Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 27 June 1995
Page: 2392


Mr TICKNER (Minister for Aboriginal and Torres Strait Islander Affairs) (5.07 p.m.) —by leave—I present the supplementary explanatory memorandum and move:

(1)  Schedule, pages 5 and 6, omit item 10.

(2)  Schedule, pages 6 and 7, omit item 16.

(3)  Schedule, page 7, after item 21 insert the following new item:

"21A. Subsections 16(3) and (4):

Omit the subsections, substitute:

`(3) A claimant's provisional grant amount for a claim period is the amount worked out using whichever of the following paragraphs is applicable:

(a)if section 15 does not apply to the claimant—the amount worked out using the formula:

Adjusted eligible expenditure

——————————————-

2

where:

"Adjusted eligible expenditure" means the eligible expenditure incurred by the claimant during the claim period, reduced by:

  (i)if no part of that eligible expenditure was in respect of designated tourism services—$15,000; or

  (ii)if the whole or a part of that eligible expenditure was in respect of designated

tourism services (which whole or part is in this subparagraph called the "DTS expenditure")—the sum of:

    (A)$15,000; and

    (B)if the DTS expenditure exceeds $15,000—50% of the excess;

(b)if section 15 applies to the claimant—the amount worked out using the formula:

Adjusted eligible expenditure

——————————————-

2

where:

"Adjusted eligible expenditure" means the eligible expenditure in respect of new markets incurred by the claimant during the claim period, reduced by:

  (i)if no part of that eligible expenditure was in respect of designated tourism services—$15,000; or

  (ii)if the whole or a part of that eligible expenditure was in respect of designated tourism services (which whole or part is in this subparagraph called the "DTS expenditure")—the sum of:

    (A)$15,000; and

    (B)if the DTS expenditure exceeds $15,000—50% of the excess.

  "(4) If paragraph 14(1)(c) applies to a claimant in the claimant's first grant year, the formula for calculating the provisional grant amount for that year is:

Adjusted eligible expenditure

——————————————-

2

where:

"Adjusted eligible expenditure" means the eligible expenditure incurred by the claimant as mentioned in paragraph 14(1)(c), reduced by:

(a)if no part of that eligible expenditure was in respect of designated tourism services—$30,000; or

(b)if the whole or a part of that eligible expenditure was in respect of designated tourism services (which whole or part is in this paragraph called the "DTS expenditure")—the sum of:

  (i)$30,000; and

  (ii)if the DTS expenditure exceeds $30,000—50% of the excess.'.".

In relation to these amendments, and for the record, I will briefly put a number of matters before the House. The government is moving amendment No. 1 because it does not support the coalition's proposal which would allow the tourism industry to claim free samples. The government is concerned that the cost of this coalition proposal would be between $5 million and $10 million per annum.

  We also want to place on record that no industry sector is allowed to claim free samples given away in Australia, and to allow this amendment would be to give preferential treatment to the tourism industry over other industry sectors. The Australian Tourist Commission already funds these types of promotional visits which are, in any event, felt to be in the national tourism industry's interest. The government has some very serious concerns about the accountability of free samples for this industry sector.

  Government amendment No. 2 relates to the coalition's amendment which would allow the tourism industry access to joint venture facilities. The government opposes that amendment and is moving to withdraw the provision on the following grounds. The cost is estimated to be initially $2 million to $3 million which, on the scale of the Commonwealth's budget, may be relatively small but there is a very real concern that the cost may escalate quickly. Furthermore, large tourism operators currently excluded because of the $25 million export earnings upper limit would be able to gain access to the scheme through this facility. The scheme would also promote a number of developments which may not otherwise occur. Fundamentally, tourism operates through joint promotion anyway and the existing provisions of the act encourage this.

  It should also be stressed that the aggregation of three or more tourism amenities would qualify the group for the 50 per cent grant rate, thereby providing a means of circumventing the application of the 25 per cent rate to single-service providers. Finally, because inbound tour operators operate largely on a joint basis with providers there is the potential, under the current rules, for them to receive multiple grants for joint ventures for different components of the same promotion.

  Amendment No. 3 relates to the insertion of new section 21A. It is in response to the Democrats' and coalition amendment to the Export Market Development Grant Amendment Bill in the Senate which provides for a 50 per cent grant to single-service tourism providers. The government is opposed to the initiative of the coalition and the Democrats in this matter and will move to reinstate the 25 per cent grant rate provided for in the bill as originally introduced in the Senate.

  The cost of this amendment is estimated to be $5 million in 1995-96, $7.5 million in 1996-97, $9 million in 1997-98 and $9 million 1998-99. This places a very heavy onus on the coalition to justify these expenditure proposals. Very vociferous arguments are often put by the coalition in this regard. The government would say that they are often mindless arguments for cost cutting. This is an example of a significant increased cost. Again, the coalition says one thing and then says something very different in relation to the matter before the House.

  The government's approach to this matter is based on the findings of EMDG-ITES evaluation which included independent analysis by Price Waterhouse, Professor Ron Bewley, the head of the economics department of the University of New South Wales, and the Allen Consulting Group. The evaluation found that a portion of the tourism industry promotion did not create additional tourism and that it directed tourists who were already coming to Australia to particular facilities. This is the captive market consideration.

  The evaluation also found that there was a very strong interrelationship between individual promotion and generic promotion. It is a matter of record that the government already provides significant support for generic promotion through the Australian Tourist Commission. Given these considerations, the government considers that the 25 per cent rate gives fair and balanced access for the tourism industry. These matters have been the subject of very serious consideration within the government and they deserve the support of the House.