Report says States waste millions by competing with each other for tourist dollars

The Australia Institute has released a report that says that Australian state Governments are wasting millions of dollars of taxpayer’s money every year, by competing with each other for tourists.

The Report says that in 2005, Australia’s States and Territories spent $134.7 million on tourism promotion, but that the results of their efforts were no more than a marker share shifting exercise, with no net gain whatsoever to the overall economy.

The Report also says that while the spend by the States and Territories may increase domestic tourism expenditure, a significant proportion of it in reality constitutes a gift from taxpayers to tourism operators that merely pits state against state.

It adds very significantly, “Indeed, both spending for domestic tourism marketing and major event attraction often serves only to shift tourists, events, jobs and associated revenue from one part of the country to another, at huge public expense.”

The author of the report, Christian Downie, said it was difficult to determine how much government agencies and departments spent on tourism because they claimed commercial-in-confidence when figures were requested, but added that given that this is public subsidy, there needs to be greater accountability and transparency.  

The uncommissioned report estimated that Tourism NSW spent $22.3 million on domestic tourism promotion last year, the most of any state or territory, followed by South Australia ($19.9 million), Western Australia ($19.4 million), Victoria ($19.1 million), Queensland ($18.3 million), Tasmania ($15.1 million), Northern Territory ($12.3 million) and the ACT ($8.3 million).

The report has been rejected by the Government and Tourism Industry, with departing New South Wales Tourism Minister, Sandra Nori, saying in the Sydney Morning Herald, “it obviously reflects an extreme and minority right-wing view of economics”, adding, “Tourism was worth about $23 billion to the Australian economy each year and I totally reject the narrow view that it’s only the tourism operators, inverted commas, that benefit.”  Ms Nori added, “Anyone that visits a town or city is going to go to a cafe, go to a newsagent, go to a pub and some retail.”

Chris Brown, the Managing Director of Tourism and Transport Forum Australia, told the Sydney Morning Herald that the report was a “slap in the face to the 250,000 Australians in regional areas that rely on tourism for a living, and it should be treated with the contempt it deserves”, adding “By promoting domestic tourism, state tourism organisations do not pit one state against another, but rather keep Australians travelling at home and spending their holiday dollars here where they boost our economy, not somewhere overseas.”

The Chairman of Tourism Australia, Tim Fischer, also told the Sydney Morning Herald said it was worth marketing states as tourist destinations to give the industry an edge on its biggest competitors, plasma televisions and poker machines, adding “Tourism is in a fight to the death against consumer white goods, against gambling.”

The Mole wonders what commercial operators think?

Report by The Mole