Apple isle panacea a fantasy
| John Roskam
The Australian Financial Review 7th September, 2007
According to tennis legend John Newcombe, "there can be no doubt that tourism is the future for Tasmania". He says that's why he joined the protest against building a pulp mill at Bell Bay. This opinion from the former world No. 1 is not uncommon, and is thebasis of the celebrity campaign against federal Environment Minister Malcolm Turnbull.
It's interesting to ponder why celebrities are so enamoured with tourism as the salvation of the Apple Isle. It may be because tourism is one of the few industries of which they have any knowledge. The hectic travel schedules of Sydney's internationally renowned actors and writers don't allow time for visits to pulp mills, refineries or smelters.
It's not only celebrities who are in thrall to tourism. The Greens and the Labor Left regard tourism as the economic panacea for not only Tasmania but for the entire country. The regional development plans of dozens of regional towns and districts around Australia are already based on tourism. Tourism is regarded as friendly, personal and environmentally sustainable.
The only problem with making tourism the answer to everything is that such a strategy is economic fantasy. Obviously tourism is important, but only those unacquainted with economic reality would rely on tourism as the source of the nation's prosperity.
While tourism made up nearly 4 per cent of Australia's gross domestic product in 2005-06, the economic contribution made by tourism has been declining. Last year, tourism's share of GDP was the lowest on record. If the dollar continues to remain strong, it's likely that it will fall even further. Tourism accounts for about 11 per cent of the country's exports of goods and services - actually a higher share than agricultural produce or iron ore. But again, this share is falling.
Although more than 450,000 people work in the tourism industry, the jobs it provides are mainly low skilled and low paid. As the Queensland Tourism Industry Council acknowledges, "fulltime earnings for the accommodation, cafe and restaurant industry are the lowest of all industries in Australia".
One-quarter of tourism-related employment is in the retail trade, a sector also characterised by its low pay and part-time and casual workforce. One in 10 Tasmanians are employed in tourism, which is double the national rate. If tourism is indeed the future for Tasmania, an unprecedented number of new tourism jobs will need to be created.
The notion that Australia should develop more value-added industries is a mantra of every politician from every political party. But there's not much that's Clever Country or Knowledge Nation about tourism. In 2005-06, its contribution of 3.5 per cent to total industry gross value added was the lowest share ever recorded.
The value added from tourism compares poorly against other industries. Compared with the value added provided by other sectors of the economy, tourism ranks 12th out of the 17 major industries.
One of the supposed attractions of tourism is that it is less damaging to the environment than other industries.
The truth of this is debatable.
The largest product consumed by tourists is long-distance passenger transportation, and it is air and water transport that account for the largest share of the value added by tourism.
Anyone concerned about carbon footprints who wants to have a viable tourism industry needs to answer some basic questions. Such as: "How will tourists get to Australia?" and "Once they get here, how will they move around?"
The idea that Tasmania can't have both a tourism industry and pulp mill is a fallacy. Sweden manages to accommodate both - and has more than 40 pulp mills.
Now that the building of the pulp mill has become embroiled in the politics of the federal election, a decision on its future won't be made for months. On current indications there's a good chance that Peter Garrett will be the minister deciding whether the project can go ahead. This could be one of the first tests of a Rudd government's commitment to economic progress.
Newcombe is right about one thing. The matter of a pulp mill in Tasmania has a broader significance. As he says, the issue is about "the sort of country we want to leave behind for our children and grandchildren".
A key challenge for the future will be to ensure that our children and grandchildren can secure high-skilled and well-paid employment. Industrial developments such as the proposed pulp mill provide such jobs. Tourism doesn't.