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Speech to the Tourism and Transport Forum September 2008



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Minister for Resources and Energy, Minister for Tourism

TOURISM AND TRANSPORT FORUM SEPTEMBER 2008

Good morning ladies and gentlemen.

This annual forum in Canberra is a very important event for Ministers and Shadow Ministers to hear your concerns and ideas for tourism and transport in Australia and I welcome the opportunity to speak with you today.

Over the past 10 months as Minister for Tourism I have been making the case within the Australian Government that the tourism sector is a vibrant and vital part of the Australian economy.

This is an industry that employs almost half a million Australians and I am committed to making sure the sector has the strength and capacity to face future challenges head on.

And there are plenty of them.

High fuel prices and a strong Australian dollar have been taking their toll on aviation, inbound visitor numbers, the domestic drive market, and so on.

Tourism infrastructure is highly variable from region to region.

There are serious issues on both the demand and supply side of tourism.

I remain committed to working with the Tourism Ministers’ Council and the industry to ensure we retain momentum in pursuing solutions to those issues.

We need to have an eye to the future and that’s why the National Long-Term Tourism Strategy being developed within my Department is the Government’s major policy initiative.

On May 8 this year I announced the development of the Strategy - with a focus on the productive capacity of the tourism sector and supply side issues.

It is our job to establish a framework for the development of a stronger and deeper skills base for the industry, priorities for tourism infrastructure, and attraction of investment in tourism products and services.

We need to focus on what is needed to improve the quality and competitiveness of products and services, and the desirability of Australian tourism destinations.

This is just as important as marketing and distribution on the demand side.

The Hon Martin Ferguson AM MP

The Hon Martin Ferguson AM MP

17 Sep 2008

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In July, I announced a Strategy Steering Committee, chaired by Margaret Jackson.

TTF is represented on the Committee by Chris Brown and I welcome the contribution to the policy development process by TTF through discussion papers like Driving Tourism Demand and National Tourism Infrastructure Priorities.

We have to get this Strategy right because the tourism sector is a major contributor to the national economy and to many of our capital cities and regional areas and we need it to be healthy and vibrant for our future well-being.

Another issue facing the tourism industry is climate change.

The Framework for Action which was endorsed by the Tourism Ministers' Council in July this year sets out some key action areas:

z We need to understand where the industry is vulnerable and build its capacity to adapt.

z We need to ensure the industry is prepared for a carbon-constrained future by communicating

and reaching out to all the industry players. z We need to better understand our key markets and frame our marketing accordingly.

My Department is currently working on the implementation of this framework.

The Government's response to climate change is also relevant to the industry.

Central to the Government’s broader climate change strategy is the Carbon Pollution Reduction Scheme.

The Government released its Green Paper on 16 July and I know that many of you have been constructively engaged in assessing the implications for the tourism sector.

The Government has always said it will consult openly and genuinely and we will carefully consider your submissions because it is important to us to get the final design of the Scheme right for Australian industry, jobs, investment and exports.

The vast majority of tourism enterprises will not be directly liable under the CPRS but the tourism industry will participate indirectly in the CPRS as the cost of carbon penetrates the economy, and is reflected in the cost of tourism inputs, such as energy.

The Green Paper sets out the criteria underpinning which emissions-intensive trade-exposed industries receive assistance.

The Green Paper has international aviation 'netted out' of the Scheme but like most sectors of the economy, domestic aviation is planned to be covered.

The Government has always said that its objective is to have coverage as wide as possible so that the burden is appropriately shared across the economy.

I recognise the concerns of the tourism industry and the airlines when it comes to aviation, and they will be taken into account in the final design of the Scheme and other Government policy processes.

Like other industries, tourism is strongly affected by the state of the Australian and global economies.

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The impact on tourism of macro-economic conditions is being exacerbated by the relative strength of the Australian dollar and increased competition from emerging destinations in South-East Asia and the Pacific, facilitated by the growth in regional low cost carriers.

That's why, as Minister, I am championing a number of initiatives which will substantially improve the capacity of the Australian tourism industry to capitalise on growth opportunities such as the Chinese and Indian markets.

We saw earlier this month, with the release of ABS overseas and arrivals statistics, the significant growth in the Chinese and Indian markets relative to the softer growth and in some cases reduction in arrivals from traditional markets.

We have to continue to focus on modern, adequate and reliable tourism infrastructure to support these new markets.

In particular, efficient transport infrastructure is critical to the long-term competitiveness, profitability and growth of Australia's tourism industry.

My Department and I are working to ensure that tourism interests are at the forefront of infrastructure planning.

Likewise, I would reiterate that this approach is reflective of what I have been saying for some time now, that the industry needs to also look at supply side issues affecting the industry - this is what the Long Term Tourism Strategy is looking at.

The Government has created Infrastructure Australia to develop a strategic blueprint for Australia's future infrastructure needs and facilitate its implementation.

As we speak, Infrastructure Australia is examining the adequacy of existing infrastructure of national significance, including transport.

Infrastructure Australia will provide advice to Australian governments - State, Territory and Commonwealth - about infrastructure gaps and bottlenecks, identify investment priorities, and policy and regulatory reforms to enable timely and coordinated delivery of national infrastructure investment.

Infrastructure Australia's recommendations will assist the Government's allocations from the $20 billion Building Australia Fund.

Tourism will benefit.

In terms of increasing consumer knowledge for tourists and promoting quality in tourism products, the development of the National Tourism Accreditation Framework is also very important.

We are drawing on world's best practice tourism accreditation.

For example, the Tourism Ministers' Council has noted the work done by New Zealand in developing their Qualmark quality accreditation scheme and it will inform Australia's tourism accreditation policy.

Accreditation will give travellers peace of mind when planning their holiday and improve their experience.

Commonsense tells us that the quality of experience is essential to tourists.

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Market research backs this up.

That's why we need to have a variety of tourism experiences tailored to match the demand from the markets they target.

In recognition of the benefits gained through aligning government funding with state and regional priorities, the Australian Government is currently redesigning the Australian Tourism Development Program (ATDP) to ensure that funding contributes to strategic outcomes for the tourism industry and supports a broad national perspective.

This formed part of my Department's submission to the Australian Government inquiry into a new regional development funding program.

Many of you have expressed interest in the future of the ATDP.

I support the aims and intentions of the ATDP, but the truth is the Program needs a more strategic focus to ensure the greatest long-term benefit for the financial outlay.

In keeping with the theme of improving the Australian experience through a higher quality tourist product, Tourism Australia is ramping up its marketing of Australia to the global ‘experience seeker’.

These are travellers who want to take home unique and memorable experiences from their visit.

They are the type of traveller who gets involved in the destination and looks for a wide range of natural and cultural experiences they can engage with.

They also travel more widely, stay longer and spend more on their holiday.

To maximise the benefit from these travellers, Tourism Australia has identified seven key Australian Experiences to cater to this market and underpin our global marketing activities.

The National Landscapes Program, an initiative between Tourism Australia and Parks Australia to promote Australia's iconic landscapes is another important product concept for the “experience seeker” market.

Tourism Australia's marketing of Australia has been raised in my discussions with the industry since I became Minister, so I would like to take a little time to explain its role and how it is developing.

Tourism Australia's role is to market Australia, while marketing specific destinations is more appropriately a matter for state tourism organisations and the industry itself.

Tourism Australia’s role as the national tourism organisation is to position Australia globally in a highly competitive international market.

In coming weeks and months you will see the release of Baz Luhrmann's movie Australia and Tourism Australia's advertising campaign, building on the recognition created by the movie.

In November you will also see a new australia.com marketing website.

The website will be updated to be bigger, better, more user-friendly and with a more robust platform that will enable it to handle more traffic.

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This will build on some campaigns that Tourism Australia has already run on Facebook and My Space.

It shows how marketing is moving with the times.

But perhaps the next step is to consider whether the links between our marketing and distribution systems are strong enough.

What has been suggested to me is that Australia.com could provide a platform for distribution links in the longer term.

Let me now talk about the Export Market Development Grants Scheme for Australia's small to medium-sized enterprises to seek and develop export markets.

Businesses are eligible for reimbursement of up to 50 per cent of expenses incurred on eligible export promotion activities, less the first $15,000.

Since being granted full access to the EMDG Scheme in 1996, tourism businesses have benefited considerably.

In 2006-07, there were 446 tourism business recipients, who received a total of $13.3 million in grants.

During the 2007 election campaign, we proposed a range of amendments to expand the operation of the EMDG Scheme.

One of the key reforms that will benefit the tourism sector is to allow approved national, state/territory or regional not-for-profit development bodies, including tourism bodies that promote Australian exporters, to access the Scheme.

Legislation giving effect to these changes has been passed by Parliament, enabling not-for-profit regional tourism bodies to claim 2008-09 eligible marketing expenditure in grants paid in the 2009-10 financial year.

A review of the EMDG Scheme has been undertaken as part of the Mortimer Review into Australia's Export Policies and Programs.

The Review has been finalised and the Report has been provided to the Government with public release expected within weeks.

The Government is also conducting a comprehensive review of the Australian taxation system - the Henry Review - the most comprehensive review ever undertaken.

The review will include state and territory taxation.

As such, it provides an unprecedented opportunity for you to put forward your views about Australia's current tax system and your ideas for practical and productive reform to support the continued growth and health of the tourism industry.

As you know, my door is always open and I look forward to working with you in the future.

Thank you.

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