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Thursday, 17 December 1992
Page: 5396

Senator MAGUIRE (6.09 p.m.) —by leave—I move:

  That the Senate take note of the document.

The 1991-92 annual report of the Department of Tourism records 2.3 million visitors to Australia in that period. The report is interesting reading. It shows that since 1985—seven years ago—the number of inbound tourists to Australia has doubled. The target for the year 2000 is 6 1/2 million visitors to Australia from overseas every year. The report makes it very clear that export earnings from tourism are now worth $8.2 billion annually to the Australian economy. That figure rivals the total annual proceeds from sales of some of our traditional commodities to other countries. The tourism sector contributes 450,000 jobs to the Australian economy.

  It is very important to note that this report states that `international tourism is increasingly competitive'. In that context we have to look at the potential effect of a goods and services tax on the Australian tourism sector. The reality is—and the studies show it—that a goods and services tax would severely damage the Australian international tourism industry. In this context I refer to a report done by the independent Public Service Department of the Treasury, which has looked at the potential impact of a goods and services tax on tourism. The report identified a cost increase of 13 per cent for accommodation as a result of a goods and services tax. Dr Hewson's proposed goods and services tax would add 13 per cent to accommodation costs in tourism. If ever implemented, it would add 12 per cent to the cost of travel by aircraft or other means of transport.

  The reality is that such a tax would seriously reduce Australia's relative price advantage for international tourists. Australia would become a more expensive destination for overseas tourists compared with other countries. If implemented, the goods and services tax would narrow our cost advantage compared with other countries. The reality is that tourist brochures published overseas would record higher prices for tours and holiday packages to Australia. Prices in Australia would rise while prices in other countries were relatively constant.

  Australia is a long haul destination for tourists. Tourism is a very price sensitive commodity and anything in the form of a goods and services tax, for example, which added to the cost of tourism would reduce competitiveness and tend to reduce the demand for tourism to Australia because Australia would become less competitive. A crazy policy is being put forward by the Opposition in this country; it is proposing to implement a goods and services tax on a key export earner, a major generator of foreign exchange for Australia. International tourism is now worth over $8,000m annually to Australia and the Opposition has a nonsensical policy which would add costs to that industry.

  It is interesting to note that Opposition spokespersons in this place repeatedly claim that in the so-called Fightback package there would be offsets for the tourism industry because things like payroll tax would be abolished. The reality is that 85 per cent of the businesses in the tourism sector do not pay payroll tax now because there is an exemption from payroll tax for small businesses. So only 15 per cent of the producers in the industry pay payroll tax. Therefore, the 85 per cent who do not pay payroll tax cannot benefit from any reduction in it.

  Enormous damage would be done to tourism by the Opposition's crazy policy that will tax this export industry. When Dr Hewson makes his announcement tomorrow, I call on him to exempt international tourism from the goods and services tax. He must do that. International tourism is a major generator of foreign exchange for the Australian balance of payments. It is one way we can earn hard currency. Dr Hewson must avoid damaging this major industry by exempting tourism from a goods and services tax.

  Question resolved in the affirmative.