Trouble in paradise

Five stars: Kingfisher Bay Resort’s waste levy has jumped by $15,000 a year

Queensland has long been the destination of choice for Japanese and New Zealand holidaymakers. Until recently, their annual pilgrimage to the state’s alluring beaches had provided a steady stream of income for the local hospitality industry. But now hoteliers say they are being crippled by excessive government charges at a time tourism levels are declining.

The Queensland government recently increased workers’ compensation premiums as well as raising rents on state-owned land, housing resorts and hotels. It’s also added a new industry waste levy that costs resort owners thousands of extra dollars each year.

Melbourne businessman Paul Van Min, the new owner of the 50-room Silky Oaks Lodge in Queensland’s Daintree rainforest, says the current government simply doesn’t understand business. “It’s always disappointing to see the continual increase in government fees and charges at a time when this industry needs real support, not more expenses,” he says.

Since he bought the resort last year, Van Min has spent $2 million reinstating it to five-star status in a bid to attract more guests.

Meanwhile, the number of tourists coming to Queensland has dropped in the 12 months to March, Tourism Queensland reports. International arrivals were down 2 per cent while interstate arrivals fell 3 per cent.

Even more worrying are signs that Queenslanders themselves are staying at home, with a 4 per cent collapse in intra-state arrivals, one of the state’s biggest tourism earners.

Gary Smith, the managing director of Fraser Island’s Kingfisher Bay Resort, says increased government charges, such as the industry waste levy, are making matters worse.

Higher rental charges under Queensland’s Land Regulation Act have also added to his burden, along with increased worker compensation premiums. The resort’s Japanese owners tried in vain to sell it earlier this year.

“We have been whacked from pillar to post,’’ Smith says. “The industry has struggled to maintain revenue at historic levels as a result of the GFC and high Australian dollar. Government charges are one thing but they all add up to make the trading environment more difficult.”

Smith says the Queensland government’s new industry waste levy adds $15,000 to his costs on top of the $33,000 the resort pays the local council for dumping waste each year.

Under Queensland’s Land Regulation Act 2009, rental charges for state land rose from 4 per cent to 6 per cent of the “three-year average of the land value”. To mitigate the effect in the first year, the government has capped the increase.

For Kingfisher Bay, workers’ compensation premium rates have increased from $435,000 to $571,000 a year. The resort also pays about $600,000 a year in payroll tax and about $200,000 on land tax.

A former chairman of the Queensland Tourism Industry Council, Smith says the state government needs to pay heed to the impact of spiralling government taxes and charges and their impact on tourism businesses’ ability to earn decent rates of return on capital.

“It is widely acknowledged that the tourism industry in Queensland and Australia needs to introduce fresh new product and in some cases needs to upgrade,’’ he says. “There’s a lot of focus on how we can better promote the state and get more people here. That’s great but there ought to be more focus on the business operating conditions from a cost perspective where governments can assist.’’

Peter Lawlor, Queensland’s Minister for Tourism, says the state has the lowest worker compensation charges of all states.

“I also know the land taxes in Queensland are one of the lowest in Australia,” he says, but concedes there have been concerns over new sewage fees, which have pushed Kingfisher Bay’s environmental licence fee from $1500 to $10,600 a year.

“The waste levy is aimed at improving disposal practices. It’s designed to change behaviour and is consistent with other states.”

Lawlor defends Queensland’s ability to attract tourists.

“We have concentrated on hard-hitting tactical campaigns such as encouraging more New Zealanders to visit the Sunshine Coast. This has increased bookings by 50 per cent, which translates to almost 1500 room nights. And there is reason for optimism. Jetstar has introduced 25 extra services to Cairns. That’s almost 9000 seats per week. Jetstar would not do that on a whim – they must have some confidence the market is coming back.’’

queensland visitors (year ended march 2010)

Domestic (overnight): down 3 per cent

Intrastate: down 4 per cent

Interstate: down 3 per cent

International: down 2 per cent

Domestic day trippers: up 8 per cent

BRW

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