2 March 2016
Address to the Australia China Business Council Networking Day
Parliament House, Canberra
As introduced, I have the distinct pleasure of being responsible for tourism and international education for the Australian Government and, I must say, at quite an exciting time. The growth figures this morning that were released from the International Visitor Survey indicating an 8 per cent growth over the last 12 months and an 18 per cent growth in expenditure, are really quite exciting for the industry. Also, given the announcement earlier in the year that we saw the 1 million mark broken for the first time of Chinese visitors to Australia, is also a significant one.
It is an important part of the relationship between our two countries and obviously a strong part of the growth of the people to people relationships and the cultural relationships between our two countries. From my perspective, the more of us that visit each other, the better we get to know each other and therefore the stronger the links and the relationships that come from that.
Also in the other part of my portfolio which is international education, the largest proportion of students by country who come to Australia, come to Australia from China and so that is also an important driver in what is a very important growth sector of our economy.
My colleagues tell me that I have got a really good fun portfolio, tourism in particular and international education, but both of those sectors have been identified as two of the five super-growth sectors for the Australian economy over the next decade and so I have a responsibility. We need to make sure the settings are right, that the settings promote continued growth of both tourism and international education over the next decade.
Tourism is projected to grow in this country at 4.1 per cent per annum which is well ahead of the broader economic growth outlook which is sitting at about 2.5 per cent, and international education sitting at about 3.8 per cent. So both significant contributors.
The international tourism spend in the Australian economy is now more than 35 billion a year. As a contributor to the overall addition of about 100 billion a year it is a significant sector. One in 12 workers in Australia are employed in the tourism industry. That is a significant proportion and those numbers provide further weight to how important the sector is to the Australian economy.
International education, worth just under 20 billion dollars per year, and with a significant growth rate, provides enormous opportunity. The work that we have done over the last couple of years in the negotiation of Free Trade Agreements really has added to the growth of those sectors and provides significant potential for continued growth as well.
The China Free Trade Agreement, which came into force just prior to Christmas, not only opens up the opportunities for commodity trade between our two countries but importantly, in the services economy. Both of our economies are transitioning from commodity based economies more towards the services based sectors.
I was saying in Question Time just a few minutes ago that 120 million Chinese took an international holiday last year. As I indicated, about 1 million of those came to Australia. Now, two things; that number is projected to be 200 million by 2020, so if we continue to have the same proportion of Chinese tourists coming to Australia that figure of 1 million will be about 2. But one other thing that we are trying to do, and I would like to think that we can achieve it, is to actually grow that percentage. I think all the signs are there that we can do that.
The work that we have done through things like our aviation reforms, air services agreements between Australia and China, the opening up of secondary airports between Australia and China and the opportunities for new services to come in is a quite significant investment that is starting to appear in Australia, particularly in tourism. Things like the investment on the Gold Coast by the Wanda Group, which has actually precipitated a new service out of Wuhan province direct to the Gold Coast and I think it's changing the way that tourists actually access the Australian market and opening up new opportunities, particularly in regional Australia for new tourism investment and also new tourism offerings.
In the context of the relationship between our two countries, both international education and tourism will continue to play a significant role. I would like to see a continued growth in the relationship between our countries in international education in particular. One thing about international education is that it actually breeds generational relationships. I've spoken to so many people who have been to this country for an education. That education stays with them for a lifetime and it also creates the likelihood that their children and their grandchildren will, in fact, follow in their footsteps for that education.
With a high quality education system, which we have in this country, and a welcoming community we really do have the attributes to grow that market here onshore, but also the opportunity to extend our reach out into the region. If you look at the population in a developing nation sense, around the Australian region there is enormous opportunity for outreach in education.
In Indonesia, just prior to Christmas we were talking to them about almost a quarter of their population, 53 million students in K-12 out of their population of about 220-230 million; that's a significant portion, and all looking for education and their capacity to deliver in that space is constrained. That also exists in other jurisdictions in the region so the opportunity for us to continue, not only the growth of the industry here onshore in Australia but to develop outreach in partnership with other countries is something that we continue to strive to do in our trade negotiations and the conversations that we have with governments in the region.
So that we can continue to have some dialogue and you can hear what you would like to hear rather than what I will tell you, I will stop at that point and I think we are going to do some Q and A, so happy to take your questions.
Q & A session
Question: Congratulations on your appointment in international education portfolio, I remember 10 years ago we suggested we should have a Minister looking after international education. I'd just like to ask your view as to how you think international education can be better connected with other sectors, for instance tourism? And even when you look at the economic legacy of this, looking at attractiveness for cities, them attracting international education, one of the criteria they are using is in fact their ability to facilitate the parents to come here and to invest, for instance. So how are we going to do it in Australia, to keep up our competitiveness in the next five to ten years?
Answer: We are working at the moment on a national international education strategy, which we will release next month that looks at all of the issues across portfolios, to continue to enhance and grow the industry. And alongside that we will be also releasing, effectively, a marketing strategy - AIE 2025, which will work with that to continue to market the sector out to 2025. So there is a lot of policy that we are working on quite intensively at the moment in that space. All of the attributes that you talked about play into that - visiting friends and relatives are a significant input into our visitor economy - our tourism economy - at the rate of about two visits per student, per year. So we have just on half a million students in Australia from international destinations at the moment so you equate that to about a million visitations related to students, per year.
So there are strong links across the two and you are right, the conditions, the assurance that we maintain our high quality education system, the visa settings that align well with course periods and those sorts of things all need to be in the right shape to ensure that when students are making a decision about where they might go, whether it is here or the United States or the UK - us and those two countries being the top three globally in the international education space, they make the decision to choose an Australian provider. That's the task that we are setting ourselves at the moment. Our policy will be released next month.
Question: My question to the Minister today: You mentioned about education and the repeat Chinese visitors coming into Australia. So therefore what is, how our government policy and the visas can facilitate that? I know in America Chinese can get a ten year visa, just go in and out of America as a tourist. So do you think that will help with all those repeat visitors? Second how we have a system and supply. We are looking to 1 million increase to 2 million in years' time so our services sector how will it catch up and have sufficient supply and sustainable supply and also regarding those investors how we can provide a best cultural awareness? How can they understand Australian culture when they are coming in?
Answer: The visa issue is one that we continue to work on and you might be aware that we have announced that we are working on, at the moment, a ten year multiple entry visa. We are hoping to have that, for China, available later this year.
We have also recently opened a second visa processing centre in Chengdu to increase the capacity to process visas quickly and we know that can become an issue. So there is active work that is going on in that space because there is a very, very fast moving international visa market. It moves and so we are keeping a close eye on what other countries are doing and we know that even, on occasion, subtle changes can make a significant difference. We put in place a three year multiple entry visa with Indonesia just prior to Christmas and we saw very quickly the reaction to that so we are quite aware of that.
In the context of labour supply that is a significant issue for us in services, particularly in the tourism industry. We have a notional deficit in supply of labour into the tourism sector at the moment of about 38,000 per year. That's projected to rise out to about 125,000 within a decade which is of concern to us. So the question before about links between tourism and international education - training is a significant task for us in that space.
We are also looking at the opportunities, particularly with some of our regional neighbours, as to how we might work with them on labour supply and training to assist both Australia and those countries as part of some conversations we are having as part of our PACER Plus trade negotiations in the Pacific.
In the context of investment and cultural awareness, I think that's probably a little bit of work that needs to be done on both sides to be frank. I've been very concerned about some of the comments that have been made publically about investment into Australia, particularly in the agricultural space, but I can tell you that the message resonates across the economy that people who hear some very, very negative rhetoric ask me the question very directly; are you genuinely interested in international investment into Australia?
I tend not to use the word foreign investment anymore because it's used as an absolute negative in discussions but we have very, very thin capital markets in this country. Not only should we welcome international investment into Australia - we actually need it.
So making sure that those understandings are there, the cultural alignments are right is very, very important but also I think it's important that we as community leaders, Members of Parliament, make sure the things that we say demonstrate quite clearly to the broader community about the benefits.
I was speaking at the Outlook conference this morning and for every billion dollars in investment there's about 1000 jobs, is what we are measuring, for example, in agriculture. So there is a clear correlation; if we want to continue to grow our economy as we say we do we need to make sure that people understand the correlations between our aspirations and the need for investment in this country, wherever it comes from.