The National Commission of Audit's recommendation that the government halve funding to Tourism Australia has been met with dismay from the tourism industry.
First announced by treasurer Joe Hockey on October 22, the commission aims to save tens of billions of dollars a year in order to achieve a surplus of 1% by 2023-24.
The final report was released on Thursday with 86 recommendations that would significantly overhaul the Australian public service.
Proposed measures that will directly affect the tourism industry including a massive funding cut for Tourism Australia along with a considerable reduction of the AusTrade program and the end of tourism industry grants.
The substantial negative impact of such a move on business, local jobs and investment prospects for Australia was swiftly underlined by the Tourism and Transport Forum (TTF), with chief executive Ken Morrison branding it a “dumb idea”.
He highlighted Tourism Australia’s valuable contribution to the economy, worth $42.3 billion in direct GDP each year.
“While there are a number of constructive suggestions in this report, halving Tourism Australia funding is not one of them,” he said.
“Only the government can market Australia as a destination to the world.
“Tourism Australia is recognised around the world as one the most effective national tourism marketing bodies and must remain a statutory body governed by experts.”
Years of investment have placed the industry on a growth trajectory, Morrison continued. The industry now supports 900,000 jobs and 280,000 businesses, with international visitors spending $80 million across Australia every day.
“The Australian government has identified tourism as one of Australia’s key economic strengths,” he said. “This recommendation flies in the face of this growth strategy.”
The “anti-growth measure” would only benefit Australia’s competitor countries, he added.
Tourism Accommodation Australia (TAA) also called on the government to reject the recommendation.
“The tourism and hospitality sector has been consistently identified as one of Australia’s principal growth industries for the future, with the capability of employing thousands of new workers, generating significant foreign income, and producing a strong flow of tax revenue for the government – it would be very short-sighted if the Commission of Audit recommendations were to be adopted,” managing director Rodger Powell said.
With destination marketing an increasingly competitive area in recent years and major tourism infrastructure projects underway, it is essential that Australia maintains its market share, he continued.
Powell urged the government to instead increase Tourism Australia funding to capitalise on recent free trade agreements.
"If jobs and revenue are the key priorities of the Government, to cut back the tourism and hospitality sector would be a counter-productive move,” he said.
While Treasurer Joe Hockey has emphasised that the report is "not the budget", he has not yet ruled out adopting any of the proposals.
The 2014-15 budget will be handed down on May 13.
