Budget Reforms to the Tourism Industry †MyAssignmenthelp.com

Question: Discuss about the Budget Reforms to the Tourism Industry. Answer: Introduction On 9th May 2017, the Herald Sun published an article titled; Budget 2017: Visa fees up, tourism funding to Tourism Australia down. This article takes note of the Federal Governments intended economic policy reforms which are likely to affect the tourism industry either positively or negatively. The negative effects of the said budget proposal include a slash of up to $14 million from Tourism Australias annual budget. Further, the government intends to progressively increase the application charges for visas over a period of four year- a move that has been criticized as a setback to the lobbies to make Australias visa fees competitive. Further, the news article notes with concern that federal government has so far failed to make good its commitments to create a National Convention Bids Fund of up to $10 million that has been sought by the Association of Australian Convention Bureau and the Tourism Accommodation Australia to enable the country compete with other countries for major con ferences. The writer of the article points out the fact that Australia missed out on 61 bids for international conventions in the year 2016 which resulted in the 11% decline in oversea visitors travelling to Australia. Finally, the article points out a positive attribute of the budget in the sense that government set aside funds to finance tourism-reliant sectors that suffered the aftermath of Tropical Cyclone Debbies and further that government expressed its dedication to build the Western Sydney airport and develop surrounding infrastructure such as roads and faster rail connections to support the airport. Analysis From the above, it is notable that the article principally revolves around the issue of monetary policies that government intends to adopt and their likely effect on the tourism industry. It is a no-brainer that tourism industry plays an integral role in the economies of the world. In Australia, tourism associated expenditures make average direct contributions of about 3.65 to the GDP and 4.7% to the employment rate. For the tourism sector to continue playing this important role in economic growth (both in terms of GDP contribution and employment rate) there is need for significant investment in the sector. It is therefore arguable that federal government appreciates this fact judging from the budget provision for funding the tourism-reliant sectors that were affected by cyclone Debbies and further funding to build the Western Sydney airport and putting in place infrastructure which will have a direct positive impact on the tourism industry. The graph shows that the total overnight expenditure by tourism have been on the rise; this is a direct positive impact of Australian tourism reforms. Further, as noted by the Business Events Council of Australia (BECA), the business events sector is very integral to the world economy as it injects significant amounts of money to participating economies worldwide. In reaffirming the views of the news article referred to above, BECA acknowledged that Australia is being edged out of the map on competitiveness for hosting international conventions. The International Congress and Convention Association noted that Australia dropped from position 7 to 13 between 2000 and 2012. On the issue of the increased charges for visa applications, reference is made to a study conducted by Oxford University on the impact of increase in visa charges on tourism. The study, taking into consideration data obtained from the UK Boarder Agency and previous studies, came to a conclusion that increases in visa fees had a marginal statistically significant effect on visa applications. Therefore, if the study is anything to go by, the Australian federal governments intended gradual increases for visa charges may be of little negative effect, though the lobbyists may argue otherwise. Recommendations Dwyer, Forsyth and Papatheodorou (2011) list infrastructural improvements, special events, ICT and destination marketing and promotion to be among the factors that contribute to the growth of the tourism industry. With these factors in mind, the Tourism and Transport Forum of Australia had published a report prior to the federal budget release. In this report, it is recommended that any policy reforms that are likely to affect the tourism industry should take into consideration factors such as whether such policies will encourage investment in the tourism industry and its related sectors and whether the policy affords Australia an opportunity to promote itself as a preferable destination of choice. From the foregoing, it is notable that government is making efforts to improve infrastructure relating to tourism such as the new Western Sydney airport and surrounding infrastructure. The government should however go a step further to ensure further policy reforms are adopted that will im prove other related infrastructure such as accommodation. Further, although the Oxford study noted earlier suggests that visa charges are not likely to have a significant negative impact on visa applications, the fees ought to be maintained in levels that will keep Australia competitive with other economies. Additionally, policies should be put in place to ensure the development of skills in the industry and address concerns that careers in the tourism industry are not long term. On the issue of bidding for hosting international events, the BECA stresses the fact that to win bids for such events, the government ought to apply more investments in this regard. BECA recommends the use of the subvention funding approach where funds are only applied to successful bids and therefore guaranteeing a return on the investment. The government must therefore re-evaluate its 2010 election promise and create the National Convention Bids Fund as sought by the relevant bodies. BECAs recommendations, which I concur with, are that besides setting aside the sum of $10 million per annum for the fund, the government should further adopt a wholesome approach within its ministries and departments to support the bidding processes. Conclusion In sum, it is noteworthy that, among other factors, the demand for international travel is dependent upon the destination in question. It is my considered view that creation of this demand is a function of the tourism industry players of the destination country who ought to create favorable conditions that will attract tourists. By adopting policies that improve infrastructure and promote investment in the tourism industry, the government would increase the competitiveness of the tourism industry which may in turn increase the demand. Further, it is also important to note that tourists are not only limited to those travelling for leisure. It would therefore be fundamentally wrong for the Australian government to attribute too much value to scenic improvements and forget neglect the economic importance of ensuring competitiveness in bidding for international events. The tourism industry is tangled with other socioeconomic variables such as politics, infrastructure and economic policies and therefore, these variables must be set right for the industry to succeed. Bibliography Anao.gov.au. (2017). Strengthening Australias Tourism Industry. [Online] Available at: https://www.anao.gov.au/work/performance-audit/strengthening-australias-tourism-industry [Accessed 16 Aug. 2017]. Business Events Policy Priorities: Driving economic activity through business events. [Pdf] Available at: https://www.businesseventscouncil.org.au/files/TTF0754_BECA_Policy_Paper_FINAL.pdf [Accessed 15 Aug. 2017]. Dwyer, L., Forsyth, P., Papatheodorou, A. and Cooper, C., 2011.Economics of tourism. Good fellow Publishers. Dwyer, L., Forsyth, P., Spur, R. and Ho, T., 2004. Economic impacts and benefits of tourism in Australia: a general equilibrium approach.Southport, AU: Cooperative Research Centre for Sustainable Tourism. 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