Federal budget supports growth of visitor economy but slashes Tourism Australia funding

Australia’s tourism industry has been buoyed by the Federal Treasurer Jim Chalmers’ Budget commitment of $48 million to support recovery and rebuilding over the next four years. 

The funding, announced in the 2022/23 Federal budget on Tuesday, will support marketing, training, and upskilling for the accommodation sector, as well as the upgrade of caravan parks around the country and enhancing the Quality Tourism Framework.

However, the budget has slashed funding for Tourism Australia, the agency responsible for marketing Australia to international tourists will see its funding slashed by $36 million next year.

Tourism Australia’s budget will fall from $214 million to $178 million in 2023 - and shrink to $176 million by 2025.

Budget papers noted that the 25.1% cut was “due to the temporary nature of the government’s additional tourism marketing campaigns as international travel resumes”.

The savings were identified as part of a spending audit focused on quality of spending, uncommitted funding and duplicative measures.

Tourism Australia had its budget increased this year from $189 million in 2021, in part to help fund a new campaign fronted by the cartoon kangaroo Ruby in a bid to attract international visitors after COVID-19.

Not mentioning the cut in his official budget statement, Federal Minister for Trade and Tourism, Don Farrell stated “we know the last few years have been incredibly challenging for the approximately 300,000 Australian businesses in the travel and tourism industry.

“The (Federal) Government is committed to growing and rebuilding the sector to return to the economic powerhouse we know it to be.”

Another cut has seen an $8.5 million indigenous tourism fund reduced to $4.3 million in the years ahead and there was no further money for a national tourism icons package established by the previous Federal administration to improve major attractions.

However, $100 million has been set aside for Australia’s participation in World Expo 2025 in the Japanese city of Osaka, which will showcase clean energy and low-emissions technologies.

Caravan and Holiday Park Infrastructure Upgrade Funding
The announcement of targeted infrastructure investment for the nation’s holiday parks has been described by the Caravan Industry Association of Australia as a “big shot in the arm for many park operators looking to build on the quality customer experiences already on offer across the country”.

In the soon to be announced criteria for the Grant Program, caravan parks from around the country will be able to apply for funding to deliver shovel-ready projects. The heart of the program is to assist caravan parks to swiftly upgrade or create new infrastructure and visitor facilities to enhance the visitor experience, including improvements to accessibility and environmental sustainability practices.

Caravan Industry Association of Australia Chief Executive, Stuart Lamont, said this targeted Federal infrastructure support package recognised the growing and critical value of caravanning to Australia’s tourism and visitor economy, noting “caravanning has long been Australian domestic tourism’s largest visitor and economic cohort, an almost $24 billion economic driver in tourism and local manufacturing activity.

“This well-targeted funding will go directly into our world-leading caravan park product across the nation. We also believe it will extract private capital expenditure support up to three times over."

Measures welcomed by ATIC and ATEC
The Australian Tourism Industry Council (ATIC) has welcomed the budget.

ATIC’s Deputy Chair Shaun de Bruyn said that the funding for the Quality Tourism Framework will provide mentoring, support and programs to develop new tourism product and access new markets for existing products, as well as micro-credentialling to upskill staff and business owners.

The Quality Tourism Framework (QTF) is an online program available to all business engaged in the visitor economy which drives business development, and improves and diversifies Australian tourism product, particularly for small to medium businesses.

de Bruyn advised “ATIC congratulates the Labor government in supporting small and medium businesses in the tourism sector via the Quality Tourism Framework. This will help our visitor economy to remain competitive and support a sustainable tourism sector.”

The Australian Tourism Export Council (ATEC) also welcomed what it called “vital funding” flowing to a recovering industry.

ATEC Managing Director Peter Shelley stated “we are pleased to see the new Labor Government has retained its important pre-election commitments to the industry including support for tourism sector recovery, up-skilling workers, helping get tourism businesses back into the marketplace, supporting quality tourism products and delivering infrastructure upgrades.

“Along with funding for packages including workforce, capability and better industry research, the budget provides our main marketing force, Tourism Australia, with a top up of funds to help us in this vital period of transition.

"Funding for the Export Marketing Development Grants has been maintained while many other areas of the budget have been trimmed, recognising the importance this program plays in helping Australian tourism businesses access the international marketplace and we are pleased that Tourism Research Australia will have extra funding to help modernise their data collection for the industry."

Shelley said the industry faces a tough restart with inbound holiday visitation still lagging well behind numbers seen leading up to the 2020 border closures with monthly numbers around 300,000 fewer than 2019.

He added “while indications show our air capacity will start to return as we head into 2023 our industry’s challenge will be to ensure we are able to facilitate the smooth conversion of inquiries into bookings and we will need the strong support of government to help us address the imbalance between Australian holiday makers heading overseas and the slower take up of the inbound market.”

Images: BIG4 Howard Springs Holiday Park (top), Tourism Australia's Pip Harrison, who will have to manage a smaller budget (middle) and ATEC's Peter Shelley (below).