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Mixed bag but no horrors for industry in Federal Budget

May 14, 2014 Corporate, Headline News No Comments Email Email

egtmedia59As details of the Federal Budget emerged last night, it became clear that the tourism industry had fared a lot better than, say, schools, hospitals and pensioners.

While over AUD 80 billion in Commonwealth funding will be cut from schools and hospitals over the next decade, tourism has been spared and Tourism Australia has been granted extra allocation for its staffing levels to grow to 1696, an extra 175 employees.

The 2014-15 Federal Budget includes AUD 130 million in base funding for Tourism Australia and AUD 13.5 million towards the Asia Marketing Fund.

A Ministerial statement said:

  • The 2014-15 Budget delivers a new AUD $43.1 million Tourism Demand-Driver Infrastructure Program to boost Australian tourism.
  • As the states and territories are best-placed to decide their tourism infrastructure priorities, funds from the Tourism Demand-Driver Infrastructure Programme will be provided to individual jurisdictions.
  • The Abbott Government will also allocate up to AUD 600,000 to transition responsibility for the T-QUAL Accreditation program from government to industry. Industry, not government, is the best judge of quality, and this funding delivers on a Coalition commitment to transfer the program to industry following a tender process.
  • The 2014-15 Budget delivers AUD 10.1 million for the Australia-China Approved Destination Status scheme to ensure that the experience of Chinese tourists in Australia continues to improve.
  • The Abbott Government will deliver AUD 2 million in funding for Australia Week in China (AWIC) to hold the event again in 2016. The decision follows the success of AWIC 2014, which was Australia’s biggest ever offshore trade, investment, education and tourism promotion event, involving 720 individuals from more than 500 companies and organisations.
  • The Abbott Government will deliver AUD 200 million in cash capital to the Export Finance and Insurance Corporation to support small and medium size businesses to successfully grow their exports. This will reverse the previous Government’s decision announced in the 2012-13 Budget.

In other Budget moves, smaller businesses will receive rewards for hiring older workers and companies will receive financial assistance to access export markets.

Airlines, which have agitated for the axing of the carbon tax, now have their wish – though it still has to pass the senate.

Smaller businesses, a category into which many travel agencies and tour operators fall, benefit from a 1.5% cut in the company tax rate, which falls to 28.5%.

Big business breaks even, as the cut in company tax cut is offset by a 1.5% levy to fund the government’s highly controversial paid parental leave scheme.

Fuel excise will rise, which could affect tour operators. The rise will have a greater impact on outback tourism, where distances travelled are greater.

Merging of Customs and Immigration will cost AUD 480 million with 480 jobs lost. That move seems unlikely to speed anyone’s progress through airports.

Another snippet: the Government will provide AUD 1.8 million in 2014‑15 to hold an Australia Week in China in Shanghai in 2014. The event is aimed at broadening and strengthening Australia’s relationship with China, consistent with the Australia in the Asian Century White Paper and Tourism 2020 strategy. Tourism Australia will lead the coordination of the event.

In a final, strange touch, the budget has detailed the cost of searching for the missing Malaysia Airlines flight MH370: namely AUD 90 million over two years from the current financial year.

In one of the first comments on the new Federal Budget, chief executive of the Tourism and Transport Forum, Ken Morrison, said it would help support the visitor economy.

“The government has wisely decided to reject the Commission of Audit recommendations to slash Tourism Australia funding, however further investment is needed to fully capitalise on the boom in Asian travellers,” he said.

“The government has identified tourism as one of five National Investment Priorities and we welcome that as a sign the government understands that tourism is an economic development strategy for Australia.

“The government needs to back its rhetoric with action to help Australia better capture the benefits of the booming Asian travelling class.

“The tourism industry should benefit from the continuing strong growth in revenue from the passenger movement charge – which is a direct result of increased tourism.”

The passenger movement charge (PMC) is the official name for departure tax.

“The PMC will grow by AUD 58 million this year and deliver more than AUD 900 million into government coffers in 2014-15 and more than $1 billion annually after that,” Morrison said.


Written by Peter Needham

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