Keynote Address to the Tourism and Transport Forum Leadership Summit: Priorities for Tourism, Aviation and Transport
19 March 2014
Parliament House, Canberra
It is a pleasure to again meet with so many distinguished members of the transport and tourism community.
The TTF has delivered strong, intelligent and respected industry leadership for the past quarter of a century.
The Coalition Government is open for business and that includes being open to good ideas—and I particularly welcome the TTF's valuable insights into infrastructure development.
I have noted your report today about good tourism statistics both international and domestic, especially the December quarter and that is certainly encouraging for the industry.
The tourism industry has no illusions about how competitive the global tourism market is—and neither has the Coalition Government.
Tourism is Australia's largest export service industry—producing just under nine per cent of the total value of our exports in 2013.
We nonetheless have a deficit in our tourism ‘balance of trade’.
But the better news is that in 2013 this deficit fell for the first time in years to $5.2 billion—reflecting a $1.3 billion increase in international visitor spending.
This good performance is an important lever for tourism's future growth.
The industry's ability to achieve this growth depends on several things.
Foremost among them is an industry which is hard-headed and creative enough to make the most of its circumstances—as Australia's tourism industry does.
But the long-term success of any industry also depends on governments which foster an economic environment in which industries can flourish.
The Coalition Government recognises that this involves our efforts across the board.
And we also think it involves knowing when to get out of the way—by removing unnecessary regulatory burdens, taxes and charges.
So, welcome to Parliament on deregulation day, when we are building a bonfire of regulation.
Since last September the Government has advanced tourism issues on several fronts—including within my own portfolio.
It is no secret that we want to be known as an infrastructure government and, I might add, especially as a transport infrastructure government.
We are determined to encourage the expansion of private sector investment and engagement in transport infrastructure.
This is an important part of our efforts to reform how Australia develops critical infrastructure—but the Government's own investments will remain significant.
We have committed $35.5 billion in transport infrastructure investments over six years under our Infrastructure Investment Programme.
In a time of budget constraint this highlights how seriously we take infrastructure investment.
We are getting on with the job of building the roads—and the other transport infrastructure—that Australia needs.
Our investments and reforms to the supply-side of infrastructure address major challenges to Australia's future prosperity.
We are pursuing both efforts with a close eye to how the competitive pressures on tourism and most other industries are likely to intensify.
The Government is well aware that such pressures impact on Australia's cruise industry, especially in northern Australia, under the existing arrangements for coastal shipping access.
The government has announced an intention to review the regulatory settings that impact on the competitiveness of our shipping industry. This isn't just limited to freight—but should include a separate analysis of the appropriate regulatory settings for the cruise industry as well.
Shortly an options paper will be released and once the formal process commences, the Government will be keen to hear from the tourism industry about these issues.
Planning for Future Transport and Infrastructure Needs
The better we plan our transport and infrastructure investments, the more certain we can be of good investment outcomes—especially when we rely on solid evidence.
In this light my Department has developed a significant planning tool that I am pleased to release today.
The Trends: Infrastructure and Transport to 2030 report draws together analysis and forecasts of the most significant future impacts on infrastructure and transport.
Trends focuses on the pressures on our transport and other critical infrastructure sectors.
By 2030, Australia's population is projected to grow to 30 million—and economic growth will also increase demands on our national infrastructure from both passenger and freight services.
To cite just two projections from Trends, by 2030 truck traffic is predicted to increase by 50 per cent; and both domestic and international passenger movements through our capital city airports are expected to almost double.
Figures like these underline how strong responses are needed from governments—and industry—to ensure that we capitalise on opportunities and strengthen Australia's international competitiveness.
I recommend Trends to you—it is an important reference for everyone engaged in infrastructure and transport.
Amendments to the Qantas Sale Act
The Trends document focuses on longer-term pressures, but we have of course seen a more immediate focus on Australian aviation in recent weeks.
The Government understands that aviation is crucial to Australia's national interests—and that is why we are determined to remove the particular pressures created by the outdated restrictions on Qantas under the Qantas Sale Act.
Earlier this month we introduced legislation into Parliament to remove the foreign ownership restrictions and conditions on Qantas’ business operations under the Act.
We have been very clear—like all Australians, we want a strong and competitive Qantas.
But the restrictions under the Qantas Sale Act create an uneven playing field.
It is important to remember that under our legislation Qantas will become subject to the Air Navigation Act 1920 which limits foreign ownership of Australian international airlines to 49 per cent—and will preserve national ownership without the additional burden the Qantas Sale Act places on Qantas alone.
Qantas will therefore continue to access the capacity and traffic rights negotiate by the Government for designated Australian carriers.
As the Prime Minister has said, Qantas’ international operations “would remain in every sense an Australian airline”.
It is also important to remember that foreign investment in Qantas will remain subject to the national interest tests overseen by the Foreign Investment Review Board.
Our actions are a sensible response to changing circumstances—they in fact reflect our commitment to a strong Australian-based aviation industry.
The Aviation Sector and the Tourism Industry
It is also important to consider how broader trends will shape the futures of aviation and tourism.
These trends are promising.
Over 31 million international passengers moved to and from Australia in 2013—5.8 per cent more than in 2012.
And very encouragingly, this growth has been sustained at around this level for the past five years.
It is no surprise that tourists from Asia-Pacific nations generated most of this growth—their numbers rose by 5.3 per cent in 2013, a trend likely to continue.
China clearly led this field—in 2013, total passengers flying from China to Australia pushed past 700,000 for the first time.
China is also Australia's highest yielding inbound tourist market, contributing around $3.3 billion to our economy annually.
But Australian tourism is also fuelled by the dynamic Singapore, Malaysia and India markets—arrivals from all three countries grew by over 10 per cent in 2013.
Air India now of course operates its direct service to Australia from India—and this is a very good pointer to the futures of aviation and tourism, which the TTF rightly focused on earlier this afternoon.
Domestic demand for aviation and tourism has also grown substantially—in 2013, the total passengers carried within Australia grew by 1.8 per cent to 57.38 million.
And in 2012–13 domestic tourism accounted for the lion's share of the growth in tourism GDP—some $957 million of its $1.5 billion increase.
These figures underline how closely twinned the tourism and aviation industries are—and the absolute importance of ensuring that Australia's aviation environment can sustain the future growth of both industries.
This growth depends on good commercial decisions, and on the quality and capacity of Australia's airports, and the other highly visible infrastructure we associate with aviation.
It also depends on less visible but equally vital successes such as negotiating international aviation agreements that facilitate growth in markets.
The Government remains committed to an Australian-based aviation industry which is safe, competitive and productive in both domestic and international markets.
I will now turn to some of our efforts to achieve this goal.
The Government is committed to further liberalising global aviation markets—while ensuring that Australia's national interests are protected.
We are working to expand the access of Australian airlines into foreign markets—especially through bilateral air services agreement negotiations.
This will help expand developing markets and ensure our aviation capacity meets future demand.
This work is underway—my Department signed a new Memorandum of Understanding with the New Caledonian authorities last November to improve access for carriers of both sides.
And this year's forward negotiating programme has three key objectives.
First, the programme focuses on key Asian markets including China, Hong Kong and Malaysia—an obvious and significant priority, given their recent growth and future potential.
Secondly, we aim to open several smaller but promising markets to Australian carriers, particularly in Africa and the Middle East.
This will enable Australian airlines to code share with their partner airlines to markets they could not otherwise serve.
Thirdly, the programme focuses on opening and expanding links to South America's rapidly maturing tourism and trade markets.
We will of course continue to consult with stakeholders, including the TTF, about future negotiations.
A key driver of the Government's aviation priorities is the economic importance of airports—both in their own right and in their support for the broader economy.
In 2011, Australia's airports contributed around $17.3 billion to the economy—and as I mentioned earlier increases in international travel and domestic demands are projected to almost double passenger traffic at airports by 2030.
All major airports around Australia face the challenge of maintaining timely investment in infrastructure to meet this demand.
In that respect, today I can confirm that after carefully considering the views of the community, the tourism industry and the airport, I have accepted the recommendation of the Brisbane Airport Curfew Review Steering Committee not to impose a curfew at Brisbane Airport.
This Government is not predisposed towards implementing additional regulatory burdens on industry. A curfew at Brisbane Airport would have an ongoing impact on the Brisbane economy, not to mention the tourism industry. At the same time it would not mitigate the aircraft noise impacts in peak periods on Brisbane residents.
As we know, Brisbane Airport is undergoing significant demand pressures. I have encouraged the Airport, together with airlines, Airservices Australia and other stakeholders to work together to improve capacity at Brisbane in the short to medium term.
It will be some time before the parallel runway is operational so it is important that what can be done now is done to improve capacity.
Sydney Aviation Capacity
Aviation capacity is also a challenge at Sydney Airport.
The Australian Government is committed to selecting a site for Sydney's second airport in our first term.
We understand the need to provide certainty to the public—and to allow the aviation, transport and tourism industries to plan for the future.
We are therefore inclined to make this decision sooner rather than later—but I must stress that making this decision involves working through several important national interest issues.
Among these issues are of course the economic and social benefits the airport will bring.
They include the specific need for a Western Sydney Airport—a need now widely recognised within the community and across all levels of government.
They also include developing effective arrangements between governments.
I fully endorse the NSW Premier's view that the Australian and NSW governments must be partners in delivering the best outcomes for the community—including in building the transport links needed for the airport's development.
The site selection decision will ensure that Sydney—Australia's main gateway and foremost international tourist destination—can meet future demand, especially from the Asia-Pacific.
We also understand that if we fail to act in time, there will be significant costs to the national and NSW economies.
For instance, the 2012 Joint Study on aviation capacity in the Sydney region found that 54 million passenger journeys would go unmet by 2060—a supply failure with major commercial, economic and social costs.
While some of this demand might go to other Australian cities, surveys have shown that some business travelers and tourists may not come to Australia at all.
I want to emphasise that—although the selection of the Second Airport site is a critical way-point—it is not the only step in addressing Sydney's aviation needs.
The Coalition Government is investing in the WestConnex Motorway project and the Moorebank Intermodal Terminal—both of which will relieve congestion around the Sydney Airport/Port Botany precinct.
A second Sydney Airport will complement—not replace—Kingsford-Smith Airport—which will continue to be a critical part of Australia's transport infrastructure.
To ensure that the owners of Sydney Airport can invest in the future I recently approved Sydney Airport's 2014 Master Plan.
Among other things the Plan sets out an ambitious reconfiguration of Kingsford-Smith's terminals to handle growing passenger numbers.
However, this plan will not of itself unlock sufficient additional capacity for Sydney's needs—and therefore does not remove the need for a Second Airport.
To sum up, our site selection for the Second Sydney Airport will be focused on providing better access to aviation—and maximising the economic benefits aviation infrastructure generates for Sydney, NSW and the nation.
Given the importance of these benefits a decision on the site is an important priority for the Government.
Securing the transport network that the tourism industry and every other part of the Australian economy needs depends on getting several things right.
Foremost among these are identifying the infrastructure the economy needs for the long haul—and creating an infrastructure framework that is much less complicated, and much more rational.
I am pleased to be part of a Government that has set several balls rolling in these areas.
The transport and tourism industries have achieved a great deal and have helped shape modern Australia—and they have great potential to achieve much more.
For our part the Government is committed to developing the infrastructure framework needed to help realise this potential.
I would like to thank you very much for your time today, and I am happy to take your questions.