Opening Address to Destination Australia Conference 2016

Opening Address, Destination Australia Conference 2016

The Star, Sydney

E&OE

So, welcome everybody it's great to be here. Thank you to Tourism Australia for today's event, particularly John O'Sullivan, Tony South and the rest of the board - they're doing a really good job in my view. I had the opportunity to be with Tony in the US a couple of weeks ago and that was an excellent event organised from Tourism Australia, showcasing the Australian business effort to that important market.

It's a real pleasure to be here for the second annual Destination Australia conference and obviously my first as Tourism Minister. It's an exciting job to have duel responsibility for both tourism and international education - particularly given their status as two of the five super growth sectors of the Australian economy.

As the economy continues to transition there's no question that tourism and international education are going to play a significant role in the Australian economy following on from the construction sector of the mining boom.

Tourism now projected to grow at 4.1 per cent per annum over the next decade and international education about 3.8 per cent - both of those well ahead of the economic growth outlook at 2.5 per cent.

So that explains why even the financial media are now starting to talk about the tourism and education economy as part of their conversation which is, I think, really important, even yesterday, in Martin Place. So in the minutes released yesterday explaining why the cash rate was kept on hold the Reserve Bank outlined that while the demand for our mineral resources eases household incomes continue to rise in China, creating a lot more growth for our tourism economy. So, when financial institutions like the Reserve Bank talk about the tourism industry it demonstrates its importance.

It contributes almost 100 billion per year to the Australian economy, that's 3 per cent of our GDP. One in 12 jobs in this country are supported by the tourism sector, that's one million workers and 90 per cent of those are Australians and that's an increase from 87 per cent a couple of years ago. So strong growth in employment.

The release of the latest international visitor survey the day after the Reserve Bank meeting was also quite timely, revealing a record of $36.6 billion in international expenditure again driven by China. The spend from China increased some 45 per cent to reach a record high of $8.3 billion and this followed the arrival of one million visitors to Australia in a year for the first time in 2015.

In addition to China, record spend was recorded from eight other key markets, the US, New Zealand, Singapore, Malaysia, Hong Kong, India, Taiwan, France. We saw a 37 per cent increase in tourists visiting wineries, and a 25 per cent increase in tourists attending festivals and cultural events, and that was particularly relevant during, and in the context of, Chinese New Year.

Today I'm delighted to be able to release the latest National Visitor Survey which reveals overnight visitor expenditure of $94.5 billion, up 10.5 per cent and tracking now above the lower bound of our 2020 target of $115 billion for the first time.

The results also show that Australians are continuing the trend of choosing interstate travel ahead of overseas trips, with many opting to participate in outdoor, nature and health related activities.

In other good news for the industry, interstate travel has experienced a 10 per cent growth for the year, the largest increase since the survey commenced in 1998.

As our economy benefits from the rising global incomes and our dollar being in a reasonable position, we cannot be complacent. Areas such as visas, market infrastructure, labour and skills are critical to the industry's success and to capture the opportunities that lie ahead.

I was telling my colleagues in the Senate a fortnight ago that 100 million Chinese took an international holiday last year and about one million came to Australia. The number of Chinese taking an international holiday is projected to be 200 million by 2020. So if we continue the same proportion of that figure of one million arrivals, it will grow to 2 million.

But what we should be trying to do is to grow that percentage and I think there's capacity to do that. To do so we must collaborate with States and Territories and work closely across portfolios to get our policy settings right.

Many tell me that we're in a 'global race' on visa reform to attract international visitors, and I think that's right. We watch very closely what our competitor countries are doing and they, likewise, watch us.

So we're introducing a 10 year visitor visa for China and rolling out online visa lodging systems. Chinese nationals are already accessing SmartGate on trial basis, providing them with a faster, self-processing option in Mandarin.

Along with my colleague Peter Dutton, last year we announced a new Australia visa application centre in Chengdu as we seek to increase our capacity and also welcome more tourists from beyond Beijing and Shanghai.

Together with Andrew Robb and Peter Dutton we announced three year multiple entry visa for Indonesian visitors when we were there in November last year - a move that generated significant interest from travel agents who I met only a couple of weeks later at the Dreamtime event in Adelaide. They rushed over to tell me that their bosses had told them to significantly increase their business into Australia off the back of that visa reform. So it clearly indicates what that reform can do.

Similarly on aviation access, the work we've done through our air services agreement with China on the back of the China FTA has come to opening up secondary airports between Australia and China and with that new opportunities for arrivals so it's important so we continue to shore up our positon.

Demonstrated by the investment on the Gold Coast, by the Wanda Group, that's precipitated a new service out of Wuhan province direct to the Gold Coast. I think we need to look at that particular investment and supply chain very carefully. In my view it is changing the way tourists arrive in Australia and so it's something we need to watch in the context of opportunities for market growth.

It clearly demonstrates that that investment we've been seeking internationally, in particular, also drives visitation and increased numbers.

Since making tourism one of only five national investment priorities in late 2013, we've grown the tourism investment pipeline to over 34,000 rooms - record levels not seen in over a decade.

Investors are recognising the strength of the Australian tourism industry and conscious efforts by the government to attract investment initiated by Andrew Robb before we even came into office.

I need to pay particular tribute to the work that Andrew's done. As I said, before we came into office and since, working to build that investment pipeline. I've already mentioned the Wanda Group and new investments through The Jewel on the Gold Coast.

The priority now is to ensure that investment pipeline comes to fruition. Which is why we commissioned the Urbis Report to shine a light on the various regulatory barriers to investment at local, state and federal levels. We're working with states and territories to deal with those issues.

Austrade's tourism project facilitation service continues to provide assistance by helping investors navigate the regulatory framework, currently servicing five regional projects worth over $2 billion.

I have to say I was particularly pleased to see the Pacificus project, a $1 billion mixed use proposal outside of Gladstone, received approval last year. It just shows what you can do with that sort of effort and it also demonstrates how tourism can fit very nicely with a sensitive environment and, in this case, actually work to improve it.

Both local and international investment is going to be crucial if Australia is to remain competitive as a visitor destination and if we're to meet our growth requirements. That's a point I really want to stress given some of the rhetoric that we've had over the recent months.

It's not only groups like Dalian Wanda but China's Fullshare Group is upgrading the Sheridan Mirage at Port Douglas and has plans to develop two new resorts around the Great Barrier Reef.

Off the back of increased visitor numbers we must continue to make the case for improved product in our iconic tourism regions, supported by regulatory reform that reduces the cost of doing business. It's really important that we start looking at some of those projects being proposed as we did in Tasmania last week.

Another priority, particularly for me coming from regional Australia, is to encourage tourists to travel to see more and spend more. What those in the room might call yield. This includes yield in regional Australia, where 44 cents in every tourism dollar is spent, but I think we can do better.

We're currently seeing the lion's share of international visitors travel down the east coast of Australia at the moment. There's mixed results for NT, SA and WA, and one of the things I'd like to do is to even out that spread of new visitors into the country and I'm very happy to say that conversations I've had with respective state tourism ministers have been very productive in that space.

As more free and independent travellers emerge, we have the opportunity to promote greater tourism beyond the beaten track, not just off it but beyond it. It's not a pipe dream. We know that international visitors want what Australia has to offer and our beautiful and natural environments are a key part of that.

Which leads me to the new Tourism Australia Aquatic and Coastal campaign that was launched in New York on the 25th of January. That will be rolled out across our key markets but it includes some of our key drawcards like the Great Ocean Road in Victoria, Three Capes Track in Tasmania, Rottnest Island in WA, Gold Coast in Queensland, Katherine Gorge in NT, Kangaroo Island in SA.

It includes things like the Murray River and I was also talking to some operators who were working very much in regional Australia at Lake Eyre which has got more water in it than it has since, I think, 1974. And what a spectacular aquatic attraction that can be right now. Its unique, its time sensitive. If people want to come and see something that only occurs once or twice in a lifetime the opportunity is for us to market that through the interactivity of Tourism Australia's campaign, which is a fantastic imitative where tourism operators and businesses can send into Tourism Australia images of their attraction. There is information on the website to indicate to you how to best capture that image, to keep that campaign live and fresh and current and provide real opportunities for industry themselves to participate in the process.

It was spectacularly received in the United States. To sit with agents as I did at Business Week in the US a few weeks ago and hear them say how much they like the images, they didn't mind having Chris Hemsworth in it either, they thought that was pretty good, and obviously that presence of Chris has brought a significant flow through into international media.

So the value that were getting out of the campaign, I think, is something like $50 million worth of hits in the first week. So a great campaign and I'll be launching the campaign in China in a few weeks at Australia Week in China.

So we continue to roll that out. Restaurant Australia continues and the effect of Restaurant Australia is actually measurable. You can see that before we started the campaign we ranked 10th globally in that space - we've now moved to 6th for the perception of our food. So really quite important.

One of the things that's going to be really important for us in the growth of the industry is our skilled workforce and our labour force generally. We know that we have unfilled positions across the industry at the moment - projected to be about 38,000, John Hart tells me that it's more than that. But we'll need 123,000 by 2020 to meet our demand and John Hart tells me it's more than that as well.

But it just indicates that we need to make sure that we have an effective workforce. We have done a number of things to do that.

We've been rolling out improvements to Working Holiday Maker programs. We've commenced the inaugural Working Holiday maker program in China which allows 5,000 young Chinese backpackers to visit Australia and that's been very popular with those places taken up within minutes of them coming available and were working with the seasonal worker program in the Pacific and some of our close island nations.

My work with the PACER Plus negotiations, I can tell you, the Pacific island nations are extremely interested in getting access to that program and so their experiences to date have been very positive.

As well as securing those sources of labour we need to continue to work to secure employment for Australian workers. I said before that of the one million working in this industry 90 per cent are Australian, which is really good.

But our understanding of this as a strong and a positive career path needs to be very much part of our message that we portray to the broader community. We can't have a situation, as Andrew Robb's described to me on occasion before, that someone's working a tourism business turning over $4 million a year but they're doing that while they're looking for a real job.

These are really good and solid careers and 1 in 12 jobs in Australia come from this sector. It is obviously a positive and strong career and it's employing a million Australians which is a significant amount, making a huge contribution to our economy, particularly in regional Australia.

There's been a lot of discussion over recent weeks and months around the government's decision to change the arrangements around taxation for backpackers.

It's my delight this morning to be able to announce that we recognise the workforce is vital to two of our key super growth sectors - agriculture and tourism - and there have been a number of legitimate concerns that have been raised.

So we've decided that the proposed tax arrangements require further discussion to ensure that we don't lose our market share in this space.

We've already done some work within my office to see where we sit competitively with our neighbours that so that we understand that.

We have agreement from the Prime Minister that I lead a process that is cross portfolio to look at alternative arrangements that will work.

So I'll be working closely with my ministerial colleagues in Employment, Immigration, Agriculture, and Industry, to take a proposal back to the Treasurer for Cabinet consideration on how we might do this better.

So this is the beginning of a process, it's not a solution. But we really do need to look at addressing the situation and so I've written to the Prime Minister and he's given me his agreement to go ahead with that process.

We will be coming to you, to talk to you about your thoughts around this process. We obviously need to get this moving quite quickly but I think it's an important initiative.

We need to ensure that we don't, as the Treasurer sees it at this point in time, create a tax advantage status for particular workers on a particular visa. We don't want to do that and so it's important that we have another look, it will need to be revenue neutral given the current budget status.

So to be clear, I will work to prepare a revenue neutral proposal in consultation with Employment, Immigration, Agriculture and Industry Ministers that can be presented to the Treasurer for consideration by Cabinet in relation to the measure.

I am so delighted to be here and very happy to be able to let you all know that we're going to go down that process. I think that's a demonstration that we understand that tourism is a key sector for the Australian economy and its part of the change in the growth of the Australian economy.

It's been identified by a number of sources as one of the five key super growth sectors and what we're looking to do as the government is to facilitate this growth and ensure that it continues to make the contribution that it's projected to.

Thank you to Tourism Australia, John, Tony and the board for the opportunity to be here with you today and it's been a pleasure to participate in the conference.

Thank you.

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