Issues & Trends – May 2011

Mixed tourism industry response to Federal Budget

THERE has been a mixed reaction from the travel and tourism industry to the Federal Budget with the Tourism and Transport Forum (TTF) saying it has recognised the challenges facing the industry while the Australian Tourism Export Council (ATEC) complained it offered tourism businesses only “minimal” support.

Meanwhile AFTA chief executive Jayson Westbury said the Budget pro-vided “no big wins” for the industry.
He warned the Budget could have an impact on consumers’ desire to travel if associated speculation about interest rate rises proves correct.

ATEC managing director Felicia Mariani expressed concern about the Budget’s failure to provide extra
funding for the Export Marketing Development Grants (EMDG) program which, she said, was a failure to recognise increased pressure on the tourism industry.

“Measures such as increases to short term migration work to meet the industry’s labour pressures and the investment in skills, training and mentoring programs will have a positive supply side benefit, but the Budget provides minimal joy for the struggling tourism industry,” she said.

“The tourism industry, like manu-facturing and other export industries, has been hit hard by the rising value of the Australian dollar and this Budget provides little relief in the form of allowances to support the costs of going offshore to market and promote their products,” Mariani said.

“The Treasurer went out of his way to identify the impact the high dollar is having on the tourism industry and these EMDG grants are vital to helping tourism exporters remain competitive by offsetting some of the costs associated with trading offshore.”

Mariani welcomed the $10 million increase in Tourism Australia’s budget from $126 million in the current 2010/11 budget to $136m out to 2014/15; “however, global efficiency savings will see that increase eroded over the next four year period,” she said.

“As part of their contribution to the efficiency dividends called for across all government departments, Tourism Australia will be required to return $6.2 million back to government over the four year forward estimate period to 2014/15.”

She also agreed that the Government’s focus on increasing labour skills was positive. “ATEC welcomes the investment in skills and labour force development with the establishment of the National Workforce Development Fund and we look forward to working with the Government in addressing the critical needs of the tourism industry in this area,” she said.

The TTF statement on the Budget identified an “increase in funding for tourism” which, it said, “acknowledged the challenges facing the tourism industry”.

It welcomed the increase in Tourism Australia funding saying it will replenish funds brought forward for emergency campaigns to stimulate demand in key markets in the wake of the Global Financial Crisis and Queensland flooding.

He also welcomed steps to streamline visa processing included in the Budget and the commitment of $38 million to stage the Asian Cup finals scheduled in 2015.