Thank you very much and thanks for the opportunity to be here tonight, it’s a really great pleasure. I think TTF was one of the first events I did after being sworn in so it’s good to be back again.
I must acknowledge my good friend Stuart Ayres who has all the good time portfolios. And my new colleague, in fact I’m not sure if he’s still one of ours or one of yours, Trent Zimmerman, congratulation on joining us in Canberra, or back in Canberra as you’ve had a few incarnations. And to perhaps the proudest dad in New South Wales, a former colleague of mine Bruce Baird, it’s good to see you again after a while. Also to Tourism Australia chairman Tony South and the other members of TA who are here tonight.
It’s really good to be here, I’ve spent an awful lot of time on the north island lately I must say… well that went better than it did last night! I had a group of buyers from 25 nations around the world and I think it was my third incarnation of the joke before they actually got it. At least somebody in the crowd tipped it over the edge for me.
Tourism is a really important sector demonstrated by the fact that the Prime Minister appointed the first ever Minister for Tourism and International Education, which are two of the strongest growing elements of the Australian economy. You’re right to identify tourism in that space and it’s projected to continue to be that way for a considerable period of time. It’s an indication of how we see and position the national economy.
Tourism growth is projected to continue at 4.1 per cent over the next 10 years and its well ahead of what the overall economic growth rate in the country is. International education grew at 6.6 per cent last year and in that space the opportunity is immense for this country to provide a quality offering into our own near region in the order of close to 3 million people that are looking for a high quality safe education experience and service. There are good opportunities there.
When you consider the 600,000 international students in Australia in the moment, or close to that, and on average a bit over 2 visitations per student per year, 1.2 million visitors come through that space – that’s where the alignment sits.
So, a really important part of the economy and will continue to be as the economy evolves and changes away from the construction phase and mining, and an opportunity for us to continue to grow in particular the services sector of our export industry. At a national level the economy is 70 per cent services in Australia but our exports are only 17 per cent. So the opportunity to balance that is quite significant and tourism and international education will together play a significant role in the growth of that tourism offering.
I just heard before we started the event tonight that we’ve finalised arrangements with China, so the China FTA will come into force of the 20th of December which is great news for us all. And so we get those two changes in tariff arrangements, one immediately and one on the 1st of January. That will, if it follows the pattern in other places, that will actually drive another surge in demand.
I was in Japan earlier in the year not long after the Japanese FTA had come into force and there a number of people in Japan who were looking at the Australian economy again because there was a change in market circumstances. The China FTA is something that has been much anticipated and industry on both sides have been waiting for, but the renewed interest in the Australian economy from Japan which I regraded as quite a mature market, was quite sustained.
I was at an event in Australia a few weeks ago around the development of Northern Australia and I ran into some Japanese officials who I met when I was in Japan in April/May and they had come to Australia because they were looking to invest in Australia and that was because of the change in market. And that’s the opportunity that sits in front of us for this sector now.
I’m perhaps a tad brutal when it comes to my thought process around the sector because it has to be about the things that are driving growth and it’s the economic fundamentals that really are going to make a difference to us. Yes, we’re in good shape now because the dollar’s come to a reasonable level and that’s driving a whole spurt of growth through our sector. But the opportunity now comes to build on the back of the work that Andrew Robb has done for the last I’ll say four years, not necessarily just two because before we came to government Andrew was working around the world saying to people, you should come to invest in Australia. He continued this work when he got the trade portfolio and we have quite a significant pipeline of infrastructure for the tourism industry that’s sitting there – 20,000 or 30,000 beds is what Andrew’s generated.
The task now is to make that materialise and to make sure that the capacity is there, a high quality offering which is what the market is demanding. So what are the drivers that make that happen?
We released a report a few weeks ago that talked about the planning processes and how they worked to the advantage of the tourism industry. And before I released it, knowing that the Tasmanian government was about to release some reforms around planning in Tasmania, I got in touch with my Tasmanian counterpart in the Tasmanian Treasurer who is looking after planning and asked if we were lining up. They’re the sorts of things we need to make sure that we do and so the reforms that he was about to announce aligned with the things that the report was talking about.
Sometimes it can be very hard to get through a planning process and time is money when you’re going through those processes. So how do we facilitate those sorts of things, so how do we continue to increase or sustain investment in tourism infrastructure investment? That’s really important.
We’ll continue to focus our attention on our international marketing activities. I was at Tourism Australia this afternoon and had a chat to the staff that are operating down there and what I asked from Tourism Australia is I just want it to be the best marketing organisation marketing the best tourism destination on the planet. Not too much to ask!
They’re in a very good place. They’re recognised and respected very well by industry, they’ve got some great partnerships, and so the continued encouragement from government to do that, and if there’s any impediments to them being able to undertake that I want to know about it and I will work to remove those impediments. Because we need to be the best of the best and I’m happy to do what I can to remove any impediments to that process.
Obviously something that we’ll talk about at breakfast in the morning is labour and skills issues, that’s really important. We’ve got a skill shortage of about 38,000 to 40,000 at the moment and its projected to go out to 125,000 by 2020. How do we fill that?
We’re looking at some work around that at the moment and when you look at the demand for highly skilled people not just here in Australia but out into the region, and talking to my counterparts in Indonesia three weeks ago they’ve got a significant demand for labour as well. So we’re competing in a global market for that labour and if we want to continue to grow as we’re projecting we need to have the resources to be able to do that. And labour is our most important asset in that space, our people are absolutely vital to the quality tourism experience that we want to provide here in Australia.
International aviation capacity and connectivity are obviously very important. We’re enjoying renewed growth at the moment but that growth isn’t consistent across Australia. It’s pretty strong in the eastern states but my counterparts in South Australia, Western Australia and the Northern Territory are a tad grumpy that they’re not seeing the same sort of growth levels. So how do we manage the settings to ensure that the connectivity and the aviation capacity actually meets through those markets? So that they can enjoy the growth and ensure that really important sector of the Australia economy benefits their local economy as well, it’s really quite important.
Of course then you come to things like visa reform, an issue for this sector but also internationally. In the international education sector as well and it’s really quite interesting to see how a positive announcement in that space has a significant impact. When we were in Indonesia three weeks ago Andrew Robb, Peter Dutton and I made an announcement about a three year visa for the Indonesian market and it was greeted very warmly. When I met up with some buyers or agents in South Australia at Tourism Australia’s Dreamtime event last night in Adelaide they were telling me that their bosses had sent them down to the event to understand the Australian market because they wanted to significantly increase tourism access into Australia.
Because the three year visa was available they saw that as a trigger for them to be able to increase their opportunities to sell product for Australia. So, very well received, very warmly received, and I think and I said at the time that was a turning week for this country and our relationship with Indonesia.
But now being demonstrated by the stance that’s coming from the market in Indonesia, we have about 140,000 to 150,000 visitors coming from Indonesia last year. If we can significantly increase that, that really is a big opportunity for us from of our near neighbours. We send 1 million visitors into Indonesia, mostly to Bali, on an annual basis, but if we can manage to reciprocate again it’s a near neighbour, it’s good for the relationship and so it was very pleasing to hear such strong feedback from the Indonesians that this announcement was well received and was going to be taken up.
When we made the announcement that we would bring the three year visa in and it would be available from the 1st of December, which is now last week, to hear that its actually up and running and working and available was really great news. It’s also a demonstration of how the action applies in a way that the industry works with is of benefit to us. They’re the sorts of things that we’re looking at.
I look forward to breakfast tomorrow and getting into some meatier stuff around labour, it will be exciting.
Very good to be here and thanks for the opportunity to have a chat. Let’s hope for a Merry Christmas, it’s not far away is it, so Merry Christmas everybody.
Minister for Tourism and International Education, Senator Richard Colbeck