The low down on Turnbull Government 2017/18 Federal Budget

11 May, 2017

The Turnbull Government released its 2017/18 Federal Budget on Tuesday 09-May-2017 with some surprising and some not so surprising inclusions. Tourism and infrastructure was a key component of the budget with the Government outlining the process for funding the Western Sydney Airport, while Tourism Australia took a hit and lost AUD35 million (USD25.7 million).

Below is an overall snapshot of the key findings related to tourism and what it means for the industry:

  • Tourism Australia budget to be reduced from AUD143 million (USD105.2 million) to AUD129 million (USD94.9 million);
  • Visa application fees to be increased in line with CPI from Jul-2017, resulting in an extra AUD410 million (USD301.8 million) in revenue over four years;
  • Continued funding for demand-driver infrastructure totalling AUD19 million (USD14 million);
  • AUD5 million (USD3.7 million) for tourism-reliant areas to recover from Tropical Cyclone Debbie;
  • AUD20 million (USD14.7 million) to fund business development cases for projects to deliver faster rail connections between capital cities and regional areas;
  • AUD30 million (USD22.1 million) towards a Melbourne Airport Rail Link business case.

Funding for Western Sydney Airport

The Government committed to AUD2.3 billion (USD1.7 billion) in funding towards the AUD5.3 billion (USD3.9 billion) cost over the next 10 years towards the development of Western Sydney Airport.

The government plans to establish a government-owned company with strong private sector expertise in FY2017/18 to manage the development process and ensure it is operational by 2026. Expected to be the second international airport in Sydney, the airport is forecast to deliver net long-term benefits to the Australian economy with a return of AUD1.80 for every AUD1 invested.

The government will invest AUD73.2 million (USD53.8 million) on planning and site preparatory works in FY2017/18 and expects to spend a total of AUD115 million (USD84.5 million) for site preparation. Tender for early works will be issued in late 2017. As part of this infrastructure funding, AUD2.9 billion (USD2.1 billion) has also been put aside to enhance transport infrastructure in Sydney's western suburbs to support the new airport.

Rail a big winner with massive injections of funding of AUD20 billion (USD14.7 billion) investment in rail. The plan includes:

  • AUD10 billion (USD7.4 billion) National Rail Programme for urban and regional passenger rail projects that reduce travel times;
  • Additional AUD8.4 billion (USD6.2 billion) to build Melbourne to Brisbane Inland Rail;
  • AUD30 million (USD22 million) towards development of a business case for Melbourne Airport Rail Link. The process is expected to span across two financial years with AUD15 million (USD11 million) to be awarded in FY2017/18 and the remaining in FY2018/19;
  • Additional commitments to rail in the 2017/18 Budget:
    • AUD500 million (USD368 million) to upgrade regional rail networks in Victoria;
    • AUD792 million (USD583 million) for Perth Metronet;
    • AUD20.2 million (USD14.9 million) for Murray Basin Rail building on our previous commitment;
    • AUD20 million (USD14.7 million) to progress business cases for faster rail connections between major cities and their surrounding regional centres.

Not everyone was happy with the impacts of the Budget on tourism

Tourism & Transport Forum (TTF) responded to the Budget believing it will jeopardise the growth of Australia's visitor economy and put at risk the ability of the tourism sector to become one of the nation's largest employment sectors. TTF CEO Margy Osmond stated:

"Instead of recognising the tourism sector as the next super-growth sector, the Government has removed AUD35 million (USD25.7 million) out of Tourism Australia over the next four years, and in the process put tourism jobs at immediate risk across the country".

TTF did however praise the commitment to begin construction of the Western Sydney Airport.