Wednesday, 7 February 2007
Matters of Public Interest
Western Australia: Tourism
The Premier of Western Australia, Alan Carpenter, reshuffled his cabinet at Christmas following a number of scandals engulfing his government—a government that has become cocky and arrogant. We have seen over the past 12 months two ministers in the Carpenter government resign—the Minister for Police, John D’Orazio, and the Minister for Small Business, Norm Marlborough. They both resigned in disgrace, having been embroiled in Corruption and Crime Commission hearings, and both were cabinet ministers. Messrs D’Orazio and Marlborough are just the tip of a very ugly iceberg.
For the six years in which we have had a Labor government in Western Australia there has been a succession of underperforming tourism ministers, including the latest Minister for Tourism, Culture and the Arts, the hapless and inept Sheila McHale. In her relatively short time as minister she has demonstrated that she is utterly incapable of delivering any semblance of efficient ministerial administration. She is the most incompetent of the Carpenter ministerial pack and once again she has survived this Christmas reshuffle and ongoing reshuffles, despite having the dubious honour of taking every ministerial portfolio she has ever touched into a twilight zone. She was moved sideways into the tourism portfolio when Alan Carpenter became Premier because she had been a total disaster as the Minister for Community Development. Within this crisis-ridden department, under her five-year stewardship, the people of Western Australia saw 214 deaths of children who were under departmental care. This was a national scandal and she presided over it. Her performance as a minister in this critical portfolio was shameful and a disgrace.
So we now see the WA Premier treating the tourism portfolio as a repository for failed and failing ministers, all of whom he would want to see removed from public view but, at the same time, he keeps party backers and factional bosses on board by keeping them in cabinet. The consequences of treating this very important tourism portfolio with contempt are beginning to be felt on the ground in our once great Western Australian tourism industry. The tourism industry is being decimated and the Premier and his party hack ministers are to blame and should hang their collective heads in shame.
Tourism is the third largest economic contributor in Western Australia, yet it has largely been ignored and ‘put on the backburner’ by the Carpenter government. Without the economic boom associated with the resource industries, fuelled by the ever-increasing demand by the Chinese, Indian, Korean and Japanese economies, the Western Australian economy, already preyed upon to fund an ever-increasing and bloated state public service, would be in serious trouble.
The Western Australian resource industry, on the other hand, is in great shape. However, I must point out that the Carpenter government has a duty in this instance to provide strength and diversity in our state’s economy, not to simply rely totally upon the mining industry, which is subject to volatility and commodity price fluctuations. So disillusioned are our tourism operators and participants in Western Australia that they have formed their own representative group, oblivious to and away from government, to effectively promote the industry in Western Australia. The new group, the Western Australian Tourism Owners Group, WATOG, has emerged as an industry alternative to the Tourism Council. It is independent of the government and has filled the void as the principal lobby group for the tourism industry in Western Australia.
The situation in respect to tourism in Western Australia is dire for tourism operators. The official figures released by the government, in the very best public service ‘Yes, Minister’ speak, will show that tourism numbers were up by nine per cent in the past year. However, what is hidden within this number by a very deceptive and spin-conscious government is that all visitors to Western Australia are included in these figures. The problem for the tourism operators in Western Australia is that a very large slice of these visitors are business visitors who are engaged in the booming resources industry and associated engineering and other industries. For those who are unaware, mining companies around Western Australia have purchased or booked out entire hotels, hostels and motels to accommodate their workers. Can anyone begin to comprehend how bad the figures would be if mining business was not included in official Western Australian tourism figures? Manny Papadoulis, CEO of the Western Australian Tourism Owners Group, said recently:
The problem is business visitors stay a shorter time and they don’t do regular things like boat cruises, bus trips to the regions and that sort of thing.
Compared with other states, in the past year our total market share is down 2.5 per cent, visitor nights have declined 9 per cent and visitor expenditure is down per cent.
Western Australia is scheduled to hold the most important national industry event, the Australian Tourism Exchange in 2008. As it stands, Western Australia is going to be not just the laughing stock of the rest of the country, given those figures, but also the laughing stock of the global tourism industry. Ian Dawson, the Managing Director of Australian Pinnacle Tours, one of Western Australia’s largest tourism operators, said recently that in 27 years in the industry he could not recall ‘worse mismanagement of state marketing’. Misguided promotional campaigns by the Labor government in Western Australia have been an unmitigated disaster. $6.3 million went down the drain on the ‘Real Thing’ tourism campaign—it was a total dud and a fizzog. It has been such a dud that there has been a nine per cent decline in international visitors and a 1.3 per cent drop in the number of domestic visitors into my home state of Western Australia—in all a massive drop of one million fewer bed nights of visitors to Western Australia. This has got to be an absolute unmitigated disaster.
As the tourism operator at the internationally renowned Monkey Mia Resort, one of our world renowned resorts, Dean Massie said:
The way Tourism WA is going about their marketing and their lack of communication with industry and their arrogance is really disconcerting. Tourism WA’s marketing is not stimulating people to come to this state.
The net result for Western Australian tourism is: firstly, domestic tourism is the worst it has been in seven years, inside an absolutely booming economy; secondly, WA was the only state to have a decline in backpacker numbers last year; and, thirdly, WA was the worst performing state in attracting international visitors last year, with Japan down 13 per cent, Singapore down 5.6 per cent and Malaysia down 17.3 per cent—all of which are important top 10 markets for WA.
The Perth Convention Bureau estimates that over the next five years it will forgo 63 national conferences, 102 international conferences, 105,000 delegates and $193 million in direct delegate expenditure because of a lack of government funding. Spike funding of $50 million a year finishes this financial year with no government guarantees over the tourism budget in future years. This year’s state budget clearly indicates that the tourism budget for WA will drop from $50 million this year to $41 million in two years time. It is unbelievable that a state government, bulging with funds—a $2 billion surplus driven by Asia’s thirst for resources—is planning to cut the tourism budget.
The real cause of the poor performance in domestic tourism in WA is Minister McHale’s lack of commitment and total lack of understanding of targeted and effective marketing. I cannot remember the last time I saw media advertising encouraging me to explore the magic of the Kimberley, to uncover the treasures of Karijini or to visit the beautiful white beaches of Cape Le Grand National Park in Esperance. Tourism is a commercial product like plasma TVs and imported motor vehicles. If you do not advertise and stimulate people’s buying behaviour in a competitive market then obviously consumers will not purchase the WA tourism product.
Compounding the problem is the state government’s decision to sacrifice their marketing offices in Melbourne and Brisbane. It is quite unbelievable that in this climate and this economy the state government is terminating the offices in Melbourne and Brisbane and marketing the entire east coast from one office in Sydney. I am not an expert in destination marketing; however, common sense and expert opinion will tell you that if you are confined to one city at the expense of other important capital cities, Brisbane and Melbourne in this instance, then interstate tourism numbers will suffer, and certainly they have.
Although closing offices in the eastern states was misconceived, the worst example of misguided policy to hit WA tourism was Tourism WA’s logic-defying decision to close marketing offices around the world. Not only did they close interstate offices; they decided to extend the policy across the globe. The decision to close trade offices in Japan, Singapore and Malaysia was made against the express wishes of the industry and is a glaring example of how the state government lacks experience and expertise in critical decision making, and of their unwillingness to listen to industry. Closing the marketing offices that sell WA to the world was a disaster and the WA tourism industry lost the professional staff in those countries and their expertise, experience and business relationships forever. Once again it was an unmitigated disaster for the industry and, realising their mistake, the government set about reversing their decision behind closed doors—a government of spin and misdirection.
Japan, obviously a very important office, was quietly reopened within a few months of closure. The question I ask is: why isn’t the Premier desperately concerned about this dire situation? The WA government needs to give tourism the profile and leadership it deserves. It would be a great idea if they followed the Queensland government’s lead, where Premier Beattie has responsibility for the tourism portfolio. That is how important Queensland views this matter. Western Australia needs to take a leaf out of that book.
Arguably, the worst performing sector out of a poor performing industry is the backpacker segment. As I mentioned earlier, Western Australia was the only state or territory in the entire country to suffer a decline—a 9.3 per cent decline—in backpacker numbers last financial year. According to research at Murdoch University, backpackers contribute four times as much as mainstream visitors, so any decrease—let alone a massive decrease—will hurt hostels, tour operators and the broader tourism industry. The neglect of the backpacker segment represents a lost opportunity for the WA economy, which is suffering huge labour constraints. If the Carpenter government gave tourism a higher priority they would recognise the potential of the huge labour pool of 500,000 backpackers who visit Australia each year, many of whom have working holiday visas and are desperately looking for work to pay for further travels. More concerning is that backpackers are considered an indicator for broader market trends. Backpackers are the first to change their travel patterns and then the wider market tends to follow. This is a very, very serious sign for WA tourism.
The tourism minister uses fuel prices and a raft of other excuses to explain why domestic tourism is doing poorly in WA. The truth of the matter is that Western Australia is booming and Western Australians are cashed up. Even when fuel prices were at their highest, retailers were doing a roaring trade in WA, with consumers continuing to spend.
By way of background, the single largest failure by the WA state government in tourism was tabled in the WA parliament in 2003. Then tourism minister Bob Kucera, another hapless relic of the Gallop government, tabled the unrealistic Pathways forward: strategic plan 2003-2008, which had the key objective of growing WA tourism by 10 per cent faster than the national average as measured by visitor expenditure. That was the objective. The reality after four years is blatantly obvious—this strategic plan has been an embarrassment and a failure for the WA government, but they have kept very quiet. They simply pretend that plan was never released. After quietly changing the strategic plan they came up with a mere 21-page replacement, including big pictures. I have seen travel brochures that have more depth than WA Tourism’s strategic plan!
I fail to understand how this state government intends to build a healthy business environment for tourism to flourish in if they have such an inadequate policy framework. This is not rocket science; it is fundamentally obvious. Unfortunately, the tourism industry cannot invest in private market funds or make long-term investment decisions with such uncertainty and high chances of governmental failure. What I find truly disturbing is the arrogance of the WA government. It is a major complaint by all sectors of the tourism industry that Tourism WA and Minister McHale simply do not listen to or even take heed of the advice provided by the industry, the very people they are meant to be marketing and supporting.
The shadow tourism minister, Katie Hodson-Thomas, is doing a remarkable job communicating and talking with industry, and she assisted me with this speech. It is a dire circumstance; many operators are on their knees in Western Australia, desperate to see some government action and energy. It is a shocking indictment on this government that tourism is so disregarded at a time when our economy is absolutely booming. (Time expired)