House debates

Monday, 18 June 2007

Committees

Economics, Finance and Public Administration Committee; Report

4:44 pm

Photo of Martin FergusonMartin Ferguson (Batman, Australian Labor Party, Shadow Minister for Transport, Roads and Tourism) Share this | Hansard source

I welcome the opportunity to address the report of the House of Representatives Standing Committee on Economics, Finance and Public Administration entitled Servicing our future: inquiry into the current and future directions of Australia’s services export sector, and, in doing so, indicate to the member for Barker that I pay close attention to the work of this committee. I say that because, as the shadow minister for tourism, I feel that the recommendations of this committee’s report are exceptionally important.

I also say at the outset that, like the member for Barker, I do not believe the work of the committee structure gets enough attention and recognition. I think we all appreciate that committee work is one of the most rewarding parts of being a politician, because it enables us in a bipartisan way to make some real recommendations about real policy issues of national importance—recommendations we can be proud of. As shadow minister for transport and roads and tourism, I am paying close attention to the recommendations of this report because of the importance of tourism to the export sector.

I hope that the member for Moncrieff, who has been an active participant in this committee, brings the report to the attention of the Minister for Small Business and Tourism, because I know the member for Moncrieff is highly critical of the minister’s performance. I, like him, appreciate that she needs all the assistance she can get with her portfolio work. Having said that, let me say that the report focuses heavily on tourism, a key service sector in Australia. Tourism related services account for almost $28 billion in the balance of payments and are made up of more than 60 per cent of Australia’s total services exports. The importance of the tourism industry as a whole is often forgotten, and this report reminds us that it contributes about four per cent of Australia’s GDP. I think, therefore, that it would also have been appropriate for the committee to have recommended that, in terms of the performance of the Howard government, tourism be a key cabinet portfolio rather than being in the outer cabinet, the outer ministry, as is currently the situation. The report rightly identifies a number of challenges faced by the industry and highlights the fact that the recent slowing in Australia’s services exports has been partly attributable to the stronger Australian dollar leading to slower growth in tourism related services. This is something that cannot go on without it being properly addressed.

As the report notes, there has been a decline in tourist arrivals from Japan over the last decade and, while Japan’s ageing population and modest economic growth over the last couple of years partly explains it, it should be a matter of concern to Australia that Japanese tourism to other destinations such as China, Singapore and South Korea grew over the same period. So, in that respect, I welcome the committee’s report on the findings of the action plan for Japanese tourism with respect to how we go forward. It is something that has to be pursued vigorously by the government. I consider that there is no doubt that the ‘So where the bloody hell are you?’ campaign has been a complete and utter failure in Japan, and it is time some sensible analysis and federal leadership were exercised to reverse this negative trend. The minister’s response is to want to audition for a Japanese soap opera! We need more than that.

Another challenge for Australia as a tourism destination is the growth of low-cost carriers flying within Europe and Asia, which has increased the relative price of a holiday in Australia for European and Asian tourists. At the same time there has been little development of low-cost, long-haul flights to destinations like Australia, and high world oil prices have resulted in many airlines introducing fuel surcharges of around $74 to $100 on long-haul flights, further increasing the relative cost of travel to Australia for a tourist.

Again, I support the recommendation of the committee to commission an independent inquiry on the future of the inbound tourism industry and the challenges it faces. When it comes to Australia’s challenges on inbound tourism, we need more action. That is why I also welcome the committee’s support for the development of an action plan to consider the impacts of climate change on the tourism industry and its recommendation that the action plan also consider the potential impact of carbon emission reduction policies on inbound tourism. The committee notes, appropriately, that in recent times there have been calls from within Europe for its citizens—another trade embargo—to avoid long-haul flights and give preference to consumer products that have not been freighted over long distances; another crack by the European union at Australia. The committee appropriately expressed a view that some of these calls are based on Eurocentric protectionist motives more than a desire to address climate change, and noted that government industries should attempt to ensure that the increasing public interest in climate change is not exploited by groups with protectionist objectives in mind. I could not agree more.

Let us deal with a few facts. Let us have a scientific debate about climate change and its potential impact on the tourism industry. Globally, aviation contributes just two per cent of greenhouse gas emissions but eight per cent of world GDP—that is, 28 million jobs and $US3 trillion. Recently, the less than august Australia Institute—an organisation for which I have no respect because it seems to pride itself on belting low-income people in Australia—proposed a carbon tax, an elitist tax, on domestic flights and called for an end to the promotion of the aviation industry. Never mind that, according to the Australian Greenhouse Office’s National Greenhouse Gas Inventory, civil aviation contributes just 0.9 per cent of Australia’s emissions. If we got rid of the entire aviation industry, as the Australia Institute would have it, we would still be left with 99 per cent of Australia’s emissions.

Australia’s geographic remoteness and vastly dispersed population means we rely on air travel more than the rest of the world. In Europe, distances between destinations are much shorter, and rail and road networks provide alternative modes of efficient transport. But it should also be noted that every rail journey in Europe is subsidised by between $US3 and $US9, while every air journey contributes between $US6 and $US11 to government revenues.

Air transport is, interestingly, responsible for 99 per cent of Australia’s international passenger movements each year, with about 18.1 million air passengers entering and leaving Australia—and the Australia Institute would have us kill the Australian aviation industry both domestically and internationally. They ought to have a long, hard look at themselves. Within Australia, the arrival of low-cost airlines Jetstar, Virgin Blue and, now, Tiger have connected Australians to each other and improved access to markets for Australian businesses like never before. It has also meant that ordinary people, low-income earners, can avail themselves of air travel—at long last.

But let us keep it this way. It is the responsibility of both sides of parliament to stand up to the idiots in the Australia Institute. The Australia Institute report, so far as I am concerned, is brazen in its simplicity and puts the organisation in the dubious company of the Green warriors who hope that climate change will finally bring down capitalism. While this might enable grandstanding in the media, it fails to progress the climate change debate in any meaningful way, and it damages the prospect of finding sensible scientific solutions to a complex debate that is of exceptional economic importance to the future of Australia, especially rural, remote and regional Australia.

Each year, for decades now, the airline industry has made efficiency improvements of between one and two per cent. It may not seem like much to the Australia Institute, but eliminating a single minute from every flight around the world would save 4.8 million tonnes of greenhouse emissions. That is a big incentive for the airlines to actually make progress, because emissions cost money—it is about good business. With fuel prices at record highs, it is good business to reduce emissions. It is no coincidence that the financially successful airlines are also often the greenest, as they invest heavily in new aircraft and technologies that burn fuel more efficiently. New aircraft are 70 per cent more fuel efficient than 40 years ago and 20 per cent more fuel efficient than 10 years ago. Technologies in airspace management, such as advanced navigation and scheduling systems, are advancing and achieving dramatic fuel-efficiency improvements.

I commend this report to the House, because it is about making appropriate recommendations for the future of the services sector in Australia. It also brings to a head such complex issues as climate change, which are key to the future of a number of service sector industries in Australia and key to economic growth and employment in Australia. I commend the committee for its very valuable work. (Time expired)

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