Page 2471 - Week 08 - Thursday, 30 August 2007
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MR BARR: No-one has done that piece of work, but it is certainly not $109 million. If you are seriously suggesting that $109 million out of the $658 million that the ACT government raised in the year that the report was looking at came from the tourism industry, that is a heroic assumption. We know that the vast majority of that would have been GST revenue.
Mr Mulcahy: Where does that end up?
MR BARR: It ends up—certainly not on the basis of—
Mr Mulcahy: Oh, come on.
MR BARR: Hear me out. It is not allocated on the basis of where the money is spent, Mr Mulcahy. It is allocated on where people live. So whether tourists visit the ACT and spend money—
Mr Mulcahy: The GST ends up with the states?
MR BARR: Yes, the GST ends up, via the commonwealth, in transitional payments, back to the states. But it is not—I repeat: it is not—allocated on the basis of where the money is spent. It is allocated on a per capita basis to the states and territories.
There seems to be a suggestion that the ACT government, through some mysterious multiplier effect, is going to get back more revenue in taxation than it provides in payments to the tourism industry in what amounts to an attempt to address a market failure whereby other organisations will not invest because they fear the free rider effect of their fellow businesses. I accept that there is a role for government in addressing that market failure, but we do not want a tourism industry that is reliant solely on government funding. Those organisations do not want it either. They do not want it. No-one wants to be reliant on government handouts to maintain their businesses. No-one wants that.
Mr Mulcahy: The hotels have spent millions on it.
MR BARR: The hotels have, but again the ACT government is the largest provider of funding into the tourism sector. There is no doubt about that—in terms of marketing, product development and all of those areas. We provide the bulk of the funding to address a market failure. To suggest that this is some massive cash cow—that we get five times the amount we invest back in taxation revenue—is a furphy. It is not true, and Mr Smyth should stop peddling it—just as he should stop suggesting that we have lost half the staff in tourism: we have not. Just as he should stop suggesting that we have eliminated all funding to the tourism industry council. We have not.
There is a litany of press releases from the shadow minister that are factually incorrect. He consistently gets it wrong. The thing that he cannot stomach is that, in response to addressing administrative inefficiencies within the tourism area and providing incentives for the industry to get off their backsides and work with government—to move out of the comfort zone and work with government—we are starting to see people engaging in the new tourism campaign, in the range of new areas that the government is funding. (Time expired.)
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