Industry, tourism and resources portfolio

1. This measure was incorporated in the ATC’s estimates at the 2003-04 Mid-Year Economic and Fiscal Outlook (MYEFO) update and reflected in the 2003-04 ITR Portfolio Additional Estimates Statements.

168

REVENUE FROM INDEPENDENT SOURCES

Table 1.3 (below) summarises estimated revenue from independent sources in 2003-04 and 2004-05.

Estimated		Estimated
revenue		revenue
2003-04		2004-05
$’000		$’000
Sales of goods and services	269	260
Interest	1100	1000
Other industry contribution	17,870	22,909
Net foreign exchange gain	3,586	-
Total estimated revenue	22,825	24,169

Revenue from independent sources is included in Table 2.1.1 (Total resources for outcome 1) on page 175.

The ATC derives revenue from industry through advertising and fees for participation in trade events. These are commercial arrangements in competitive markets, and do not fall within the scope of cost recovery as defined in the Cost Recovery Guidelines for Information and Regulatory Agencies issued by the Department of Finance and Administration.

MOVEMENT OF ADMINISTERED FUNDS FROM 2003-04 TO 2004-05

There are no administered funds relating to the operations of the ATC.

SPECIAL APPROPRIATIONS

The ATC does not have any special appropriations in 2004-05.

SPECIAL ACCOUNTS

The ATC does not have any special accounts in 2004-05.

ADMINISTERED CAPITAL AND DEPARTMENTAL EQUITY INJECTIONS AND LOANS

The ATC has not been appropriated any administered capital, departmental equity and/or loans for 2004-05.

Section 2: Outcomes and outputs information

OUTCOMES AND OUTPUTS

The ATC works to achieving one outcome specified by Government. The following section provides an agency overview and description of the ATC’s overall outcome. The map below shows the relationship between the outcome and the contributing outputs.

Financial details for outcome 1 appear in Table 2.1.1 (on page 175) while performance information is in Table 2.2.1 (on pages 177 - 178).

Australian Tourist Commission Managing Director, Mr Ken Boundy

Total Price of Outputs $145.200m Departmental Outcomes Appropriation $121.031m
Output cost attribution

Pricing for Consumer Marketing and Trade Marketing outputs consists of direct project costs; allocation of Research, Product development and Information Services expenses according to estimated usage for each output and allocation of salary and overheads according to the share of total gross expenses for each output.

Changes to outcomes and outputs

There are no changes to the ATC’s outcomes and outputs framework in 2004-05.

Trends in resourcing across outcomes

Chart 1 below shows the trend in funds appropriated to resource the ATC’s outcome since 2001-02.

Chart 1: Trends in departmental appropriations for outcome

Note: the ATC has no administered appropriations.

OUTCOME 1 — DESCRIPTION

The number of visitors to Australia from overseas will increase and the benefits to Australia from overseas visitors will be maximised, including benefits from employment, while promoting the principles of ecologically sustainable development and seeking to raise awareness of the social and cultural impacts of international tourism in Australia

Inbound tourism is a major source of export earnings for Australia. In 2001-02, international visitors consumed $17.1 billion worth of goods and services produced by the Australian economy. This represented 11.2% of total exports of goods and services, an increase of 34% since 1997-98 (Australian Bureau of Statistics). With expected growth in visitor numbers, tourism export earnings (2001-02 dollar terms) are forecast to increase to $27.5 billion, at an average annual rate of 4.5% from 2002 to 2012 (Tourism Forecasting Council).

In 2001-02, Australia’s inbound tourism accounted for 24% of total tourism activity (Australian Bureau of Statistics, Tourism Satellite Account). In 2001-02, tourism (inbound and domestic, direct and indirect) was responsible for the employment of over 928,700 persons, 10% of all those employed.

Following two years of flat global tourism in 2001 and 2002, 2003 began with the build up to the war in Iraq, followed by the spread of SARS and the associated media reports discouraging travel. While terrorism and SARS dominated tourism reporting, this period also featured a global economic recession that reinforced the downturn in travel. Many consumers shifted their travel plans closer to home, with negative implications for long haul destinations such as Australia. In addition, the reactions of overseas product suppliers and governments to the downturn in global tourism had further implications for inbound tourism to Australia. The worst hit overseas travel suppliers were forced to discount, which led to the global spread of price pressure on tourism product suppliers and this reduced Australian industry yields. Governments around the world, including Australia, recognised the economic repercussions of falling tourism and increased their financial assistance, particularly for international marketing. More recently, an improving global economy and reduced fear of travel by consumers has prompted a more optimistic outlook, at the same time as the appreciation of the Australian dollar has further increased pressure on industry yields.

The ATC’s principal statutory objectives are:

• 
  to increase the numbers of visitors to Australia from overseas;
  
• 
  to maximise the benefits to Australia from overseas visitors; and
  
• 
  in meeting those objectives, to work with other relevant agencies to promote the principles of ecologically sustainable development set out in subsection 21(3) of the Natural Heritage Trust of Australia Act 1997 and to seek to raise awareness of the social and cultural impacts of international tourism to Australia.
  

MEASURES AFFECTING OUTCOME 11
Budget estimates — enhanced quality and timeliness Expense ($m) 2004-05 2005-06 All Agencies 16.4 15.8 Related capital ($m) All Agencies 0.6 0.8	2006-07 15.2 -	2007-08 15.1 -

Note. The Australian Tourist Commission component of this measure is shown in Table 1.2 (Summary of measures disclosed in the 2004-05 Budget).

The Government will provide $88.5 million over four years (including $24.8 million in 2003-04) to implement the Budget Estimates and Framework Review recommendations that were endorsed by the Government in 2002. This amount includes $1.4 million in capital funding.

Provision for this purpose was made in the Contingency Reserve in the 2003-04 Budget pending consideration of funding for individual agencies.

This funding is in addition to the $3.6 million specifically provided to the Foreign Affairs and Trade and Employment and Workplace Relations portfolios in the 2003-04 Budget, and $54.4 million provided to the Department of Finance and Administration was recorded as a measure in the Mid-Year Economic and Fiscal Outlook 2002-03.

1 This relates to measures disclosed in the 2004-05 Budget context (that is, measures agreed since the Mid-Year Economic and Fiscal Outlook (MYEFO)).

OUTCOME 1 — RESOURCING

Table 2.1.1 shows how the 2004-05 Budget appropriations translate to total resourcing for outcome 1, including administered expenses, revenue from government (appropriation), revenue from other sources, and the total price of outputs. Cell references C1 and E1 show the links back to Table 1.1 (Appropriations and other revenue).

Estimated			Budget
actual			estimate
2003-04			2004-05
$'000			$'000
Administered appropriations		0	0
Total administered appropriations		0	0
Departmental appropriations
Output 1 - Consumer Marketing		74,370	96,825
Output 2 - Trade Marketing		23,485	24,206
Total revenue from government (appropriations) (C1)		97,855	121,031
Contributing to price of departmental outputs		81%	83%
Revenue from other sources
Output 1 - Consumer Marketing		17,347	19,335
Output 2 - Trade Marketing		5,478	4,834
	Total revenue from other sources	22,825	24,169
Total price from departmental outputs (E1)
(Total revenue from government and from other sources)		120,680	145,200
Total estimated resourcing for outcome 1
(Total price of outputs and administered appropriations)		120,680	145,200
		2003-04	2004-05
Average staffing level (number)		212	220