FederalBudgetSubmission2017-18

ATEC©2017

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TABLEOFCONTENTS

Abouttheauthor 3Executivesummary 4Summaryofrecommendations 5Tourismexports–agrowthsector 7Barrierstogrowth 8Policypriorities 11Conclusion 15

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ATEC members collectively hold 20,000 years of experience in tourism exports

ATEC is a 45 year old industry organisation servicing a member footprint of thousands of businesses, small & large

ATEC members directly employ more than 400,000 Australians

ATEC members attract & service international visitors from over 50 countries and trade in more than 25 foreign currencies

ABOUTTHEAUTHORThe Australian Tourism Export Council (ATEC) is the peak industry body representing the thousands ofcompaniesthroughoutAustraliathatprovidetourismservicestoforeignvisitors.Whilstthetourismexportsectorisexperiencingpositivegrowth,ATEC’sroleistomaximiseopportunityforAustralianbusinessesinbothexistingandemergingmarkets,andtoensureanyimpedimentstothatgrowtharemanagedandkepttoaminimum.

Ourcorefunctionsareto…

§ Facilitatebusiness-to-businessopportunitiesforourmembers;§ Providebusinessdevelopmentadvice,opportunityandsupporttoourmembers;§ Fosterandpromoteexcellenceinservicedeliveryandbusinessbestpracticemanagement;§ Representthecollectiveviewsofourmembershiptogovernmentsandotherexternalstakeholders;§ Liaisewithindustryandgovernmenttofacilitatecohesionbetweencommercialimperativesand

policydevelopment;§ Raisetheprofileofthetourismexportsectortothebroadercommunity.

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EXECUTIVESUMMARYAustralia’s export tourism industry is now more valuable to the national economy than coal or ruralexports, and with international tourism spend growing at more than 10% a year the future looksextraordinary.InternationallyweareseeingmorepeopleengagedinglobaltravelwithdemanddrivenbyahugegrowthinthenumberofpeoplewhonowhavedisposableincomefromcountrieslikeChina,IndonesiaandIndia.ThelatestGlobalTravel&Tourism,GlobalImpactUpdatefromtheWorldTravel&TourismCouncilpredictsthe travel and tourism sectorwill remain resilient and continue to growat a faster rate (3.1%) than thewiderglobaleconomy.TheSouthEastAsianregionissettobethepowerhouseoftourismgrowththroughto2020andbeyond,and while China will continue to be strong, India is forecast to become the fastest growing travel andtourismeconomycloselyfollowedbyVietnamandIndonesia.With such strong inbound forecasts in the frame, it has never been more important for industry andgovernmenttoworktogethereffectively–ATECfirmlybelievesthatcross-portfoliocollaborationistheonlyway toensureall sectors touchedby tourismexportsand thebroadervisitoreconomyareable to focustheircollectiveenergy.Itisalsocriticalthatgovernmentandindustryarewellpreparedforthelong-term.Itistemptingtodeveloppolicyplatformsthataddressthecurrentsituation–orevenhistoricalissues.Withglobaltravelgrowingatsuchrates,Australiamustaddresssupply-sidechallengesthatwillpotentiallyexcludeusfromourpieceofthepieifignored.Furthertothat,wemustresistthetemptationtofocusallourenergyonChinaandtheSouthEastAsiaregion:wehaveseenbeforehowfinancial,political,medicalandcountlessothercrisescan“turn off the tap” frommarkets pegged as being economic panaceas. Australia needs to embrace theopportunitiespresented fromkeyemergingandgrowthmarkets, aswell as to supportand invest inourtraditionalWesternmarkets.With2017namedas theWorld TourismOrganisation’s Yearof SustainableTourism,wemustdeveloppolicythatisgrowth-focused,measuredandindustry-enabled.

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SUMMARYOFRECOMMENDATIONS

1. DemanddriversMarketinginvestment§ MaintainTourismAustraliafundingatreallevelsPassengerprocessing§ Investinfaceidentificationtechnologyatairports§ Allowforpremiumprocessingincludingoff-terminalprocessing§ Continuenegotiationofairservicesagreements§ Improvecustomsandimmigrationsystemstoallowforrapidexit;§ ReformtheTouristRefundSchemeConnectivity§ ExpandWiFiconnectivityacrossAustralia,particularlyinkeyregionaltourismhot-spots.Visapolicy• Aprice-competitiveChina10-yearvisa• Remove/addressfeeinequitiesinvisitorvisacosts• Considersinglefeeapplicationsforfamiliestravellingtogether• Consideroptionsforlong-term(orlife-long)visasforkeygrowthmarkets• Introduce/expandafee-for-servicepremiumoptionforfasterprocessingofvisitorvisas.• HonourthecommitmenttoreducetheWHMvisafeefrom$440to$390from1July2017• Rolloute-lodgementinallmarkets• InvestintechnologythatallowsfornativelanguagecompletionofvisaapplicationsTaxesandcharges§ FreezethePMCat$60for17/18fiscalyearandcommittoafullreviewofthechargeduring20172. Supply-sideimperativesCross-portfoliocollaboration§ ConveneaJointStandingCommitteeonVisitorEconomyExcellencewithrepresentativesfromindustry

andMinistersfromportfolioswhichareimpactedbytourismorthevisitoreconomyBuildcapacity§ AddanIndustryGrowthCentretotheDepartmentofIndustry,ScienceandInnovation’scurrentsixto

includetourism§ MaintainfundingforkeyresearchplatformsexecutedbytheAustralianBureauofStatisticsand

TourismResearchAustralia§ MaintainfundingforAustradetoensureongoingimplementationofkeyexportprogramsandactivities§ MaintainandimproveaccesstoEMDGbyimplementingtherecommendationoftheLee(2015)report§ Developanationalcampaigntoeducatethepublic(thevoter)onthevalueofthevisitoreconomy

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SUMMARYOFRECOMMENDATIONScontinuedLabourandskills§ Implementvisareformsthatallowforgreaterflexibilitytoallowworkermobilitytoeaseseasonal

challenges§ Investintechnologysolution(s)/apptomatchworkerstoemployers,tourismexperiencesetc-

locationservicesenabled

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TOURISMEXPORTS–agrowthindustry

VISITORS NIGHTS EXPENDITURE DIRECTEMPLOYMENT

7.4MILLION 251MILLION $38.8BILLION 580,000Source:TRAInternationalVisitorSurvey,Septemberquarter2016.

ThetourismindustryisproudofitscontributiontotheAustralianeconomy.Withinternationalexpenditurenowpeggedat$38.8billion1,itisclearthattourismisdeliveringonitsDeloitte(PositioningforProsperity?Catchingthenextwave) labelasoneofAustralia’s fivesuper-growthsectors2.Furthermore, internationaleducationisalsonamedasoneofthefive–whichhasnaturalsynergieswiththebusinessoftourism.Visitors from China are the world’s fastest-growing source of international tourism, with total tourismexpenditure by visitors from China increasing almost tenfold since the year ending 2000. Australia isenjoyingthefruitsofthisgrowthalongwithnumerousotherdestinations–mostofwhichareintheAsiaPacific region. It is interesting to note that, despite China delivering around 1.2million visitors in 2016,AustraliaisstillalongwaydownthelistcomparedtothelikesofThailand,SouthKorea,Japan,Singapore,Malaysia,theUnitedStatesandIndonesia3-whichillustratesthatthereisenormouspotentialforfurthergrowth.Tourism is projected to be among the world’s fastest-growing industries. According to the UNWTO,demandforinternationaltourismremainedrobustin2016despiteglobalchallenges.Internationaltouristarrivalsgrewby3.9%toreachatotalof1,235millionandsome46millionmoretourists(overnightvisitors)travelled internationally last year compared to2015.4Deloitte forecasts have tourismgrowingat 4%perannumfromnowto2033–thatis,morethandoublinginsizeoverthenexttwodecades5.TheUNWTOalsoreportedthat2016wastheseventhconsecutiveyearofsustainedgrowthfollowingthe2009globaleconomicandfinancialcrisis.Acomparablesequenceofuninterruptedsolidgrowthhasnotbeenrecordedsincethe1960s.Asaresult,300millionmoreinternationaltouriststravelledtheworldin2016ascomparedtothepre-crisisrecordin2008.Furthermore,tourismishighlyexposedtoglobaleconomicfactors,includingshiftsintheexchangerateandthe impact of financial turbulence in the global economy. Tourism exporters have been particularlyimpactedbysignificantchangesinconsumerpurchasebehaviour,including:• Thechangingsourcemarketswhereexportgrowthpotentiallies;• Increasedonlineandshortlead-timepurchasingoftravel;and• Majorshiftsinthedistributionsystemfortravelandtourism.Importantly for Australia, our traditional markets are also seeing strong growth. Trips from marketsincludingtheUKandUSAhavebothrecordedincreases6anditiscriticalthatourindustryandgovernmentsremaincommittedtothesemarkets.Asadestination,ourkeyassetsincludeourproximitytoAsia,beautyinournaturalassets,safetyandadivergenceofspokenlanguages,lowercostaviationandexcellenceinoureducationaloffering.TheDeloittereportacknowledgesthatwefacenumerouschallengesasadestination,butnotesthatinadequateinfrastructure,travellingaroundavastcontinentandaccommodationshortagesinkeygatewaycitiesareparamount.

1InternationalVisitorArrivals,TourismResearchAustraliaSeptember20162Deloitte(2013)PositioningforProsperity?Catchingthenextwave3TravelChinaGuide2016/ChinaNationalTourismAdministration4UNWTO,Sustainedgrowthininternationaltourismdespitechallenges17Jan20175Deloitte(2013)PositioningforProsperity?Catchingthenextwave6Source:InternationalVisitorsInAustralia:September2016

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BARRIERSTOGROWTHInherentlackofcross-portfoliocollaborationTourism continues to suffer by a lack of recognition by government of the sector’s contribution to theAustralianeconomy.Whilsttherehasbeensomeimprovementinrecenttimeswiththecollaborativeworkon the2020Strategy, the tourism industryneedsanall-of-governmentapproach toensure the sector iselevatedtoasimilarstatureasagricultureandmining.The“visitoreconomy”astourismisoftentermed,touchesallsectorsandisamainarteryforprosperityinregionalAustralia.Alackofeffectivecollaborationoftenresultsinduplicationofeffort,fragmentedapproachtobuildingcapacityandapoorunderstandinginlocalcommunitiesofthecontributiontourismmakes.VisitorvisasGlobalunrestandthethreatofterrorismhavechangedbordermanagementstrategiesenormously. Thenotionofmorerelaxedvisaconditions,particularly forcountrieshighon theDepartmentof Immigrationand Border Protection’s risk list, is challenged: both by government and the Australian population.However, it is critical for an industry like tourism thatwe remain committed to visa policy that deliverssimple, efficient, cost-effective and seamless outcomes. Simpler, faster visas translate into increasedvisitationandpositiveconsumersentiment.Theuseofbiometricsandotherfacialrecognitiontechnologywillbecriticaltohowweproceedwithvisareforminthefuture.The Federal government’s 2015budget announcement that visa feeswere againbeing increasedwasofsignificantconcern.E-lodgmentandothertechnologysolutionsmustsurelylowerthecostofvisaissuancefor government. Australia is a long haul destination for many of our key source markets. Conversionremainsourgreatestchallengeaswestriveforgreatervisitation,highyieldingbusinessandpenetrationofnewandemergingmarkets. It isthereforeimportantthatourvisafeesremaincompetitiveontheglobalstage. Manymarkets stillexperienceprocessingdelays,andATEChasbeenprovidedwithdirect feedback fromkey Chinese internationalwholesalers that the online lodgment process for China is just as lengthy andcumbersomeasthepaperapplication.Taxesandcharges–includingthePassengerMovementChargeThePassengerMovementCharge(PMC)was introduced inJuly1995(replacingthe“departuretax”).ThePMCwas introduced to recover the cost of customs, immigration andquarantineprocessingof inboundandoutboundinternationaltravellersandfullyoffsetthecostofissuingshort-termvisitorvisas.Modelling by the International Air Transport Association suggests that holiday visitors (as distinct fromthose travelling to visit friendsor relatives) aremost sensitive to departure taxes such as thePassengerMovementCharge(PMC),witheverypriceincreaseof10%estimatedtogenerateadeclineof5-7%inthenumberofleisurepassengerstravellingglobally.7It is important to remember thata visitorhaspaid for their ticket, their visa, the costsof their stayandexperiences– includingGST–andthenadeparturetax. Asacountrywiththesecond-highestdeparturetaxintheOECD,AustraliariskserodingitsglobalcompetitivenesswiththePMCinitscurrentform.ATECisa strong advocate of minimising the tax impact on international visitors – but concurrently supports atransparentapproachtoreviewingthepassengermovementcharge.

7 International Air Transport Association, 2013

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MarketinginvestmentconstraintsCountries across the globe are actively and aggressively vying for a bigger slice of the $USD 1.4 trilliontourismpie. Innovativeandsavvycampaignsfloodconsumers’ inboxes,social feedsandTVscreenswithstrategicmessagesdesignedtoconvertaspirationtoactualtravel.Australiahastoworkharderthanothernationstopenetratetheclutterofglobaltravelmessaging–wearea longhauldestination formostmarkets,and it iscomparativelyexpensive togetherecomparedtoourEuropean,AsianandAmericancounterparts.Assuch,ourcommitmenttointernationalmarketingiscriticaltoanypurportedforecastsforinternationaltourismgrowth.In the 2015/16 Federal Budget, the government committed to fund Tourism Australia to the tune ofAUD709millionovertheforwardestimatesto2019/20.However,thegovernmenthasindicatedthatitwilllook to reduce overall funding to Tourism Australia, at a time where competing national tourismorganisations are receiving record increases to their annual fundingallocation. Japan,NewZealandandIndonesia are all examples of neighbouring competitors with significant funding boosts: Japan with anincrease of 2.4 times its budget in the FY20168, New Zealand committing an additional $20m over fouryears9andIndonesiaquintuplingitsbudgettoRP1.2trillionin2016.10It is well documented that there is market failure when it comes to tourism marketing investment.Therefore, it is crucial that Tourism Australia continue to receive funding at levels which maintain itspurchasingpower andwhichenable it to effectively competewithotherdestinations, particularly in theSouthEastAsianandOceaniaregions.ExportMarketDevelopmentGrantcapsATECisavigoroussupporteroftheEMDGscheme.ItistheonlygovernmentsupportprogramofwhichweareawarethatphilosophicallysuitsSMEsintheexportservicessector.Itrecognisesthatbusinessesneedtobe flexible in their expendituresandevenwith themost carefulmanagement, some ideas takemanyyearstodevelop.SincethelastreviewofEMDGin2015,therehavebeenanumberofsignificantchangesintheAustraliantourismexportmarket. Industrywelcomedthecommentspresented in“Winning inWorldMarkets”, theCommonwealth’s last commissioned research paper into the EMDG scheme, including the effectivenessindicatorsandthenotionthattheschemehasapositivenetbenefit. Asthepaperstates,eachdollarofEMDGgeneratessome$13.50-$27.00ofexports.The EMDG scheme is fundamental to the realisation of tourism’s full potential. The recent Free TradeAgreementsandother tradenegotiationsunderwaywill serve to improveAustralia’s termsof tradeandglobalcompetitiveness.EMDGisacriticalcomponentthatwillcontinuetocontributetothegrowthfromtheworkthatgovernmentshavealreadyundertaken.The current provisions of the scheme result inmany SMEs being forced out ofmarkets after they haveexhausted their grant eligibility. With the cap currently at eight, this often results in businesseswithdrawing from markets that they have been actively trying to penetrate. Success in internationalmarkets is not a short-term investment and external forces including exchange rates have a significantimpact.

8TravelVoiceJapan(5Jan2016)9JohnKey(May2016)Budget2016:Tourismsectorgetsfurtherboost(pressreleaseviawww.beehive.govt.nz)10NoviantiSetuningsih(6Jan2015)IndonesiatoQuintupleTourismPromotionBudget(JakartaGlobe)

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AirportprocessingFirst impressions are paramount. Airport capacity, passenger processing, airside infrastructure andtechnologyallcontributetoatraveller’sfirsttouchofAustraliaanditspeople.Withairside challengesalreadyprevalent, it is of concern thatwithgrowing visitor arrivals toAustralia’sprimary international gateways, our systems and capabilities will be inundated and unable to copeefficiently.Thepotentialforgrowthininternationaltouristvisitationisheavilymitigatedby:§ inadequateinternationalgatewayaccess,particularlyinregionalAustralia§ inadequateresourcingattheprimaryandsecondaryimmigration/customsairsidecheckpoints§ poorlyadministeredtouristrefundscheme(GSTrefund)§ lackofpremiumprocessingand/oroff-terminalprocessingoptionsTaxesandchargesTheAustralian tourism industry comprises tens of thousands of small tomediumenterprises, aswell aslargemulti-national corporations–allofwhomarededicated togrowing theirprofits from internationalvisitors.Recent research from theInstitute of Chartered Accountants Australiahas shown that tax compliance iscosting the1.7millionAustralianbusinesses in the small tomediumsector$18.4 billionevery year, andrepresenting 1.2% of GDP and 14% of total tax revenue collected by the Commonwealth11. Whilst theFederalGovernment’sBudget2015/16announcementofa1.5%reduction incompany tax forSMEswaswelcome,ongoing compliance costs and the challengesof the absenceof a level playing field as foreigncompaniescompetinginAustraliaremainexemptfromlocaltaxesremainsacutelypresent.Global companies in both supply and distribution are syphoning profits off-shore at the same time asdiluting the market share for Australian small businesses through tax exemptions, consolidation oroperatingoutsideregulatoryframeworkssuchaslicensesandinsurances.LabourandskillsCurrent labour and skills shortages acutely felt by the tourism and hospitality sector limit its productivecapacity and hamper efforts to compete with other global destinations. Current policy settings haverestricted the tourismandhospitality industry’saccess toavarietyof skilledstaffatdifferentskill levels.Accesstoadequateandproperlytrainedstaffiscriticaltoensuringwehaveatourismworkforcecapableofgivingvisitorsaworld-classexperience.ATECsupportsthepositionofRestaurantandCateringAustraliainrelationtoworkforcereform,theSkilledOccupationListandfundingfortheYouthJobsPaTHprogram.12ConnectivityIntoday’sever-increasingrelianceonall thingsdigital,accesstoWiFihasbecometoppriorityfortoday’straveller. Australiamust keep pacewith global trends on providingwidespread coverage in all areas –improvedregionalconnectivitywillalmostcertainlyassistwithgrowingvisitornumberstoruralandremoteAustralia.

11 Review of the impediments facing small business, Institute of Chartered Accountants, May 2014 12Restaurant&CateringAustralia(2017)FederalBudget2017-18:SubmissiontotheAustralianGovernment

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POLICYPRIORITIESCross-portfoliocollaborationGovernments need to increase cross-portfolio collaboration on tourism issues within all levels ofgovernment.ATECrecommendsajointStandingCommitteewhichbringstogethertheMinistersfrom:• ForeignAffairsandTrade• ImmigrationandBorderProtection• Treasury• EducationandTraining• InfrastructureandRegionalDevelopment• PrimeMinisterandCabinet

• Employment• EnvironmentandEnergy• Finance• Industry,InnovationandScience• AgricultureandWaterResources

Joining the Ministerial representatives should be industry leaders from peak national and sectoralassociations,TourismAustralia,Austrade,state/territorytourismorganisationsandrelevantdepartmentalrepresentatives.TheStandingCommitteeonVisitorEconomyExcellence,orSCOVEX,meetstwiceperyearandisanintegralpartofthe2030strategyplanningandadriverofothersupply-sideinitiatives,includingcapacitybuilding.InvestmentinmarketingGlobal competitors are investing in tourism as an economic development strategy. Governments mustconsideropportunitiestoincreasetourismmarketingfundingrecognisingthepositivereturnoninvestmentitgeneratesforGDP,jobsandexportearnings.ATEC fully supports the activities and role of TourismAustralia. It is of concern that TourismAustralia’sfunding has decreased in real terms, although ATEC commends the government on its four-yearcommitment to TA funding over the forward estimates. ATEC urges the government to maintain itscommitmenttoensureAustraliaisnotputatriskfromincreasinglycompetitiverivals.VisareformVisa policy remains a key challenge for our industry. Finding the balance between border integrity andinhibitinggrowthfromemergingtourismmarketsiscriticaltolongtermeconomicgrowth.ATECrespectstheneedfortightlymanagedpassengermovementbutwealsoidentifyseveralareaswheresimple adjustment of policy levers would address issues and allow for sustainable growth – particularlyfromChina.Thetwoprioritiesfortourismexportsare:1. Positionforgrowth2. BeinternationallycompetitivePresentedoverleafisatablethatpresentsasummaryofkeyshort-termwinsthatdrivegrowthwithoutmitigatingborderintegrityplatforms.

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Visasubclass/sourcemarket/issue Recommendedreform(s)Visafeesandcharges • China - 10-year visa: be competitive with the price – it

should not be any more expensive to issue a visa with alonger validity. US 10-year visa is USD$160. (with a 2-yearpayablenominalfeetoupdatedetails)

• Examinethecurrentvisafeestructuretoaddressinequitiesin visitor visa costs between Australia’s traditional andemergingsourcemarkets.VisitorsfromMalaysia,HongKongand Singapore face an AUD20 service fee and visitors fromEuropecanapplyforfree,whilevisitorsfromourkeytargetmarket,China,faceanapplicationfeeofAUD135.

• Consider single fee applications for families travellingtogether

• Introduce/expand a fee-for-service premium option forfasterprocessingofvisitorvisas-providesafasteroptionforpassengers willing to pay for this service. A number ofcompetitor destinations are introducing this serviceresponding to shifts in trip planning behaviour and visitordemand.

Workingholidaymakers–417and462 • Committothegovernment’spromiseofreducingtheWHMvisafeefrom$440to$390from1July2017andfreeze

• Raisethevisaquotas(caps)inkey462countrieswherecapsare quickly exhausted upon release of annual allocations.Theseexhaustedcapsshowclearpent-updemandandcoulddrive additional visitors without any (or minimal)implementationcosts

Processing • Rolloute-lodgementinallmarkets• Invest in technology that allows for native language

completion of visa applications. ATEC commends thegovernment on its commitment toMandarin applications –we are firm supporters of this being extended to includeotherlanguages,inpriorityofmarketopportunity

Visainnovation • Lookatoptionsforlong-term(orevenlife-long)visasforkeygrowthmarkets toprovideacompetitiveadvantage for thedestination

TaxesandchargesThePassengerMovementCharge(PMC)was introduced inJuly1995(replacingthe“departuretax”).ThePMCwas introduced to recover the cost of customs, immigration andquarantineprocessingof inboundandoutboundinternationaltravellersandfullyoffsetthecostofissuingshort-termvisitorvisas.Modelling by the International Air Transport Association suggests that holiday visitors (as distinct fromthose travelling to visit friendsor relatives) aremost sensitive to departure taxes such as thePassengerMovementCharge(PMC),witheverypriceincreaseof10%estimatedtogenerateadeclineof5-7%inthenumberofleisurepassengerstravellingglobally.AspartoftheWorkingHolidayMakerReviewprocess,thegovernmentmovedto increasethePassengerMovementChargelastyearinabidtooffsetsomeofthelossinrevenuethatbecameapparentasaresultof flawed Treasury modelling in relation to the removal of the tax-free threshold for working holidaymakers. The uncertainty for industry – both here and off-shore – was concerning, and there is ampleevidence to illustrate the slowing in arrivals of working holiday makers as a result. However, industry

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congratulatedthegovernmentontheirwillingnesstostimulatedemandinkeyWHMmarkets liketheUKandwearelookingforwardtoseeingtheconversionresultsfromtherecentyouthcampaignrolledout.ThePassengerMovementCharge,nowat$60perperson,hasbeenundermuchscrutinyoflate.Industrycertainly supports a charge that is levied on the travelling individual that covers the increasing costs ofborder security and customs/quarantine. However, it is also well known that the PMC generates far inexcess of the passenger processing costs at our borders and the government is over-collecting forwhatshouldbeacost-recoveryexercise.Thatsaid,ATECisoftheviewthatitistimeforindustryandgovernmenttostopcirclingaroundthePMCandhaveaninformedandinnovativeexaminationofhowade-constructedandre-constructedPMCcoulddeliverforbothindustryandgovernment. Internationaltourismarrivalsandspendingaregrowing.ATECasserts that looking at this “tax” differently could drivemore revenue and potentially create savings inotherpartsoftheFederalBudgetifappropriatelystructured.It isstronglyrecommendedthatthegovernmentcommittoareviewofthePassengerMovementChargeduringthe2017/18fiscalyearwithaviewtoimplementinganewstructureinthe2018/19budget.However,intheshorttermATECasksthatgovernmentmaintainitscommitmenttofreezethePMCat$60forthe2017/18fiscalyear.Buildingcapacity–theneedforaTourismIndustryGrowthCentre Inordertomaximisetheopportunitythatagrowthintourismexportspresents, it isvitalthatbusinesseshave access to relevant, accessible and practical education and training. We need to foster thedevelopment of new and emerging products to ensure Australia’s offering to the global traveller isdesirableandexport ready.Australiamustbe inaposition to cater toa rangeofdifferentmarketswithdifferent expectations and cultural needs. A vibrant and progressive “international ready” programandtoolkitisessential. In2014, theFederalGovernmentannouncedthecreationof IndustryGrowthCentres.Asoutlined in the2015/16Budget,theprogramhasbeenallocated$94millionin2017/18.According to the Department of Industry, Innovation & Science, the Industry Growth Centres initiativedrives innovation, productivity and competitiveness by focusing on areas of competitive strength andstrategic priority. The initiative enables national action on key issues such as collaboration,commercialisation,internationalengagement,skillsandregulationreform13.GiventheaforementionedDeloitte identificationof tourismasoneofour fivesuper-growthsectors, it isclearthattheabsenceofatourismindustrygrowthcentrecouldbehinderingthesector’spotential.IndustryGrowthCentresaretaskedwithaddressingbarrierstosuccess,andtheirbroadtermsofreferenceinclude:

1.Identifyingregulationsthatareunnecessaryorover-burdensomeforthekeygrowthsectorsandimpedetheirabilitytogrow,andsuggestingpossiblereforms;2.Improvingengagementbetweenresearchandindustry,andwithinindustry,toachievestrongercoordination and collaboration of research and stronger commercialisation outcomes in the keygrowthsectors;

3. Improving the capability of the key growth sectors to engagewith internationalmarkets andaccessglobalsupplychains;and

13DepartmentofIndustry,Innovation&Science(October2016)IndustryGrowthCentres: www.industry.gov.au/IndustryGrowthCentres.

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4.Improvingthemanagementandworkforceskillsofkeygrowthsectors.

ATEC asserts that the various impediments to growth outlined in this submission could effectively beaddressed, along with other key capacity-building strategies by a Growth Centre for Tourism andrecommends thataGrowthCentrebeadded to thecurrent listof six to reflect the industry’senormouspotentialcontributiontotheeconomyovercomingyears.An example of industry-led programs currently being developed and rolled out which could be moreactively championedbyaGrowthCentre include theATEC industrydevelopment initiatives:KITE (Know-How for InboundTourismExcellence),ELITE (EmergingLeadersof InboundTourismExcellence) andBRITE(BuildingRegional Inbound TourismExcellence) programswhich all deliver on themuch-needed capacitybuildingforregionalAustralia.ATEChasledthechargeinthedevelopmentofcontemporaryandindustry-deliveredcapacity-buildingprogramsacrossAustralia. Theseprogramsfocusonregionaldevelopmentaswellaspersonnelupskilling,leadership,andinternationalcommercialreadiness.Research is essential at all levels of decision making. It is vital that adequate funding be allocated tomaintain research including Tourism Research Australia’s International Visitors’ Survey, the AustralianBureau of Statistics’ Overseas Arrivals and Departures and other key studies like the Tourism SatelliteAccounts. The role of Austrade in the tourism export sector is vital and ATEC urges the government tomaintainAustrade’sfundingtoprotecttheinvestmentinexportdevelopmentprogramsandactivities.ATECisalsooftheviewthatthereisaninherentneedtoaddresstheissuesaroundtourguidinginAustralia–another initiativewhichcouldbedrivenbytheGrowthCentre. Withthegrowth inChinaandongoingchallenges around guide availability, skills, training and cultural awareness there is much we can do toelevatetourguidetraininganddevelopment–andworkplacement–movingforward.LabourandskillsCurrent labour and skills shortagesacutely felt by the tourismandhospitality sector, limit its productivecapacity and hamper efforts to compete with other global destinations. Current policy settings haverestricted the tourismandhospitality industry’saccess toavarietyof skilledstaffatdifferentskill levels.Accesstoadequateandproperlytrainedstaffiscriticaltoensuringwehaveatourismworkforcecapableofgivingvisitorsaworld-classexperience.ATECrecommendsthefollowinginitiativesbechampionedtoaddresscurrentissuesinthelabourandskillsarea.ATECalsoreferstoRestaurantandCateringAustralia’sBudgetSubmission2017/18andsupportstherecommendationsproposed.• Nationalcampaigntoeducatethepublic(thevoter)onthevalueofthevisitoreconomy• Greatervisaflexibilitytoallowworkermobilitytoeaseseasonalchallenges• Technologysolution(s)/apptomatchworkerstoemployers,tourismexperiencesetc-location

servicesenabledPassengerprocessing• Investinfaceidentificationtechnologyatairports• Allowforpremiumprocessingincludingoff-terminalprocessing:userpayssystem§ ContinuenegotiationofairservicesagreementsthatenableAustralianandforeignairlinestoexpand

servicestomeetfuturedemand;§ Improvecustomsandimmigrationsystemstoallowforrapidexit;§ ReformtheTouristRefundSchemetoallowprivaterefundproviderstoprocessGSTrefundsto

outboundpassengerswhichwillenhancethevisitorexperience,streamlinepassengerprocessingandincreaseinternationalvisitorexpenditure.

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Connectivity Travellers are becoming increasingly autonomous as they facilitate their own passage from domicile toterminal to aircraft to hotel via hand-held or wearable technology. Consumer reliance on their smartdevice(s)haschangedthewaytheyplan,executeandenjoytheirtravel,aswellashowtheymanagetheirexpectations,sharetheirexperiencesandprovidefeedback.FreeWiFiinhotelsovertookparking,breakfastandswimmingpoolasthenumberonereasontobookbackin2015.14Furthermore,thedevice-reliantMillennialgenerationareofficiallythelargestgenerationinhistoryandhavesecuredtheirstatusasleadersintravelandtourism15.Withthatcomesthedemand(andexpectation)forconnectivity.GovernmentmustcommittoexpandingWiFiconnectivityacrossAustralia,particularlyinkeytourismhot-spots.MaintainandimproveaccesstoEMDGATEC supports theExportCouncilofAustralia’sproposal to increase thenumberofbusinessesaccessingtheEMDGscheme,andtoremovethecurrentcapofeight.Furthermore,ATECproposesthatgovernmentfacilitateEMDGreformsbyadoptingtherecommendationinthe2015EMDGreviewreport,CertaintyandConfidence16thatthebudgetallocationbeprogressivelyincreasedby$12.4millionperyearoverthenextthreeyears(2016–17to2018–19)to$175million.INCONCLUSIONATEC congratulates the government on its ongoing commitment to growing our tourism export sector.After a turbulent 2016 thanks to the backpacker tax, it is time to re-focus our collective energy ondevelopingpolicythatdrivesgrowth,investmentandemployment.Itistimeformaturediscussionsaboutreformstoexistingpolicythatdeliverrealbenefittobothindustryandgovernment,andpositionAustraliaasawinningdestination.Wethankyoufortheopportunitytomakeasubmission.Forfurtherinformationpleasecontact:PeterShelleyManagingDirectorAustralianTourismExportCouncilpeter.shelley@atec.net.au

14Forbes(3Aug2015)NiallMacarthy-MostTravelersConsiderFreeWi-FiTheMostImportantFactorInChoosingAHotel15Trekksoft(2017)TravelTrendReport201716MichaelLee(30June2015)CertaintyandConfidence:ExportsandJobsforachangingglobaleconomy–ReviewoftheExportMarketDevelopmentGrantsScheme