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06 Jun 2011Tourism in the Slow Lane of Three Speed Economy
Australia has a "three speed economy" and tourism is caught in the third speed and faces a confluence of challenging dynamics.
There is belatedly a consensus that Australia is experiencing a “three speed economy”. The Reserve Bank of Australia and the Commonwealth Treasury now agree that the economy has three speeds; the Prime Minister and Treasurer call our present predicament a “patch work economy” and the Business Council of Australia refers to divergent sectoral economic performance as a “multi speed economy”. The First Speed economy comprises the commodities export sectors and is forecast to experience sustained growth; the second speed will include industries that service the first speed such as contract miners, banks, mining consults, construction and transport industries; and the third speed will consist of those industries that will need to work very diligently and carefully to avoid a widening economic disparity because they are not direct participants in the global commodity “super cycle”.
The industry Tourism is trade exposed; Australia’s appreciating exchange rate has made our destinations less attractive. The global tourism industry, like other labour intensive sectors, has chased locations with low cost labour rates and has taken advantage of the labour in developing and in some cases least developed nations. Developing countries are now viewing enclave tourism developments, e.g. Cancun in Mexico, as economic development vehicles as well as a source of foreign earnings. Australia’s tourism developments above the Tropic of Capricorn involving blue water and coral reefs are being replicated in the northern hemisphere between the Equator and the Tropic of Cancer.
Domestically structural economic changes are also impacting. Consumers are altering their expenditure habits, the marginal propensity to consume has declined and the marginal propensity to save increased. This has resulted in Australian’s saving about 11.5% of their personal disposable income where previously this figure was a negative 2.4%. Discretionary expenditure on recreation and travel has contracted with the highest proportion of income in Australia’s history now being allocated to mortgage debt repayment. Australia will experience capacity constraints, in particular skills shortages as the mining sector outbids the rest of the economy for the scarce labour force. Training and immigration programmes are unlikely to avert wage inflation that will have consequences for labour intensive industries such as Tourism.
The Australian Tourism industry has to ensure it can effectively contest both international and national market places for its share of the “tourism dollar”. This is a tough market that is likely to remain highly competitive for the foreseeable future. Tourism operators and executives need to deploy the latest marketing and management techniques and build their organisation’s capacity, to perform in this highly contestable environment. Similarly regional tourism organisations need to raise their level of practical support in these challenging circumstances.
So what can we do to leverage the dynamics and opportunities from this third speed economy?
02 Jun 2011
2011 Australasian Ornithological Conference: Cairns
The next Australasian Ornithological Conference will be held at the Cairns Campus of James Cook University from 28 September–1 October, with the opening reception and registration beginning on 28 September. The theme of the AOC will be ‘Ornithology in the Tropics’. For more information about the conference, including registration, head to the AOC website.
02 Jun 2011
Without a birdsong, a forest just isn’t the same
The United Nations has declared 2011 the International Year of Forests to raise awareness on sustainable management and conservation of all types of forests - the forests that also support an incredible diversity and abundance of birds. In this special year, will you help Birds Australia to support our forest-dwelling birds? Donate here.
14 Mar 2011
Up to $1 million Grants Available for Quality Tourism Projects.
The Federal Government announced on 11 March 2011 a new program to develop tourism projects with grants of up to $1 million to be matched dollar-for-dollar. The program delivers on Labor's election commitment to provide $40 million over four years under the TQUAL Grants program.
Projects will need to support the three key national priorities - Indigenous tourism, economic development and tourism employment.
The program will be open for applications continuously throughout the funding period - meaning applicants aren't constrained by arbitrary timeframes or funding rounds.
The first step is a call for project suggestions from the tourism industry, all levels of government, community groups and individuals, which will be will assessed by the Government to select projects, before putting out a further call for grant applications to deliver the successful projects.
For further details, follow this link. www.ret.gov.au/tourism/tourism_programs/tqual/Pages/default.aspx
03 Mar 2011
New $1.4billion RDA Fund From Today
The Federal government today released details of its new $1.4b. fund available through local Regional Development Australia (RDA) Committees designed to boost regional economic development.
Applications will be accepted from today. Funding allocations will be competitive, merit-based and must have the backing of your local RDA Committee. Key criteria include:
- Delivery of concrete economic and social benefits
- Commitment to innovation and building capacity in local communities
- Linking regional communities across traditional boundaries
- Ability to leverage additional funding across government and private sector
To find out more contact your local RDA Committee or, speak to us about help with your application, for help with a concrete business case or to assist in finding matching fund sources. Contact us and ask for Phil Graham or Rick Elliott.
15 Feb 2011
Sport and Recreation Flood Fightback Plan
The Queensland Government has announced that help is available to assist sport and recreation clubs to re-establish facilities and repair or replace equipment which has been damaged in the floods.
For further details visit the Queensland Government website here.
16 Dec 2010
It’s the Bush or Bust
Cities get the credit, but the bush does the work. The two speed economy is a reality for most people except, it seems, for both sides of politics. Currently, Miners are producing the goods, while cities value add (transport, margins). This would be fine except that cities which once monopolised the GDP contribution are not keeping up with regional Australia. Cities, once the engines of the economy, have lost manufacturing production overseas and are now heavily reliant on the service sector.
The latest jobs figures from Access Economics show mining jobs rose by 16 per cent, while manufacturing jobs fell 2.2 per cent or by 22,000 jobs compared to last year. Ken Henry (Treasury) and Glen Stevens (Reserve Bank) flagged these problems years ago, but what has been done to counter this?
Regional Australia needs to take note of this trend and diversify its economy and look for new development options and solutions to make hay while the sun shines. Do we need to consider a Diversification and Productivity Think Tank run by new thinkers from the bush that will address the needs of small economies? Comments!