Tourism Australia Faces Massive Funding Cut
By Matt Alderton
May 9, 2014
When he took office last fall, Prime Minister Tony Abbott inherited AUD $123 billion in projected deficits from the previous administration, with government debt heading for AUD $667 billion. To solve the national budget crisis, he asked the National Commission of Audit to identify opportunities to reform government spending.
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The Commission's report, published last week, argues that Tourism Australia benefits primarily private companies and therefore should not receive public funding.
"As the benefits of exporting accrue primarily to the business undertaking the activity, the Commission considers that there is scope to reduce current Commonwealth assistance for exporters by ... halving funding for Tourism Australia," the Commission states in its report.
Currently, Tourism Australia receives approximately AUD $130 million in annual funding with which to promote travel to Australia. Supporters argue those funds are necessary not only to support private tourism operators, but also the larger Australian economy.
"The tourism and hospitality sector has been consistently identified as one of Australia's principal growth industries for the future, with the capability of employing thousands of new workers, generating significant foreign income and producing a strong flow of tax revenue for the government -- it would be very short-sighted if the Commission of Audit recommendations were to be adopted," Rodger Powell, managing director of Tourism Accommodation Australia (TAA), Australia's lodging industry association, said in a statement. "Destination marketing has become highly competitive and sophisticated in recent years and Australia is already significantly outspent in our principal source markets ... It is not simply about advertising, it is about working in our key source markets to ensure that Australia wins its fair share of business, and Tourism Australia has been doing that very effectively in recent years."
TAA not only rejected the Commission's recommendations; it countered them. "Tourism Accommodation Australia members call on the government to reject the Commission of Audit recommendations," Powell continued. "In fact, we call on the government to do the opposite of the recommendations and increase Tourism Australia funding ... If jobs and revenue are the key priorities of the government, to cut back the tourism and hospitality sector would be a counter-productive move."
Australia's national travel and tourism association, the Tourism & Transport Forum (TTF), echoed TAA's sentiments. "Tourism Australia's work is helping the tourism industry deliver $42.3 billion in direct GDP each year," TTF CEO Ken Morrison said in a statement, according to The Australian. "While there are a number of constructive suggestions in this report, halving Tourism Australia funding is not one of them."