you want to make an opening statement?

Mr O'Sullivan : No, thank you, no opening statements.

Senator MOORE: Welcome. Thank you for the responses to the question on notice; they were very useful. I want to ask some questions about the advertising budget because you have quite a specific area of advertising. Is there a different approach to advertising Australia internationally and advertising Australia domestically? There are many people who never get outside their own state, and that's another huge market that we need to look at. Is there a different approach to that, and what about budget?

Mr O'Sullivan : The most fundamental difference between the way we advertise Australia offshore and the way that the states and territories advertise their destinations domestically is that we traditionally talk about the country, whereas Queensland will talk about the state. So the reason for that is that there are very few markets internationally that think about an international destination based on a city or a region, with the exception of landmarks like Sydney, Uluru or the Great Barrier Reef.

Senator MOORE: Mt Isa.

Mr O'Sullivan : Mt Isa, of course and the Gold Coast, maybe. It generally goes to the country. Then we talk about the different states and territories and destinations within it. Domestically, it's a different story because if I'm thinking of going to, say, Mt Isa for a holiday, I'm thinking directly about the city. I might say I want to go to the Mt Isa rodeo and stay at a particular accommodation there. They're very different. Our role primarily and the organisation's vision, if you like, is about memorability and desirability of the country. So we are at that ground level, and the states and territories are more at what they call tactical—that retail offering: 'Fly from Shanghai to Melbourne for $899 on Qantas or China Eastern,' for example. That's the broad based difference.

Senator MOORE: In the work that you do, have ever considered that Tourism Australia should have a role domestically?

Mr O'Sullivan : That's probably more a question for the government, but our clear mandate is international.

Senator MOORE: At the moment it is, yes.

Mr O'Sullivan : Our clear mandate is international visitation, and I think it works well because we go in and do the story of the country and then the states come in and do the story of their different destinations within Australia. Bearing in mind, when we were doing domestic advertising, it was less than 10 per cent of our overall spend.

Senator MOORE: How long ago was that?

Mr O'Sullivan : It was before my time.

Senator MOORE: Can you take that on notice?

Mr O'Sullivan : I think it was back in 2013 or maybe 2014.

Senator MOORE: It's not that long ago, but, still, it's a couple of planning periods ago. Are there links between your organisation, Tourism Australia, and the states? Is there a formal relationship? Do you have formal consultations and discussions with them as a part of your role?

Mr O'Sullivan : There are various levels. If you go to some functional examples, we co-locate with a lot of states and territories offshore. If you go into our London office, for example, you'll find Destination NSW and Visit Victoria—

Senator MOORE: All around you.

Mr O'Sullivan : Yes, they co locate, depending on the operations of their trade offices in a particular market. We all share the same research sources, the Consumer Demand Project. Also the way that we interact with travel agents internationally through the Aussie Specialist Program is that Tourism Australia employs the officers to do that, but they're paid for by the states. So, again, rather than two or three people going to see the same travel agent about Australia, there's one person doing it now.

Senator MOORE: It's a personal approach. It makes sense.

Mr O'Sullivan : Then, when you go to our marketing, when we do things like the Dundee example, we partnered with about five of the states territories, in particular, Northern Territory and Queensland, and Visit Victoria. Again, when we do our campaigns, we actually get cooperative funding from the states and territories as well. So there are various different levels that we work with them on. It's a very close relationship. We meet through forums. We have an STO and TA CEOs meeting. We do about four of those a year. We then have a similar forum for our chief marketing officers about four to five times a year, and then we also have another group which is more around international operations, which, again, meets four or five times a year.

Senator MOORE: So it's quite a close relationship.

Mr O'Sullivan : It's a very close relationship, and we also do things like aviation development. If you take Queensland, for example, we have partnered with Tourism and Events Queensland, Brisbane Airport and Cairns Airport on new aviation services. So we have a very close relationship with them on different levels.

Senator MOORE: Just on a tangent to that, a report was handed down last week about regional airports. There was a lot of research done. Was Tourism Australia involved in that in any way? I don't know in what way it would be, but you obviously knew there was a review going on into the way privatisation had impacted on airports across Australia.

Mr O'Sullivan : I'll have to take that on notice. Generally speaking, we are involved in discussions on tourism issues or particular topics. I don't know exactly on that one, so I'll take that on notice.

Senator MOORE: It was a report that was done by consultants. The organisation that funded it was the consortia of airlines, the actual customers of the airports.

Mr O'Sullivan : Was that done by the Australian Airports Association or Airlines for Australia and New Zealand?

Senator MOORE: The one with New Zealand in it, because we had—

Mr O'Sullivan : Again, I'll check for you, but, if it's done by a lobby group, which is effectively what that is, we're not always consulted, as opposed to, for example, a government inquiry into something like northern Australia or the like.

Senator MOORE: People have different views and there are conflicting views in the space, but, in terms of overall issue, one of the big issues was tourism. I am being parochial. In Queensland, it looked at the spine up the coast as well as Mt Isa, in terms of the operating ability of the airport.

Mr O'Sullivan : It may be something that our colleagues from Australia are involved in, because they do more policy or supply-side issues.

Senator MOORE: We'll have a talk to them. The budget saw some changes in your overall budget, and there's discussion about whether they're cuts. Apparently your organisation was quoted as saying, 'These cuts are fluctuations.'

Mr O'Sullivan : Foreign exchange fluctuations.

Senator MOORE: How do you plan for those? This is just a general question. These fluctuations always happen, and sometimes they're quite significant, depending on what's happening. With a couple of your campaigns, you have forward planning that goes out a number of years. Do you have an inbuilt program to respond to these fluctuations or do you just have to say, 'Gosh, we've lost that. Let's change our rates'?

Mr O'Sullivan : It's more the former than the latter. Basically, in 2015, we moved to a more consistent foreign exchange mechanism that our colleagues in DFAT, Austrade and, I think, the Department of Defence operate under. Basically, that mechanism gives us the ability in and around January or February, before the next financial year, to get an understanding of where the government BPR rates are versus our hedging. Therefore, we do have a visibility on what we're going to get not only in the next financial year but also obviously in the forward estimates. What I would say, though, is it's really important that you don't take the Australian number and then say, 'Right, our ability to advertise offshore diminishes,' because, often, when the Australian dollar strengthens, our appropriation may lessen in Australian dollars but our ability to buy media offshore actually increases. So it is quite complex because we spend a lot of money in 15 markets around the world. It's applied individually per currency of the market you're operating in, so it's not just the US dollar but—

Senator MOORE: So they don't use that as a standard?

Mr O'Sullivan : pounds sterling, the RMB, Japanese yen et cetera—

And therefore for us it's really more about what we have to spend in market, as opposed to what the Australian appropriation is.

Senator MOORE: So, are you relying totally on the government for your revenue?

Mr O'Sullivan : No, we're not. We actually raise about $50 million to $60 million per annum from commercial partners, predominantly through partnerships that we have with the states and territories, which we spoke about before, and we do a lot of significant work with airlines. We also do work with travel agents offshore, where we do cooperative marketing. We have a number of trade events that generate revenue as well.

Senator MOORE: So, in terms of the way you're maintaining a level, there's a certain amount that comes from the Australian budget. And the information that I have says that over the forwards there's been a reduction for Tourism Australia, even though you had a small increase this year—in 2018-19 you were provided an additional $5.1 million over the forwards, but in the longer term it was cut.

Mr O'Sullivan : It's not actually a cut, though—

Senator MOORE: Back to $35 million?

Mr O'Sullivan : it's actually an adjustment of currency.

Senator MOORE: So, if you have particular programs and a lot of your funding is project based so that you have things to do, you can plan around that but also seek partners to help you, if you have a program. We talked at length a couple of estimates ago about some of the big advertising campaigns. You build up a whole market that adds different things in, depending on the work. Is that how it works?

Mr O'Sullivan : That's basically it, yes, and basically we would go to an airline and say, 'Do you want to spend against this campaign'—a particular state or territory, travel agents—

Senator MOORE: And you'll say to the airline, 'This will be really good for you.'

Mr O'Sullivan : That's right. But they do work for them, our campaigns.

Senator MOORE: Well, I think it works. And certainly when you go into a lot of the airports they do have a tourism focus. They have displays about their attractions. So, it's good.

Senator STORER: It was put to me by the South Australian branch of the Australia Indonesia Business Council that they felt that visa costs in Indonesia, to come to Australia, was a barrier to potential tourists coming from that country. The base application charge is from $140 to $1,020. What is your understanding of the visa charge from Indonesia?

Mr O'Sullivan : I'll hand that over to my colleagues at Austrade to answer.

Mr Boyer : Obviously visa costs are an issue for the Department of Home Affairs, who have the policy responsibility. I think we generally make the argument that the lower the cost of something the higher the demand for it. That would be our general position. We have a lot of discussions with the Department of Home Affairs about visa costs but also about things like processing times and the length of validity of visas and all of those sorts of things. It's quite complex. It's not just around the cost; it's also about the amount of time that it takes for a visa to be processed and also whether it's a 10-year visa, for example. I think that figure of $1,000 that you quoted, or thereabouts, is for a 10-year visa, from memory. So yes, we have a lot of discussions with the Department of Home Affairs. We would certainly hold the view that the lower the cost the better off we'd be in terms of attracting visitors to Australia, and I think that would be shared by Tourism Australia.

Senator STORER: How does it differ for each market? Is it reflective of the domestic costs of processing in that country?

Mr Boyer : There are two standard products, I think. I don't want to inadvertently get something wrong that sits within another portfolio's responsibility. But there are two standard products that they offer. One is the cost of a visitor visa, or a standard visitor visa, and the other one is around the electronic travel authority. The electronic travel authority exists for countries like Japan, Korea and Hong Kong, which are regarded as lower immigration risk countries, I suppose you'd call them. It is much cheaper than the cost of processing a standard visitor visa. I think that's reflective of the actual amount of time taken to go through that cost. Again, it's probably a question better directed to the Department of Home Affairs.

Senator STORER: I'll perhaps ask another question, which might be more directly to you, Mr O'Sullivan. I'm interested in specific projects that are undertaken to provide in-depth understanding of the perception international visitors have of Australia. What's the ongoing work that Tourism Australia does there?

Mr O'Sullivan : We do a number of programs. Our primary research is called our consumer demand project. We basically talk to over 100,000 people every year and get their perceptions of Australia as a destination, but we also look at what are the key drivers for people who wish to take long-haul travel. We define that as out-of-region travel. We also look at the perceptions they have of Australia.

The perception of Australia is a country of great natural beauty. We have a fantastic offering in food and wine, backed by amazing produce and producers. We are a country that has very distinctive wildlife. Importantly, one of the key findings for us when we did our Dundee campaign was that we are known to be a very friendly and welcoming country. They're the four broad touch-points that come out of the research. We then also look country by country to look at what the key drivers are. Fundamentally, what you'll find across markets is that there are rational factors, like value for money, safety and security, and then you get into the more emotive factors, like food, wine, cultural attractions, restaurants and the like.

Senator STORER: And the experiences? Do you track the actual experiences of international tourists to confirm whether it's—

Mr O'Sullivan : Yes. We track it through a few things. The consumer demand project does track that. We also look at the MPS scores of our different cities versus some of their international competitors, and that gives you an understanding of whether someone has left Australia and would recommend where they have been to someone else. We also monitor a lot of our social media outlets as well to see what the general commentary around Australia has been by people who are part of our social media network.

Senator STORER: I am interested in the idea of growing more routes internationally, particularly from Asia. What's your perception of the status of the amount of flights between Australia and Asia versus a year ago? Are we tapping demand that could come about if the airlines were offering more flights?

Mr O'Sullivan : There are about 25 million to 26 million seats that come into Australia every year. The majority of those seats come out of markets like New Zealand and the UAE. But what we have seen in recent times is exponential growth out of China and Hong Kong. Those two markets grew. China grew by about 30 per cent last year in the number of seats coming into Australia. Hong Kong grew by about 19 per cent. What we're seeing now is a direct correlation between that growth and visitation numbers.

I think we're doing really well. A lot of this is really down to the airports, the state and territory tourism organisations and the airlines themselves. But every market has a different story. China has been growing more aggressively. We have gone to 17 cities from mainland China into six cities in Australia. We have seen some growth now starting out of Japan again, which is fantastic. Some of that is by the Australian carriers—in particular Qantas—growing services into Osaka from Brisbane and also Melbourne into Tokyo. So every market has got a different story to tell. I think we always want to get more. Once you make it easy for someone to fly point to point, they're more likely to pick Australia as a destination. Certainly, from our perspective, we're focused on working with those other parties over the course of the next few years.

Mr Boyer : I think you pointed out, Mr O'Sullivan, the China-Australia increase in flights. There was a direct correlation between the negotiation of the landmark open aviation agreement between China and Australia and the large number of additional seats that got put on that route over the course of the last 12 to 24 months since that agreement has been signed. It has an exceptional impact on the growth of aviation between those two markets. The department of infrastructure has quite a positive approach to ensuring that the bilateral aviation agreements they negotiate with other countries stay ahead of the demand so that none of the limitations that are imposed on particular routes are down to government but are down to commercial decisions that airlines and the aviation industry generally makes.

Senator STORER: I'd like to explore wine tourism a bit. I'm told the role of the cellar door gains more importance. What is the general feeling about international visitors' perceptions and experience in terms of wine tourism into Australia?

Mr O'Sullivan : Certainly, it's very good. Since 2014, we've been in market with a campaign known as 'Restaurant Australia', which is specifically aimed at international visitors who use food and wine as a key driver for travel. Included in that, obviously, has been a very hard focus on wineries in particular. In particular, we partner with Wine Australia and Ultimately Winery Experiences Australia, which have wineries that are tourism ready.

Again, our wine offering is seen as—we're classed as a new world wine, a destination. It's certainly something that's growing in perception. In markets like China, India and the UK, for those people who have been to Australia, they believe that our food and wine offering is as good as anywhere in the world—better than Italy, better than France. So the overarching answer to your question would be that it's seen as a very strong offering. The experiences are continuing to develop, and we're seeing—particularly in parts of Australia such as South Australia, Tasmania, Victoria, Western Australia, places like Margaret River and Swan Valley—that these experiences are now becoming more and more prevalent in the way we promote Australia. Take, for example, d'Arenberg Cube. That's something we are putting actively in front of creative campaigns and in front of visitors from markets out of Asia and also other markets.

Senator STORER: Do you have adequate funding to do so? Do you feel further funding would enable a more direct, immediate growth?

Mr O'Sullivan : On food and wine, we've been able to spend over $80 million over the last three years. That's a really significant amount of money to spend on promoting those assets offshore and we've seen a really good response to that. So, from our perspective, we're well funded to be able do what we're doing on food and wine. Whenever you ask a bureaucratic if he would like more money, you get a pavlovian response. But, in all honesty and seriousness, we've been able to invest significantly in promoting that message offshore.

Senator STORER: China has overtaken New Zealand as the largest importer.

Mr O'Sullivan : That's right.

Senator STORER: I think it's 1.39 million visitor arrivals. Surely, visits to other countries, like France, far exceed that 1.39 to Australia?

Mr O'Sullivan : It's interesting. Our big competitors for Chinese visitation are markets that are close to China, for example markets like Korea and Japan—and the United States gets about three million. France gets around about the same numbers as us. The discrepancy is not too big. There have been media reports that Switzerland gets more Chinese visitors. They don't; we get more Chinese visitors. We've been growing, on average, ahead of the nominal average of Chinese travel from outbound. That's been directly linked back to that earlier point, as I said before, around the increase in aviation links and the perception in China of our country as a clean destination with a big, blue sky and natural beauty. But it's obviously a very competitive market. China is a sought-after visitation market for not only ourselves but something like 120 destinations, all of which are competing to share a voice in mainland China at the moment.

Senator STORER: What about Indigenous culture as a demand in markets such as that, as a differentiation point we can have versus some other more established markets like Europe? Are we promoting it effectively enough? Do operators have the skill set to accommodate visitors?

Mr O ' Sullivan : On average, about 14 per cent of all visitors to Australia seek out an Indigenous experience, internationally. It's more skewed to the Western markets. In markets like the United States it's upwards of 20 per cent. So certainly those mature markets coming to Australia are more likely to seek out an Indigenous experience as opposed to the newer markets—for example, mainland China. Indigenous culture is something we put through all of our campaigns. If you look through Restaurant Australia, if you look through the overarching brand of There's Nothing Like Australia, if you look at Dundee, we promote Indigenous culture because it relates to the plank of people that we talk about when we say we're a friendly, welcoming country. We've also just launched a new product, in partnership with industry, called Discover Aboriginal Australia. That is 39 Indigenous tourism businesses that are what we call export ready: they're ready to be able to deal with different languages, international inbound tour operators and the like. That covers about 153 experiences from around the country. That's something we're certainly hoping that we can continue to grow over the years ahead.

Senator STORER: Is there any perception about the overnight flight from South-East Asia? I've noted the Singapore-Broome commencement of flights. I was just thinking, perhaps trying to be left field, about whether day flights from South-East Asia into the top half of Australia could be tapped more for ease of flight. There is the perception that an overnight flight is tiring. There may well be visitors in South-East Asia that would be up for a day flight to Northern Australia rather than an overnight flight to the south-east of Australia.

Mr O ' Sullivan : That's probably more of a question to ask the airlines than me, because they do the modelling on not so much the time of the flight but things like aircraft availability, the utilisation of the availability and then ultimately when they can actually land their aircraft into the airports into which they're flying. Generally speaking, our research shows that consumers look at Australia based on not so much when they'll get there—so 'What time do I leave my home and what time do I land in, say, Adelaide?'—but more at the country, the experiences we've got to offer and whether they want to do that. How you get here is almost the utility part of the booking. It's probably one that's more for the airlines than me. But we do see that, into major ports and some of the airlines like Singapore Airlines and the Chinese airlines into places like Sydney and Melbourne, and sometimes into Brisbane, you can get a day flight in between the markets.

Senator ABETZ: I have two questions. The first one is on trade. Can I be provided with details of the substantial growth in exports from my home state of Tasmania over the last year or so? Does anybody have those figures?

Mr Boyer : I'll probably take it on notice, if that's okay.

Senator ABETZ: All right.

Mr Boyer : We can go and have a look at what we've got state by state. But this is trade, not tourism—is that right?

Senator ABETZ: Yes, trade.

Mr Donelly : Austrade's trade area will be here from about 2.30.

Senator ABETZ: Right. So I should be asking at 2:30?

Mr Donelly : Yes.

Senator ABETZ: All right. And hopefully someone's been listening in, and as a result they'll have the answers. Then I was going to ask about the TPP-11. Is that also at 2.30?

Mr Donelly : Yes.

Senator ABETZ: Thank you. My second bracket of questions, to Tourism, is on the very exciting announcement made by the Prime Minister and the Liberal candidate for Braddon, Brett Whiteley, in relation to the $30 million investment in the Cradle Mountain precinct, which will, as I understand it, be a joint venture, with the state government also putting in $30 million; helping to enhance this iconic and indeed world-renowned tourist attraction within my home state of Tasmania. Is it on track—things going to plan? And is it on target?

Mr O'Sullivan : I'll pass that over to Austrade, because it's an infrastructure announcement.

Senator ABETZ: All right.

Mr Boyer : It's actually not in the trade and investment portfolio. My apologies again, Senator. I can either take it on notice or I can go and try and find an answer over the next half an hour and come back to you. Would that be okay?

Senator ABETZ: If you could, that would be very helpful.

CHAIR: And I'm sure someone's listening.

Senator ABETZ: Tasmania has had a boom in tourism in recent times, and continued new and enhanced offerings for the world market of tourism is very important. This will be a very important step in fulfilling that ongoing need for the tourism offering of Tasmania.

Senator McGrath: Senator Abetz, I can confirm the announcement was made last week by the Prime Minister when he was down in Tasmania. It is a $30 million investment from the federal government. Three million visitors visit Tasmania each year; it's worth $2.8 billion to the Tasmanian economy in terms of the money they spend. They spend 16 million nights in Tasmania. Turning Cradle Mountain into a destination similar to the Great Barrier Reef is what this exciting project will do.

Senator ABETZ: And, whilst we want to offer international tourists a great stay in Tasmania, the basic task of this investment is, of course, to grow jobs for Tasmanians and to enhance the Tasmanian economy.

Senator McGrath: Totally. That's what we want to do.

Senator ABETZ: Thank you. That's it.

CHAIR: Very speedy, Senator Abetz!

Senator ABETZ: As always!

Senator GALLACHER: What do tourists expect in respect to tourism infrastructure? You've done some research, have you? In your research, have you uncovered any information about what tourists expect from their visit in Australia, particularly in regard to tourism infrastructure? Have you done any research on that?

Ms Halbert : The research that Mr O'Sullivan announced earlier looks more at broad expectations and the sorts of experiences that our visitors want to have. Where we look at investment, we look at making sure that we are supporting international investment in tourism infrastructure that would satisfy those areas of interest. For example, if people are saying they want to come to Australia for a food and wine experience, then we talk to investors, using the Austrade international network, and propose projects that are in that space that we know that our visitors will want to enjoy and experience. We don't specifically conduct research asking them what infrastructure they expect; we just connect them in that way.

Senator GALLACHER: Let me go back a stage, then. In the 2018-19 budget, $45 million was set out in the Department of Infrastructure, Regional Development and Cities to improve tourism related infrastructure, supporting demand-driven projects to ensure the benefits of the government's investment can be multiplied across the tourism sector in regions. Is there research to underpin this expenditure or this modelling?

Ms Halbert : I'll ask my colleagues at Austrade to take that question, if that's all right.

Mr Boyer : That program—the Building Better Regions Fund, I think, is what you're referring to—sits within the department of infrastructure's portfolio responsibilities. I'm not aware of any particular research associated with that. I would make the point that infrastructure developed for tourists is also infrastructure developed for other citizens within those regions as well. But I'm not aware of any particular research that led to that announcement.

Senator GALLACHER: Did Austrade previously have responsibility for implementing programs to support regional tourism infrastructure?

Mr Boyer : We've still got some responsibility there in terms of our broader foreign investment role.

Senator GALLACHER: The question is: did you previously have responsibility for implementing programs to report regional tourism infrastructure, T-QUAL and—

Mr Boyer : Yes.

Senator GALLACHER: Were you consulted in advance of the decision to provide $45 million for this cause in the Department of Infrastructure, Regional Development and Cities?

Mr Boyer : As part of normal budget processes, yes, we were.

Senator GALLACHER: By whom?

Mr Boyer : I wouldn't comment on budget process, but I would say that the Department of Infrastructure is the lead agency.

Senator GALLACHER: I'm not asking you to comment on that; I'm just asking who you spoke to.

Mr Boyer : The Department of Infrastructure has put the initiative together, and it's under their portfolio.

Senator GALLACHER: Does that mean you talked to a bureaucrat at a lower level or a senior level or a minister? Who did you speak to? That's not a secret, is it?

Mr Boyer : We've spoken at a bureaucratic announcement and I understand there have been ministerial discussions, as you would expect with any sort of budget announcement of this nature.

Senator GALLACHER: So there were ministerial discussions. What's your title?

Mr Boyer : My title is General Manager, Government and Partnerships.

Senator GALLACHER: So who do you talk to?

Mr Boyer : I would talk to people at my other level—other bureaucrats, basically.

Senator GALLACHER: Do they have names or titles, or are they secret?

Mr Boyer : I'd need to take it on notice to see exactly what discussions we had.

Senator GALLACHER: Thank you. Do you have any idea over what time frame this $45 million will be rolled out?

Mr Boyer : It's part of the next tranche of Building Better Regions Fund, which I understand will be advertised this year or will go out to market later this year. I believe the projects, after they are determined, can be anywhere between one and two years in terms of length.

Senator GALLACHER: So who will be eligible to receive this funding?

Mr Boyer : Those details are still being worked out with the Department of Infrastructure.

Senator GALLACHER: Have you played any role in developing the guidelines to assess projects in this program?

Mr Boyer : We will, yes.

Senator GALLACHER: So the answer is no?

Mr Boyer : Not yet.

Senator GALLACHER: So there will be a consultation process with the Department of Infrastructure?

Mr Boyer : Yes.

Senator GALLACHER: And that's with the funding department, is it?

Mr Boyer : That's right, yes.

Senator GALLACHER: Are there any additional programs currently in place at the federal government level to support regional tourism infrastructure?

Mr Boyer : Not grants programs or funding programs of that nature. As I say, we have a particular focus in Austrade on regional infrastructure and in the tourism industry that we're partners with Tourism Australia on. That is about us working with state and territory governments to identify particular regional locations and connect them with investors from overseas.

Senator GALLACHER: If there was an infrastructure issue in respect to people driving from Yulara to Alice Springs—and a number of overseas drivers have unfortunately lost their lives, had serious accidence and probably been barred from hiring cars—and a series of rest stops was part of regional infrastructure, it that likely to be a proposal that would be funded under this sort of thing?

Mr Boyer : I would need to wait until we had the guidelines locked down, but certainly that—

Senator GALLACHER: It sounds like it would be in Infrastructure.

Mr Boyer : Yes.

Senator GALLACHER: Thank you for that. On 15 March 2018, the Minister for Trade, Tourism and Investment announced a $12 million bid fund to be spent over three years for business events. Who knows something about that?

Mr O' Sullivan : That would be us, Senator.

Senator GALLACHER: I understand there were substantial representations from the sector, which have been rewarded with this bid fund. Where did you find the money? Was it from Tourism Australia's existing budget or is it new money?

Mr O ' Sullivan : It's from our existing budget.

Senator GALLACHER: How will the $12 million bid fund be spent over the next three years?

Mr O'Sullivan : What's happened is that from 1 May applications have been open for—

Senator GALLACHER: Sorry, I'm asking you how it will be spent over three years. That's just a dollar answer.

Mr O'Sullivan : Sorry?

Senator GALLACHER: How will the $12 million be spent over three years?

Mr O'Sullivan : Sorry, I misinterpreted that. My apologies. It will be $3 million in 2018-19, $4 million in the following financial year and $5 million in the financial year 2020-21.

Senator GALLACHER: Thank you. So what is the original source of the $12 million? Where did it come from?

Mr O'Sullivan : It came from our operating budget. We believe that prioritising this particular side of the tourism sector is in line with our strategic plan, so we've looked at our operating budgets across our business and allocated the funds accordingly.

Senator GALLACHER: Perhaps on notice you could just say where you took the money from to allocate this $12 million.

Mr O'Sullivan : It would have been a combination out of—

Senator GALLACHER: Yes, I understand it was a combination. That's why I was asking you to take it on notice and provide the information for us.

Mr O'Sullivan : I was just trying to give you some answers.

Senator GALLACHER: Can you detail where the $12 million was taken from?

Mr O'Sullivan : I'll take it on notice.

Senator GALLACHER: On 17 May, the minister released a statement that declared 'Business Events Bid Fund delivers first win'. What is that about?

Mr O'Sullivan : We partnered with the Melbourne Convention and Exhibition Centre and the Melbourne Convention Bureau to bid for an international global public transport summit which will be held in 2021 in Melbourne. Our contribution of $250,000 was part of the bid to win that business for Melbourne.

Senator GALLACHER: Your website is saying:

Applications for the new Tourism Australia Business Events Bid Fund can be submitted via www.australia.com/businessevents from 1 May 2018, with access to the funds for successful applications available from 1 July 2018.

Mr O'Sullivan : Yes.

Senator GALLACHER: How much funding for this business event was received through the Business Events Bid Fund?

Mr O'Sullivan : Two hundred and fifty thousand dollars, but it has not been paid yet.

Senator GALLACHER: Okay. The dates appear to be a little out of sync. Additionally, their website for this conference advertises that applications to be host closed in March 2017, with Melbourne short-listed as a potential destination in October of 2017. It also says that the additional bidding phase ran from March 2017 to February 2018. If the funds aren't available until July, but the bid has already been submitted and identified as successful, how is it the case that the bid fund played any role in the success of it? You just haven't written the cheque—is that what it is?

Mr O'Sullivan : We've basically pledged our support to the bid by the Melbourne Convention Bureau. They then submitted that as part of their bid, and then they've been awarded that business, which comes in in 2021.

Senator GALLACHER: I know that's very confusing, but that sounds almost like a retrospective successful bid.

Mr O'Sullivan : We've supported business events in the past without this Business Events Bid Fund being in place. I can take on notice the actual timings for you if you like.

Senator GALLACHER: Excellent. Thank you. Perhaps on notice, what is the process for determining what applications receive funding?

Mr O'Sullivan : I'll explain that on notice. We'll provide you with the bid prospectus, which explains that in far more detail.

Senator GALLACHER: Thank you. Racing right along, does someone have some answers on the backpacker and global youth marketing campaign?

Mr O'Sullivan : Yes. I'll just get some notes. We are currently into or about to start the final year of our campaign in and around youth and working holiday-maker marketing. Our goal is that by the year 2020 we want to get expenditure for the youth market from $18.5 billion up to between $23.3 billion and $28.3 billion and, as part of that, to get working holiday-maker expenditure up to between $4.3 billion and $5.2 billion. Where we are currently in and around working holiday-maker arrivals is that we're up by two per cent in the numbers of arrivals to Australia, and our expenditure is up by 3.1 per cent.

Senator GALLACHER: We seem to have some difference of opinion there. Last year, 214,986 people applied in 2016-17, and it was down from 264,974 in 2012-13. We're on a track of decline here. Have we had about 50,000 applicants per year go down?

Mr O'Sullivan : As part of the broader national tourism strategy, we track arrivals and expenditure. You're talking about the applications for the visas.

Senator GALLACHER: People.

Mr O'Sullivan : We track people and expenditure when they're in-market, and you're looking at applications.

Senator GALLACHER: Yes, that's my question: is it true that applications are down?

Mr O'Sullivan : Applications have been down by about 2.8 per cent, but since we started the campaign we've arrested the rate of decline.

Senator GALLACHER: So since 2012-13 there's been about a 2.8 per cent decline?

Mr O'Sullivan : My numbers are as at December 2017.

Senator GALLACHER: The actual literal number of people coming is declining?

Mr O'Sullivan : The number of people coming has increased, but the number of applications for visas—remembering that, if you apply for a visa, that doesn't necessarily mean you use it—is down.

Senator GALLACHER: So there's a reduction in applications but the numbers are going up?

Mr O'Sullivan : Correct.

Senator GALLACHER: But that would tell you in some sort of quantitative research that perhaps you might be going to experience a problem sooner or later?

Mr O'Sullivan : That's why we've done some research—as I referred to at the last estimates hearing—in both the United Kingdom and Germany, which we're currently assessing.

Senator GALLACHER: I've got several questions on that. Has the quantitative research piece regarding youth and holiday-makers now wrapped up?

Mr O'Sullivan : Yes, it has.

Senator GALLACHER: What did the research reveal? Is that short statement or is that a long piece of research?

Mr O'Sullivan : No, I can do it in a really short period of time if you like. We looked at the UK and Germany markets—two very distinctive findings. In the UK, the issue we need to address in this coming financial year is that the audience, or pool of people who would normally take a working holiday are now wanting to get into the workforce in the UK quicker. So they have a different perception. In Germany, it's a different issue. Germans believe that if they come to Australia—as opposed to other destinations—there are too many of their fellow countrymen here. So there, it's looking at how we put a different story into that particular market.

Senator GALLACHER: At the previous estimates you said this piece of research would conclude in time for the next phase of the campaign. What is the next phase of your campaign?

Mr O'Sullivan : The next phase of our campaign starts from 1 July, next financial year. Basically, we'll use the findings of that research to look at—our primary tool that we use is a campaign called Aussie News Today. Since our last estimates, it's delivered around 300,000 direct leads to the industry of working holiday-makers. We're looking at how we nuance the message based on those qualitative and quantitative findings that we got from that research that I referenced.

Senator GALLACHER: The next financial year is, what, about a month away?

Mr O'Sullivan : It's 1 July, so about a month away. In different markets we go on different timings based on when we know people will book or start to consider their travel plans for the following year.

Senator GALLACHER: In what ways has the research influenced and changed the approach that is taken by Tourism Australia?

Mr O'Sullivan : The approach will be that we will still maintain the platform Aussie News Today, but it'll be the message we put into those two markets, which, as I answered earlier, is about saying to the UK the benefits you get from a working holiday. In Germany, it's more about promoting different parts of Australia where they don't think there are other people from their country in the market.

Senator GALLACHER: Is there any further research intended in this area?

Mr O'Sullivan : Not from ourselves. We have our consumer demand project that we do more holistically, as I've said earlier in today's hearing. From the youth perspective, we're completed.

Senator GALLACHER: What are the strategies in place to grow the working holiday-maker market? Is that a matter that goes before your organisation?

Mr O'Sullivan : It is. The primary tool that we're using is Aussie News Today. That really looks at using social media to put out content about the experiences that working holiday-makers and youth holiday-makers can have in Australia.

Mr O'Sullivan : It is. The primary tool that we're using is Aussie News Today. That really looks at using social media to put out content about the experiences that working holiday-makers and youth holiday-makers can have in Australia. I said earlier, as at 14 May, it's delivered over 300,000 direct leads to the youth tourism industry partners. We've already had almost 700,000 unique visits to the Aussie News Today pages on our websites, and over 23.7 million views of video content that talks about Australia. In addition to that, we then also work with travel partners in-market, like STA Travel in the UK and also Germany, to put together retail offerings for working holiday-makers and also youth travellers. We also have a partnership with BuzzFeed Mates, who have delivered about 350 pieces of content to almost 140 people around the world.

Senator GALLACHER: How much funding is there for each program this year and next year?

Mr O'Sullivan : That's $2½ million for our next financial year, and it was $5 million for this financial year. In addition to that, we also get partnership revenue.

Senator GALLACHER: Very good. We note in your response to questions on notice that employee rights and protections are not within Tourism Australia's remit. What is your research, or contact with the wider sector, uncovering in respect to concerns regarding both the safety and mistreatment of working holiday-makers?

Mr O'Sullivan : In the research that we did in the UK and Germany, this didn't come up as an issue, nor did the negative publicity that has been here, particularly domestically. It hasn't come through in our research—not that we've seen.

Senator GALLACHER: So you'd be contending it's not influencing young people's decisions to come?

Mr O'Sullivan : I'm not saying that. I'm saying it didn't come up in our research. We know that safety and security are a key part of any traveller's rational choice factor when they look at a destination, but, in the research we conducted, that didn't come up as an issue as to why—

Senator GALLACHER: It's not coming up on any government smart traveller website?

Mr O'Sullivan : We don't research smart traveller government websites; we've been looking at youth travellers in the UK and Germany.

Senator GALLACHER: So you're not interested in this issue; that's what I take from your answers.

Mr O'Sullivan : I wouldn't say that. We are interested in that. I'm just saying to you what—

Senator GALLACHER: But you've said it's not within your remit. I asked if you've come across it in any research, and your answer was 'we don't look for it'.

Mr O'Sullivan : No, my answer is that in the research we've just conducted it didn't come up as an issue.

Senator GALLACHER: I have a couple of questions about Beyond 2020. I think that's an Austrade area, isn't it?

Mr Boyer : It is.

Senator GALLACHER: How many meetings of the Beyond Tourism 2020 Steering Committee have there have been?

Mr Boyer : I'll just check my notes, but I believe that the committee has met seven times after the first meeting on 9 February this year.

Senator GALLACHER: Are there publicised committee terms of reference?

Mr Boyer : There are no published terms of reference. I can give you some information, though, if you're interested, as to the things the minister has asked the committee to look at in particular.

Senator GALLACHER: Okay—if we could it get that on notice.

Mr Boyer : Sure.

Senator GALLACHER: Could you please provide an update on what it's been asked to look at, and what progress it's made to date.

Mr Boyer : Yes.

Senator GALLACHER: In a press release, the Minister for Trade, Tourism and Investment indicated the committee would report to government in 2018. Given the first meeting was—

Mr Boyer : 9 February—

Senator GALLACHER: That was this year?

Mr Boyer : Yes.

Senator GALLACHER: So when do you think you will report?

Mr Boyer : That's a matter for the committee. It's an industry committee. Austrade does provide secretariat services. I think it's fair to say that we're expecting the report to be in the second half of 2018.

Senator GALLACHER: Excellent. The final area I've got is the Tourism Access Working Group. That's also to you?

Mr Boyer : Yes; we can answer questions about that.

Senator GALLACHER: On how many occasions has that working group met in the past year?

Mr Boyer : Off the top of my head—I can correct myself on notice—I believe it's met once, but that was only a matter of two weeks ago.

Senator GALLACHER: Okay—subject to clarification.

Mr Boyer : Yes.

Senator GALLACHER: How far in advance of the meeting are papers included in the agenda provided?

Mr Boyer : It's usually a standing agenda for the Tourism Access Working Group; it covers the same issues every time—or, at least, it covers the same broad topics every time, with specific issues raised on the day. It invariably entails a roundtable where each industry representative gets two or three minutes to put their particular issues to ministers present. As you would know, it's co-chaired by Minister Ciobo and the Deputy Prime Minister. It covers aviation and access issues. Invariably, we also have someone from the home affairs ministry to talk about visa issues, and also someone from Treasury to talk about taxation issues as well.

Senator GALLACHER: Perhaps on notice, could you advise the statutory attendees from the government?

Mr Boyer : Certainly.

Senator GALLACHER: The TAWG 'provides the government with access to a serious group of people interested in growing tourism'. What sort of projects is it being tasked with?

Mr Boyer : It's more an information exchange mechanism. It's really an opportunity for senior industry representatives interested in tourism but also in aviation and access arrangements to talk to ministers directly about what their concerns are, and hear from ministers directly about what the response is.

Senator GALLACHER: And it's very early days yet. Are you able to shine any light on what are the most significant opportunities arising out of this engagement?

Mr Boyer : I might take that on notice, Senator. What I might be able to do is provide something on notice about the broad responsibilities of the committee and the sorts of issues that are discussed, if that would help.

Senator GALLACHER: Excellent. Thanks very much.

CHAIR: I have a couple of questions. First of all, and I'm happy for you to do this on notice, can you provide updated tourism figures for Western Australia?

Mr O'Sullivan : I will take those on notice for you, Senator.

CHAIR: Thank you. Can you provide updated figures, and also some relative comparisons over the last, maybe two or three years? That is so we can see where things are trending up or down. Last time we talked, the Dreamliner was just coming in, and it's now been in for a couple of months. I've been fortunate enough to take it and it's a fantastic flight. Do you have any updated figures, or observations about its success or otherwise?

Mr O'Sullivan : I can't give you figures, Senator; that's something more for Qantas. But, anecdotally, from talking to our commercial partners in market and our own teams over in the UK, there certainly is a lot of excitement around the service. And, in a positive way, there's also a lot of talk about Australia as part of that, because it's gone a significant way to overcoming, I guess, the perception that people in Europe have of Australia being a multiple-stop destination to get to. Anecdotally, we understand that the bookings are very, very good. Certainly, again, the response from the trade has been very optimistic.

CHAIR: If you wouldn't mind taking that on notice. If you have any updated figures or information that would be very useful. One of the issues that's been somewhat controversial in Western Australia, and has forced cancellation of surfing competitions, and—we have heard—is impacting on tourism in Western Australia, is the issue of sharks. I don't know whether that's come across your radar at all.

Mr O'Sullivan : It doesn't come up in our research specifically. It doesn't come up, that we've seen, looking at our social media channels—it hasn't come up, specifically, either.

CHAIR: If you could perhaps take it on notice, and see if there's anything you have become aware of. I'm happy if the answer is no, but I thought I'd ask. And the final one is also on notice: one of the things we're having a look at in Western Australia is—in the North West at the moment, but also in the South West—what additional infrastructure is required to boost tourism? Obviously, there are things like ports down south, a regional international airport, and things like that. Do you have any research or any advice on what infrastructure could help us boost tourism opportunities? For example, in Exmouth—clearly Ningaloo Reef should be one of the world's wonders—it is very infrastructure- and resource-constrained. I don't know whether that's the sort of thing you look at, by state, but if you do, I would be very interested to see what your thoughts are for Western Australia.

Ms Halbert : Senator, we'll put it on notice. The Margaret River is actually one of the eight regional areas that's been identified in the regional investment partnership that Tourism Australia has with Austrade, and we've developed an eight-page scoping document that we use with foreign investors to talk about the benefits of the region, and also the opportunities. I will put that document on notice for the committee.

CHAIR: That would be very good, thank you, particularly because there's some discussion now that the expansion to an international airport may be delayed indefinitely—if that would be an issue—and also about whether we've got enough hotel stock in the South West region in particular for all ends of the market.

Ms Halbert : Recently, Austrade and Tourism Australia sent a team of people down to the region to scope out a potential foreign investor familiarisation visit, which is likely to happen in about 12 months time, and to work with the local councils and the Western Australian government to identify opportunities and start getting the region ready for us bringing in some foreign investors. We'll put some information on notice about that as well.

CHAIR: If you could. You're still obviously in progress, so, if you could, put on notice to provide a copy to the committee, when it's delivered, and also some of the things that they're looking at, where there might be some things that we could work together on improving. Are there any other questions for Tourism Australia? If not, that concludes, with our thanks. Oh, sorry, Mr Boyer.

Mr Boyer : I can provide an answer for Senator Abetz—or at least part of an answer, Senator; I hope it's enough for you. If not, I can take further questions on notice. There are two separate funding allocations around Cradle Mountain. One is for the $1 million that was administered by Austrade in consultation with the Tasmanian state government around the Cradle Mountain Master Plan, and the second is the $30 million announcement that was made last week. Obviously, if you're asking for an update on the $30 million, it's only just been announced, so it's early days, but we will keep a close eye on it, for obvious reasons. It has a significant impact, as you say, on tourism and visitation within the area, and we're very interested in the outcome of it.

In terms of the $1 million, I can tell you that the original funding was to bring the Cradle Mountain Master Plan to the investment-ready stage. It's been underway for the past year and will be completed within the next few months. The government's initial funding is supporting a range of technical, economic and environmental feasibility studies. Feasibility studies are underway for staff accommodation, visitor forecasting, updates and transport analysis. An EOI process for private investment in the Gateway Precinct is also under development.

Senator ABETZ: Thank you very much.

CHAIR: Thank you. That now concludes examination of Tourism Australia. I thank Mr O'Sullivan and Ms Halbert for your appearance here today.