Speech to the Australian Backpacking Industry conference on the economic and cultural contribution made by their sector and by international visitors.
Check against delivery
I acknowledge the traditional owners of the land on which we meet and pay my respects to elders past and present. I thank Kevin and Neil for having me here to speak.
It’s a shame the Minister, Senator Colbeck, couldn't be here. But it was great to see my friend the Member for Lindsay, Fiona Scott MP on his behalf. Tourism is, substantially, a bipartisan policy area. Labor is ready to work with the Government on the issues that you discuss at this conference, and the issues that face the tourism sector more broadly.
We are delighted that the Government now has a dedicated Tourism Minister.
It’s also a pleasure to be here on behalf of Shadow Minister for Tourism Anthony Albanese, who had to be somewhere else today. Anthony asked me to pass on his best wishes to you all for a great conference.
There is no dispute as to Anthony’s enthusiasm for tourism. He’s always happy for any of you to contact him directly, as am I. We look forward to hearing about the ideas you generate over the next couple of days.
In speaking with you I’d like to talk about the importance of tourism, and particularly adventure and backpacking tourism, to the Australian economy. I’d also like to talk about some of the other benefits that our country gets from the work that you do and the businesses that you run. And I’ll talk about Labor’s approach to some of the challenges for the sector.
The importantance of tourism to the Australian economy cannot be stressed enough.
Tourism is our largest services export and generates $113 billion annually for the economy.
It supports 1 million jobs, more than half of which are employed directly in tourism related industries.
In the past year, more than seven million international visitors have arrived, collectively spending $30 billion on shopping, dining, tours and services.
There are 270,000 tourism businesses in Australia; 95% of them are small businesses.
Tourism businesses make up 13 percent of the over 2.1 million businesses in Australia.
I have backpacker hostels in my own electorate.
As well as providing an outlet for sale of travel packages and adventure tours, they provide employment opportunities and generate a lot of business for other local businesses in the area.
Near-term forecasts for the tourism sector in Australia are very positive. You will have seen new data to that effect released yesterday.
Although growth in the global economy is weaker than expected, international arrivals and demand for the Australian experience, have been growing above trend, according to Deloitte Access Economics’ recent ‘Tourism and Hotel Market Outlook – Mid year Update’.
This is being driven by the depreciation of the Australian dollar and a sharp fall in oil prices, which both increases income growth and reduces the cost of travel.
Conditions in the global economy remain supportive of international travel.
The US, the UK and much of the Eurozone are all charting a course back to trend growth following the Global Financial Crisis.
In Australia, arrivals grew by 6.6 percent over the year to June. Leisure travel remains the major driver of that growth.
The long-term forecasts are also positive for the tourism sector, particularly international tourism.
Last year Deloitte published a paper titled ‘Positioning for Prosperity?: Catching the next wave’. It's a great paper, very readable, and I encourage you to have a look at it.
In it the authors identified tourism as one of Australia’s five super growth industries over the next 20 years.
The size of the tourism industry globally is set to more than double over the next decade.
Much of that growth is predicted to come from China and from Asia more broadly.
By 2030, rising living standards will mean more than three billion people in our region will have entered the middle classes.
I'm told that inbound arrivals from China grew by 22 percent in the last 12 months, only marginally outperforming India which grew at 19 percent.
As the Productivity Commission noted in August in its draft services exports report, China implemented a tourism strategy in 2013 that encourages employers to promote the use of paid leave days, which is expected to boost outbound (and domestic) tourism. China is our second largest source of short-term visitors (after New Zealand). The Chinese lead the world in total international tourism expenditure.
Australia is in the perfect position geographically to take advantage of the growing Asian middle class and the demand for international travel that this is generating.
Further, Australia is a politically and environmentally safe destination. We are English speaking, and because of our multicultural heritage, we also offer many other languages.
Air travel in Australia is relatively cheap due to competition and the presence of low-cost carriers.
And the calibre of our education sector is also a big drawcard for foreign students. Education is our second largest services export and there is a symbiotic relationship between tourism and education services exports. The foreign students who come and have a good experience in turn encourage their friends and family to visit.
Importantly for many of you here today, we have a wealth of beautiful natural assets – a key driver for Chinese and Indian visitors, according to a survey that the Productivity Commission cited in the draft report I mentioned earlier.
Australia has nearly 60,000 kilometres of mostly unadulterated shoreline, an average of 3,000 hours of sunlight a year and a variety of climates. If you are in Melbourne you can sometimes experience them all in one day.
Lonely Planet has ranked Australia as number six on its ‘Best in Travel’ list for 2016, based on topicality, excitement and that x-factor.
Fremantle was ranked number seven on its best cities list, Western Australia ranked number 10 for best value and Melbourne, number 4 for most accessible.
Some of the most spectacular destinations are in Australia. Kakadu National Park, Uluru and of course the Great Barrier Reef in my home state of Queensland, to name just a few.
The Great Barrier Reef alone accounts for the equivalent of 65,000 full time jobs.
If we look specifically at the adventure tourism and backpacker sector, Australia has a reputation for providing a quality offering.
Australia is currently ranked 11th out of 28 developed countries on the Adventure Tourism Development Index. In 2010, we were ranked 15th, which suggests we’ve improved our offering.
We should not rest on our laurels. Our neighbour New Zealand is presently fifth, and has previously been in the top three.
The criteria for the Index point to the things that matter to the market, and suggest the areas upon which Australia, and the sector, should concentrate to develop adventure tourism.
Those criteria are sustainable development, safety, natural resources, health (and access to healthcare), adventure resources, entrepreneurship, humanitarian issues and human development, infrastructure, cultural resources, and the adventure image / brand.
It’s obvious that our country, with our natural attractions, welcoming and safe society, and the oldest continuous surviving culture in the world, deserves a place in the top adventure travel destinations.
And as our economy shifts from a reliance on the investment stage of the resources boom to a more diversified economy with greater reliance on services sectors, it is becoming even more important that your industry, and the tourism sector more broadly, continues to develop and to be a source of jobs and economic growth.
As I said, I will talk about the backpacker tax, but first I want to say something about the contribution that backpackers make.
Backpackers are not just an economic powerhouse of our tourism industry; their demographics mean they are culturally very important as well.
Whether they’re here as working holiday makers, on visitor visas or even travelling during uni or TAFE holidays, they constitute a very significant portion of the 7 million international visitors we receive every year.
Tourism Australia estimated that there were nearly 600,000 backpackers that entered Australia in the last financial year.
Largely they are arriving from the United Kingdom, the United States, France, Germany and New Zealand.
However, the number of those coming from China, Malaysia, Japan and other parts of Asia is increasing rapidly.
There are around 150,000 Working Holiday makers in Australia at any one time. We’ve seen demand reduce a bit lately, partly due to the improving conditions at home for some markets. The Turnbull government’s backpacker tax may also affect demand.
The Whitlam Government introduced the Working Holiday Visa in 1975 as a way of fostering closer cultural and personal ties between nations.
After the recent anniversary of Gough's death, it's timely to remember that legacy. And it's pleasing to also remember Gough was the first Australian PM to visit China, and that he had visited earlier, as Oppostion leader, even before the U.S. visit. It's good to see those two legacies - of opening up working holidays, and building our relationship with China, coming together.
Being a two-way system, the working holiday visa arrangement also gives thousands of young Australians the opportunity to experience life in other countries and cultures every year.
Since Gough's time, governments of both persuasions have progressively added new countries to the visa categories, with the 5000 Chinese Free Trade Agreement visas being the latest.
International visitors are not just important economically; they’re also really important for building strong people-to-people ties which pay lifetime dividends for the individuals and our nation.
We’re really proud of that legacy and right now we’re looking at ways to make it even more accessible to a broader group – particularly in recognition that the age limits haven’t changed since 1975 despite the way people live, work and travel changing dramatically since that time. Hopefully we’ll have more to say about that next year.
Your industry is vitally important to the Australian economy not just because of the revenue you bring in, which equates to billions of dollars every year, but also because the backpacker industry is a net job creator.
Research shows every working holiday arrival creates 0.212 full-time net jobs in Australia, with the current intake already supporting 50,000 full time jobs. Some of those workers may be in the room!
The Department of Immigration’s working holiday visa report found Working Holiday Makers are mobile, and willing to work in low-skilled and low-paid jobs unconnected to their longer term career aspirations or home employment. This also makes them a really important labour source particularly in agriculture and mining and in the future we will consider expanding the criteria to tourism and hospitality nationally, not just in Northern Australia.
There’s a particular urgency due to the shortage of 56,000 tourism and hospitality workers this year alone, and it’s only set to worsen. But backpackers, especially those with language skills will be particularly in demand for those jobs.
The tourism multiplier is $1.92 for every dollar it earns, more than mining (1.66), retail trade (1.81), and education & training (1.38).
Working Holiday Visa holders stay an average of 8 months, and earn an average of $5000 but spend $13,000, making them among the highest spending visitors.
Today’s backpackers are among the most sophisticated, educated, connected and mobile we have ever seen. They rightly have high expectations of Australia.
They also have more choice than ever before – more and more countries in our region are recognising the value of tourism as an economic driver.
That’s why Australia can’t be complacent and take this market for granted. If we don’t stay competitive on issues which matter to backpackers, our share will reduce.
That means government's role is to help lower the barriers for people to come here, and make it easier for them to stay longer and spend more.
That involves smart international marketing and embracing great technology for a great end-to-end experience for every visitor before, during and after their stay.
According to the 2013 Adventure Tourism Market Study, the tourism sector has been highly affected by information and communication technology in various ways.
Travelers tend to increasingly consume and produce online information before during and after their trips. As the demand for adventure tourism increases and spreads across a greater number of destinations, internet marketing is also growing in importance.
Tourism Australia’s GiGA Selfie promotion aimed at the Japanese market is a perfect example of using technology and social media to great effect.
Travellers stand on a designated spot and then use the ‘GIGA Selfie’ app on their smartphone to trigger a distant camera which captures them and the surrounding landscape.
A link is then emailed to them and they can share their image as a short video clip which starts as a close up selfie and pulls back to reveal their location.
It's a smart, innovative campaign. And it leverages an existing propensity to engage with technology when travelling.
69 percent of adventure travellers reported online research as their preparation method. The percentage of adventure travellers using Facebook more than doubled between 2010 and 2013.
Government has other opportunities - beyond supporting innovative marketing - to provide conditions that support tourism. Things like great public transport, fast broadband and efficient Customs and Airport queues all help to make for an accessible, attractive destination.
Operators are telling us they want help in attracting skilled staff, building language and cultural skills, and encouraging young people to see tourism as a career.
They also want the government to consider the impact of new shared economy entrants like AirBnB and Uber and get serious about regulating this emerging sector.
They want action on climate change because they understand the importance of the Great Barrier Reef, Kakadu and the Snowy Mountains to our tourism sector.
I’m pleased to say that the new National ALP platform, adopted at our recent national conference, addresses many of these issues, committing future Labor governments to pursuing visitor visa reform, skills development and support for new technology to enhance the visitor experience.
That platform is available online: we hold our conferences in public and we make our platform freely available.
Our platform also retains Labor’s focus on climate change, urban policy and the development of high speed rail, which will boost economic development, and also our travel industry.
Factors outside our country's control - such as the economic situation in source countries – will always have an effect too, but as a nation we can target our energies, we can mitigate some of those forces and better take advantage of our relative strengths, like our amazing natural environment, safety and security and friendliness.
There’s plenty of good news for your industry with a lower Australian dollar, more aviation agreements and heavy competition for airfares all helping encourage more people to come here.
But we also know from the research that things like the cost of visas, processing times and income taxes – things the Government can control - also affect perceptions of Australia as a preferred destination.
Labor believes everyone should pay their fair share of tax. The decision by the Government to cancel the tax free threshold for Working Holiday Makers could be counterproductive.
For one, it could simply push more people into the cash economy and exacerbate some of the problems that you know exist in relation to exploitation and underpayment.
Secondly, industry has told us that if people are earning less, they are likely to spend less in Australia, and take their savings and spend a few months in Asia on their way home instead, where their money will go further.
So we will wait to see the post-implementation data, and we understand the arguments for the change. But it’s pretty obvious that taking 32.5c of every dollar someone earns is not likely to increase our competitiveness.
That’s important in the context of a 10 percent drop in Working Holiday Maker visas being granted last year alone.
There have also been some changes to research and tourism data which could affect people in this room.
Labor thinks there is a strong case for the Commonwealth government to provide impartial, accurate and comprehensive data across tourism sector measures.
In particular, the long running Survey of Tourist Accommodation, in which I think many of you will have participated, was a very valuable data set.
I am hopeful that the government will be able to provide permanent funding to it again so that it can continue past this year.
After all, this information is critical to your business planning, and also to people seeking to invest in your industry, to tourism organisations and to government.
One last aspect I will touch on is the work Labor is doing in public transport, as backpackers in particular are heavy users of it.
Parliamentary Library figures show over a million international visitors use Australian public transport every year.
But as many of you will know, as operators providing front desk help to travellers, there’s a lot that could be improved in Australia.
You still, for example, can’t get a train from Melbourne Airport into the city or Perth Airport to the city. That’s ludicrous in a modern, developed nation.
World class cities have world class public transport. Think of London without the Tube, New York without the subway, or Paris without the Metro.
That’s why we’re continuing to advocate for great urban public transport projects like the Melbourne Metro, Brisbane Cross River Rail in my electorate, and the Perth Airport train.
And we’re also really pleased that the Coalition Government have - almost literally - got on board with the Gold Coast Light Rail project.
That’s the kind of bipartisanship that I am sure both Richard and Albo are happy to provide for great initiatives in the tourism sector – so keep your ideas coming.
We’re here to help, our doors are open. Feel free to send your ideas or proposals to me and Anthony.
And finally, I want to say thank you. Thanks for all that you do for the industry.
I hope you have a constructive and fruitful conference.