Tourism done badly can be a curse that’s hard to shake

Over-reliance on a fickle industry can spell disaster for jobs and economy, says Greg Barns

RECORD numbers of flights into and out of Tasmania. New hotels being built. Government handouts for music festivals and small motel owners, opening up national parks and wilderness areas to tourism operators.

And now, on the eve of the March 3 election, the Treasurer and Planning Minister Peter Gutwein gives a green light to those hoping to build a cable car on Mt Wellington.

Tourism stories dominate the business news of the state and the Hodgman government is happy to risk taxpayer funds in the quest to grow the industry. But is the emphasis by government on growing tourism’s share of this island economy a blessing or a curse? There is certainly evidence that an overemphasis on tourism growth in a small economy can amount to a poverty trap and increases the risk of such an economy being subject to forces outside its control. What is more, a lack of infrastructure to cope with tourism inflows can degrade a community.

In other words, while there is a short term fixation by politicians, their friends in business and some commentators about growth of tourism in recent years, alarm bells should be ringing.

Since 2014 the number of visitors to Tasmania has increased from just over one million to 1.283 million at the end of September last year.

Tourism Tasmania, a government agency, says tourism “directly and indirectly contributes around $2.79 billion or 10.7 per cent to Gross State Product (GSP)” and the industry “directly and indirectly supports around 37 400 jobs in Tasmania or about 15.6 per cent of total Tasmanian employment — higher than the national average and the highest in the country.”

Tourism is becoming a major sector in the Tasmanian economy. But this is not desirable. Take employment. Tourism jobs are often parttime positions.

Recent data published by Tasms, a consultancy run by former Labor MP Dr Julian Amos, shows that since March 2014 part-time employment in Tasmania has increased markedly and full-time employment marginally.

There is a direct correlation between that increase in parttime employment and the growth in tourism investment and activity.

Not only are jobs in tourism often part-time but there is a limit on income earned by those working in the industry.

Front-of-house hotel staff, cleaners, waiters, chefs, tour guides and the like do not earn high wages and the capacity to increase their earnings is limited by virtue of their occupation.

As policy analyst Sam Gardner has observed, “Over a lifetime there is nearly no increase in productivity and salary. Service jobs require real skill — acquired by training or practice — but the limits on productivity are also real: you can only make a bed so fast.”

In Far North Queensland there is a move afoot to diversify because of the recognition the tourism industry has meant low incomes. The author of a report on diversifying Cairns economy, Ian Manning, told

the Cairns Post on June 19 last year that while the “great thing about tourism is that it generates jobs ... by and large they are not high-paying jobs.”

He urged that region to grow “specialities in tropical agriculture, design and creative industries because “it gets better incomes.”

The question of infrastructure and the damage to local communities from rapid expansion of tourism is already evident in Tasmania.

Dr Amos observes the major issue which has emerged in the rush to develop the tourism sector in the past four years is that “the development of tourism hotspots such as the Three Capes Walk and Freycinet has been done in a piecemeal fashion, in that the non-sexy stuff, like basic infrastructure, has been found wanting.

A lazy or is it an incompetent government has not seen that both the left hand and the right hand are required to perform such policy tasks,” Dr Amos says.

He notes that “roads, such as the Dover Road, the road to Hastings Caves, and roads on the Tasman Peninsula cannot accommodate the increased traffic, and are failing. Basic tourist amenities like toilets on Bruny Island are nonexistent.”

It is the local community that is adversely impacted by this state of affairs.

Perhaps most concerning of all is that the Tasmanian government is risking millions of taxpayer dollars in subsidising an industry which is reliant on a strong domestic economy and a low Australian dollar. The Hodgman government has been lucky. The lack of strength of the $A has meant Tasmania has been affordable to international visitors. In terms of domestic tourism a downturn in the Australian economy will mean less expenditure on holidays to places like Tasmania.

Tourism has its place in a diversified Tasmanian economy but the front and centre prominence and influence it has gained in the past four years is dangerous, and will lead to it being a curse not a blessing even in the short term.

Lawyer Greg Barns was an adviser to NSW Liberal premier Nick Greiner and the Howard government. Disendorsed as the Liberal candidate for Denison in 2002, he joined the Democrats. In 2013, he was WikiLeaks Party adviser.