The Tourism Productivity in Australia Report, released by the Australian Government today, shows significant investment is needed to boost productivity in the tourism industry. Gross domestic product (GDP) statistics released last week showed tourism outperformed the economy as a whole in the past year, but today’s report reveals the productivity of the industry has lagged behind the economy-wide average over the long-term. The report prepared by Tourism Research Australia uses the benchmark measure, multi factor productivity, to show tourism has grown by 0.2 per cent per year against the Australian economy’s 0.4 per cent per year for the 12 years to 2008-09.

In response, the Minister Assisting on Tourism, Senator Nick Sherry, said the Australian Government has put the spotlight on lifting productivity and capital investment in the industry through its microeconomic reform agenda and the National Long-Term Tourism Strategy. The report’s findings send a strong message the industry needs to invest in capital and a skilled labour force to deliver all-important efficiencies.  Productivity gains and capital investment will be essential to renew Australia’s many attractions, hotels and convention centres – and we look to the private sector on this count. The Australian Government has been instrumental in setting a clear agenda for higher productivity through the National Long-Term Tourism Strategy work program.

As part of the strategy, State and Territory tourism ministers are working with the Commonwealth to boost labour market participation, encourage investment and ensure the industry has access to transport infrastructure to raise the sector’s productive capacity. The Australian Government’s broader reform push is intended to reduce the administrative and tax burden on Australian business and free up funds for capital investment.

The government has provided direct assistance to the small business operators, who make up 93 per cent of the tourism industry, through immediate asset write-off of up to $5,000, as well as lowering the company tax rate, from 30 to 29 per cent. The resulting released funds can help free up capital investment and help Australian tourism’s long-term competitive position.

Tourism is showing encouraging signs of recovery after the pain of the global financial crisis and it remains Australia’s leading services export earner.  However, this report shows there’s a lot of catching up to do in terms of investment and productivity gains to ensure the industry prospers into the future against intense and growing international competition.

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