Tourism Industry Reforms and Its Impacts on the Growth of Australian Economy

This article discusses the reforms introduced in the Australian tourism industry and their impacts on the country's economic growth. It covers transport, labor, digitalism, and investment reforms. The article also highlights the contribution of the tourism industry to the Australian economy in terms of GDP, exports, and employment.

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 1
TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY
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TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 2
Introduction
Australia is among the richest nations in the region of Asia-Pacific. It is ranked among the top
five richest countries in the region of Asia-Pacific in terms of economic growth with a gross
domestic product of more than 1.3 trillion (Prideaux &Witt, 2010, p.7). Australia is also among
the top five nations with most free economies according to the 2018 index with more than 79
score of economic freedom. Almost all the industries in Australia are open to foreign
investments competition and they have access to readily available highly skilled labor force. This
has greatly contributed towards improving and maintaining economic growth in Australia and as
a result it has remained a centre of attractions for many investors from all over the world.
Tourism industry has been chosen. In general, tourism refers to the activities of the visitors. It
involves the travel of people outside their local environment to other places for a period which is
actually less than one year but more than 24 hours (Leiper, 2012, p.390). Tourism can be internal
(domestic) or international. People travel to places for different purposes. The main purpose of
traveling in tourism is leisure among others which may include business and other activities
under personal level. Tourism in Australia is a very crucial industry and contributes almost more
than 3.2 percent of the gross domestic product. Australian tourism industry is very broad and
consists of various enterprises supporting the tourists’ activities. These enterprises offer various
activities to the tourists which include accommodation, transport, casino businesses and even the
education sector as some tourists may be interested in learning foreign languages. For this reason
tourism, the Australian industry sector remains very important and the government is doing its
best to improve the various tourism activities and other sectors of the economy which are
directly or indirectly involved in tourism to improve its economic growth.

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 3
Reforms in the Tourism Industry of Australia
The Australian tourism industry is a very crucial component of the economy as it contributes
much towards improving the economic growth of Australia. The Australian government has been
undertaking various reforms in the industry to improve its efficiency and consequently its share
towards improving the Australian economy (Savage & O’Connor, 2015, p.609). The government
reforms have been successful as the contribution of the industry towards the gross domestic
product has been improving for the past ten years though at a slow rate. The industry has a bright
future and much is expected from it in future. The following are the reforms which have been
introduced in the Australian tourism industry for the past ten years:
i. Transport Reforms
There has been an increasing demand for tourists in the tourism industry of Australia. Tourists
have been increasing each preceding year. The increased number of tourists needs to be
supported with good transport system so as to comfortably travel within Australia and enjoy. The
government together with the operators in the tourism industry of Australia has been working
hand in hand to improve the transport system and some infrastructures to accommodate the
increasing tourists demand (Berry & Ladkin, 2010, p.433). This reform has been a success as
traffic jam in Australia has been reducing with time. The success of this reform has been ensured
in the following ways:
a. The government has made agreements with the air transport industry to offer affordable
air services to tourists as the demand increases. These services include affordable air
tickets and cheap comfortable services to the tourists. The government has also gone a set
further to subsidize some air operations to enable them to offer affordable services. This

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 4
has attracted more tourists since travelling within Australia has been made cheap and
comfortable.
b. The government has established new travel routes. Many roads through different places
have been constructed. The government has also enabled the establishment of new
airports and airlines such as the Virgin Australia airline. This has contributed much
towards eliminating traffic jams as more routes are available and hence has made
traveling within Australia easy.
c. The government has encouraged the operators within the tourism industry of Australia to
invest much on aviation opportunities. Many operators have been encouraged to adopt
the air transport means for their tourists. This reform has been a success as many
operators within Australia have adopted it. This has contributed much towards
eliminating traffic jams on roads as many tourists prefer using the cheap air transport
means.
d. The government of Australia has come up with the Tourist Refund Scheme which
enables many tourists both the domestic and international ones to claim some refund
from the tax paid on the items purchased in the event of the tourism activities.
ii. Labor reforms
The Australian industry has been facing the shortage of labor for the past ten years (Keating,
2009, p.403). More than 30000 employee vacancies are available. During the year 2015, the
tourism industry required more than 54000 employees out of which about 27000 vacancies
required unskilled labor force. This shortage of labor has led to poor services being offered to
tourists as only a few employees are available to serve and satisfy them fully. The government
has been working hand in hand with the tourism industry operators to enable them to recruit new

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 5
employees and maintain the existing ones to eliminate this shortage gap. The success of this
reform has been ensured in the following ways:
a. The government has encouraged the entire nation to at least acquire 12 years of
education. This will enable people to be equipped with basic skills in their fields and
hence improve efficiency in production in various companies.
b. The government together with the operators in the tourism industry has implemented the
eight pilot hot spots with the help of the Labor and Skills Working Group. This has
enabled high skilled labor force for the air transport sector as the tourism operators’ shift
to it.
c. The government has encouraged proper training of students by their relevant industries to
ensure that they always deliver the best. The tourism industry has been encouraged to
properly train their attaches on how to deliver the best services to tourists.
iii. Digitalism Reforms
Digitalism is important in any industry as it enables proper marketing and easy production and
distribution of products. Actually many Australians are online with statistics estimating more
than 81 percent to be online. Generally more than 55 percent of the whole world is online and by
the year 2020 more than 67 percent is expected to be online (Prideaux, 2009, p.279). With these
estimates, it goes without say that strong digitalism in any sector of the economy is very essential
for it to remain competitive. The tourism industry of Australia has been poor in terms of
adopting digitalism. Currently estimates show that actually a third of the Australian tourism
industry operators have adopted digitalism in terms of payments services and tourist’s online
booking. The government has encouraged the tourism operators to adapt online services to attract

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 6
more tourists and ease their services. The government has reformed the visa application process.
Australia has facing problems of their complex visa application process as compared to their
competitors. The government has introduced online visa application process to eliminate these
problems mainly for the China tourists as many tourists visiting Australia come from China. The
government has also established the National Broadband Network which consists of various
digital programs which support businesses to carry out their activities digitally and minimize
operational costs. The Australian government has also highly supported research activities which
are aimed at inventing new digital ways of improving the efficiency in the tourism industry.
Much of the research activities are currently being done and more digital ways of doing
operations in the tourism industry are anticipated in future.
iv. Investment Reforms
Investment in the tourism industry of Australia has been poor for the last ten years. In fact,
during the year 2009, the tourism industry investment was almost doubled by investment in the
other sectors of the economy such as mining and agriculture. This is due to barriers to investment
in the industry arising from its disproportionate regulation policies (Steane, 2011, p.453). For the
past ten years the investment in the tourism industry has been doing well, evidence that the
government reforms concerning investment are succeeding. The government has encouraged
investment in the tourism industry sector by undertaking the following:
a. The government has supported various investors in the tourism industry according to
their needs geographically (Jenkins, 2010, p.175). Investors in the tourism industry face
different needs according to the geographical locations. Some areas face different
hardships and hence need more support than others. The government has supported them

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 7
proportionately according to their needs. This has encouraged more investors to join the
industry more so in remote areas since they are assured of government support.
b. The government has implemented the use Destination Management Tool in the tourism
industry. This has enabled the investors in the industry to maximally utilize their
resources for maximum productivity. It has also enabled the government to track the
utilization of its support resources in the industry to minimize cases of corruption and
embezzlement of its funds (Leiper, Neil, 2014, p.455).
c. The Australian government has minimized the disproportionate regulatory policies in the
tourism industry (McKercher, 2013, p.131). The compliance costs required for the new
investors wishing to join the tourism industry have been minimized. This has seen more
investors enter the tourism industry more so the accommodation sector as their starting
capital has been favorably reduced.
d. The government together with the operators in the tourism industry has identified various
available investment opportunities. They have encouraged new investors to utilize these
opportunities by supporting them. Many investors have joined the industry and have
contributed towards the Australian economic growth.
Impacts of the Tourism Industry on Australian Economic Growth
Tourism is very important in Australian and it contributes much towards its economic growth.
On average, the tourism industry of Australia has been contributing more than 3 percent towards
the gross domestic product. The contribution of various sectors towards economic growth is
measured by their overall productivity (Ross, G.F., 2012, p.13). The tourism industry is unique
as its overall contribution towards economic growth is measured by consumption. The overall

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 8
consumption in the tourism industry of Australia is measured by the consumption o the domestic
and international tourists. Tourism industry of Australia is broad and consists of various
enterprises which directly or indirectly render their service to tourists. These include the
accommodation, leisure and transport services among others. They contribute much towards
improving the Australian economy which is measured in terms of the gross domestic product.
According to the Australian Bureau of Statistics, the Australian tourism industry has been
contributing more than 3 percent of the total gross domestic product of Australia for the last nine
years. The Australian tourism industry contributed more than $29 million during the year 2009.
This was about 2.6 percent of the Australian gross domestic product (Dredge & Jenkins, 2013,
p.415). The industry has been improving with time and during the year 2014 the contribution of
the industry to the gross domestic product was about 3.1 percent out of which a third was as a
result of international tourism. The demand for the international tourism is on the rise due to
various reforms by the government in the industry which has improved its efficiency in its terms
of quality services and affordable costs of traveling among others.
The tourism industry of Australia has contributed much towards the overall exports in the
country. The demand for international trade has highly increased and it is anticipated to increase
more in future due to the various reforms introduced in the industry which have highly
contributed towards improving its efficiency. The tourism industry contributes more than 61
percent of the total Australian exports due to the international trade which has been increasing
with time. This has enabled Australia to have terms of trade which are more favorable than those
of the neighboring countries such as China. A country’s terms of trade are favorable if its overall
export activities exceed its import activities. Australia has been exporting more than it imports. A

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY 9
large portion of the exports is contributed by the tourism sector and it is expected to do much
better in future.
The tourism industry has contributed towards minimizing unemployment rate in Australia. The
industry had employed more than half a million workers as the 2009 Australian Bureau of
Statistics report. More vacancies are available and by the year 2015, the industry required more
than 52000 employees. The industry currently accounts for more than 7 percent total Australian
employees. In a nutshell, the Australian tourism industry has positively impacted the economic
growth and with the various reforms introduced in the industry much is expected in future.
Conclusion
Australia is among the wealthiest nations in the Asia-Pacific region having been ranked among
the top five positions. It is also ranked among the top five nations with the freest economies
according to the 2018 index. Australia has opened foreign competition to almost all its industries
and has readily available highly skilled labor. This has enabled Australia to achieve and maintain
positive economic growth remaining an attraction for many investors.
The tourism industry of Australia is very important as it contributes much towards its economic
growth (Tovar & Lockwood, 2012, p.279). Australia has been contributing more than 3 percent
of the total gross domestic product. A number of reforms have been put in place to improve the
efficiency in the industry. They include labor, digitalism, investment and transport reforms.
The reforms introduced have seen the contribution of the industry towards the overall economic
growth improve with time for the past ten years. The industry has enabled Australia to achieve
favorable terms of trade by increasing its exports as the demand for international trade continues

TOURISM INDUSTRY REFORMS AND ITS IMPACTS ON THE GROWTH OF AUSTRALIAN ECONOMY
10
to rise. The industry has also employed many workers and still vacancies are available. It
accounts for more than 7 percent of the total Australian employment.
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