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Budget cut slammed as ‘highly disappointing’ for tourism

June 19, 2019 Headline News No Comments Email Email

Tourism bodies have condemned the AUD 35 million funding cut for Destination NSW announced in yesterday’s state budget, labelling it short-sighted and likely to put the state at risk of losing momentum in an increasingly competitive domestic tourism market.

Chief executive of the Tourism & Transport Forum (TTF), Margy Osmond said she understood the need for NSW to tighten its belt, given the softening of the property market and its impact on economic growth, but cuts to an industry which has continued to grow its contribution to the state were a false economy.

“It’s disheartening and short-sighted that NSW’s tourism industry, which is the envy of the other states, has had to bear some of the burden of the necessary fiscal restraint,” Osmond said.

“The competition between states for the tourism dollar – both from international and domestic visitors – is fierce and in an environment where the state’s main competitors Victoria and Queensland are either maintaining or increasing their investment in destination marketing, the decrease in funding for Destination NSW puts it at a distinct disadvantage.

Regional tourism. Jacarandas line the streets in Grafton, NSW

“While the numbers and yield continue to grow, NSW can’t afford to be complacent or take it’s foot of the gas otherwise the state risks falling behind the competitors and losing the mantle of Australia’s number one tourism state.”

Osmond said the decrease in funding for Destination NSW would also have an impact on business events.

“NSW has only recently opened a fabulous new state-of-the-art convention centre at Darling Harbour and funding is crucial in continuing to fill it year in year out. There are a number of hotel developments in the pipeline and the convention market will be critical in ensuring the success of these new ventures.”

The Australian Tourism Export Council (ATEC) was equally scathing about the NSW government’s cutting of the tourism budget.

“Despite the success of our export tourism sector, which has seen international visitation to NSW more than double in the past decade, the Berejiklian Government has seen fit to make a 20% cut to the budget of the very organisation which supports this success,” ATEC managing director, Peter Shelley said last night.

“In a fiercely competitive international tourism marketplace it is vital Australia maintains its profile and Destination NSW has been very successful in promoting NSW as a highly desirable destination.

“This is not the time to be cutting the budgets of our tourism marketing agencies and ATEC is highly concerned about how this cut will affect Destination NSW’s ability to continue to engage effective advertising campaigns in market.

“We are seeking more information from the Minister’s office on what this will mean to the industry and what impacts we should expect to roll out of this concerning move.”

Tourism Accommodation Australia called the cuts “short-sighted”, though its NSW chief executive Michael Johnson welcomed the budget’s AUD 71 million package aimed at providing more fee-free TAFE and VET courses, which he said was a step toward alleviating the chronic skills and labour shortage affecting the accommodation sector.

As for the AUD 35 million cut to the Destination NSW budget, “this move is short-sighted considering the competition for the tourism dollar from other states – in particular Queensland and Victoria,” Johnson said.

“Sydney in particular has 10,000 hotel rooms currently in the pipeline – now is the time we should be ramping up and promoting what our state has to offer.”

Glorious Sydney Harbour

On the good side, the NSW government has pledged AUD 71 million over four years for an additional 100,000 free TAFE and VET courses, which Johnson said included “70,000 fee-free courses for young job seekers combining work and study through a traineeship – something we have pushed for as a way to address the skills shortages the accommodation sector faces”.

“TAA NSW is currently working closely with TAFE NSW on developing specific recruitment strategies for young job-seekers including VET programs so any boost in this area is welcomed.”

Johnson said other budget positives included:

  • AUD 76.6 million for the Sydney Opera House renewal program and security upgrades.
  • AUD 167.2 million to relocate the Powerhouse Museum to Parramatta and expand storage at the Museum Discovery Centre.
  • AUD 113.5 million to rejuvenate the Walsh Bay Arts Precinct.
  • AUD 103.4 million for the Sydney Modern project to transform the Art Gallery of NSW.
  • As part of the Restart NSW Commitment, Regional Tourism Infrastructure receives AUD 103.7 million to fund critical regional tourism infrastructure.
  • AUD 25 million will go towards establishing the Byron Bay Sustainable Tourism Fund.
  • AUD 25.2 million to improve access to NSW national parks through upgrading and extending walking trails, improving visitor infrastructure and facilities, and introducing online and digital tools for virtual tours.

Written by Peter Needham

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