Bankrolling Oprah: The New Tourist Strategy

Fifty per cent of all advertising is wasted, says the marketing cliché. The problem is figuring out which fifty per cent.

Last week we had a rare burst of honesty about the usefulness of the money governments spend on high profile tourism campaigns. The former Tourism Minister John Brown admitted, “We spent hundreds of millions of dollars over 30 years without much effect, I must say that honestly.”

Brown was a minister in the Hawke government when he commissioned and oversaw the famous Paul Hogan “Throw another shrimp on the barbie” ads during the 1980s. That Hogan campaign is constantly held up as the greatest success story of Australian tourism. It’s the yardstick by which all other campaigns are measured.

So his admission it’s all been an enormous waste of cash is unlikely to feature prominently in Tourism Australia’s next annual report.

Brown was helping announce Oprah’s visit to Australia. Her visit is being heavily subsidised by Australian taxpayers: Queensland is chipping in $400,000, New South Wales between $1 and $2 million, and the federal government $1.5 million.

Oprah is personally worth an estimated US$2.5 billion, so clearly she doesn’t need the money.

But Brown doesn’t want us to be “cynical about the cost”. The current tourism minister, Martin Ferguson, is sure it is “money well spent”.

Special Oprah-in-Australia episodes will go to air next January alongside Tourism Australia’s G’Day USA campaign. And, the government hopes, American dollars will flood in.

Maybe millions for Oprah will succeed after millions for “Where the bloody hell are you?”, the Baz Lurhmann Australia tie-in campaign, and 2004’s “Australia: A Different Light” with Delta Goodrem and Richie Benaud, failed.

The Oprah effect can turn a book into a bestseller just by being featured on her program. Our tourism bureaucrats are hoping that scales to continents.

But I don’t want to dwell too much on the specifics of the Oprah visit.

The federal government’s thinking about tourism has always been woolly. Tourism promotion has been a swamp in to which the government has poured cash and consultants for decades.

In Crikey in June, Noel Turnbull pointed out the government is running two simultaneous marketing campaigns, with contradictory messages. The first is a branding campaign which suggests there’s more to Australia than people think. The second is a tourism campaign which suggests there isn’t; that we’re all about glossy surfaces and pretty landscapes.

One wonders how many marketing and public relations consultants are going to feed on the Oprah campaign.

But why are governments doing tourist promotion at all?

The overwhelming beneficiaries of tourism dollars are private industry: hotels, restaurants, transport, souvenir shops, pubs, cafes, barbecue manufacturers and shrimp farms. Tourism promotion does their marketing for them – the government spends millions of dollars trying find customers.

Certainly, the government gains a small amount of money from the GST levied on things tourists might buy. But the same holds true for all Australian industries selling products to Australian nationals – the government gains a little from every sale. So such logic would suggest the entire advertising industry should be subsidised by government.

If the benefits of promotion are so enormous, the tourism industry should be paying for it themselves. There’s no reason they can’t band together in another of their many peak bodies to sponsor international marketing campaigns. Let industry discover which half of advertising works and which half doesn’t.

Government policies designed to promote tourism almost always end in disappointment, as John Brown recognised.

But we don’t only push out ads. We also spend vast sums on events to try to lure in overseas crowds.

The major events strategies of Commonwealth and state governments are predicated on a belief that big sporting contests translate into big touristy payoffs.

This month is the 10th anniversary of the Sydney Olympics. We ran a good event. But we got a bad Olympic hangover. Visitor numbers to New South Wales actually declined relative to other Australian states. It’s not our fault: Beijing and Athens had the Olympic hangover too.

The Sydney Olympics was a bigger deal than Oprah’s tour ever could be. We earned a great deal of international goodwill and publicity in those few weeks in 2000. But tourism went backwards.

In Victoria, the Grand Prix – the pride and joy of the Victorian tourism lobby – isn’t even paying for itself anymore. It posted a $49.2 million loss this year, and was promptly bailed out by the state government.

Here’s hoping Australia doesn’t win the privilege of hosting the World Cup.

There’s good reason to be sceptical that Oprah is the tourism spend to buck the trend. The former tourism minister may be optimistic about Oprah’s visit but history tells us we shouldn’t be.

Savaging a popular policy a tricky task for Turnbull

Malcolm Turnbull’s elevation to the shadow communications portfolio may be just what the debate over the national broadband network needs. It could be just what the Liberal Party needs, too. But Turnbull has a hell of a job: to persuade the electorate that a gigantic, government-subsidised gift of a super-fast internet is a bad idea. An Essential Report poll late last year found 65 per cent of Australians thought it was important the NBN was built. Sixty per cent of Coalition supporters did, too. As a general rule, Australians like free stuff even if eventually they have to pay for it through tax.

Both the government and the opposition have lined up their new portfolios in time for the next sitting of Parliament.

The election is over and Lab or wants change, not continuity. Julia Gillard has tried to eliminate all traces of the embarrassing Kevin Rudd era.

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On the other side, the Coalition did astonishingly well at the election. So, Tony Abbott’s thinking goes, why fix what’s working? Turnbull’s move to communications is the only significant change.

The Coalition’s broadband message was an unmitigated disaster during the election – the biggest problem with an otherwise robust campaign.

It’s possible that Abbott is laying a cunning trap for his rival. From now on, the debate over the broadband is going to be intimately linked with Liberal Party leadership questions. And who would want to be saddled with the job of opposing one of Labor’s most popular policies?

But Abbott needs Turnbull to do well. Ever since he took over in November 2009, Abbott’s leadership has burnt fast and hot. His strategy was to barge into The Lodge. Now it seems likely the Coalition faces a full term in opposition. Abbott has to turn off his fast burn and apply slow, indirect heat to the Gillard government. He will need his shadow ministers to break down government policies bit by bit, not try to blow them up as quickly as possible. In other words, Abbott is relying on Turnbull to make the broadband network look like insulation, not the mining tax. Turnbull may be able to do so.

Since 2007, the government’s Communications Minister, Stephen Conroy, has successfully portrayed any Coalition critic of his broadband plan as a Luddite, as if they were opposed to the very idea of the internet and just a sledgehammer away from machine breaking. Conroy won’t be able to play that card now. You couldn’t parody Turnbull’s love of technology. He was not just the chairman of Ozemail; he recently released an iPhone application dedicated to all things Malcolm.

The Coalition can’t stop the broadband network, but it will be able to show how poorly thought through the project has been. After all, the network the government is building is not the network it took to the 2007 election. That first plan failed.

On a now infamous flight between Canberra and Sydney in April last year, Conroy used the time he could get with Kevin Rudd to explain their $4.7 billion scheme wouldn’t work. The two men sketched the

$43 billion scheme we’re getting now.

If we’ve learnt anything about the internet, it’s that we always find new uses for it and we always want more speed. But that doesn’t mean this specific network at this specific price, built in this specific style is the best way to get it. And it doesn’t mean the network has to be built by government. Before the 2007 election, Telstra was desperate to roll out high-speed broadband itself. Had the Howard government made some regulatory changes, we would already have the network at no cost to the taxpayer.

There’s a catalogue of problems with the NBN. A decade after Telstra’s privatisation, the government has taken responsibility for telecommunications.

Unfortunately, the Coalition’s alternative policy does little to resolve the deep regulatory issues that have held back Australian broadband. But right now, the burden of proof is on the government to show its NBN is worth the price tag.

The Liberals need their old, discarded leader to knock serious holes in the national broadband network.

Chris Berg is a research fellow with the Institute of Public Affairs.

Tea Party conservatives are brewing up a storm

It was hardly needed, but the Tea Party confirmed this week it’s a big deal in American politics. It’s a big deal for conservative politics internationally. New technology is giving conservative activists the power to form the sort of genuine grassroots movements the left has been for decades.

On Tuesday, the Tea Party scored a huge win when Christine O’Donnell beat Mike Castle in a Republican Senate primary in Delaware. Castle is the embodiment of an establishment Republican. He’s enjoyed a nine-term run in the House of Representatives. He was Delaware’s governor for seven years. He’s a great-great-great-great-great grandson of Ben Franklin. He’s very, very moderate.

He lost to the deeply conservative Christine O’Donnell, who carried a Sarah Palin endorsement. Defeating Castle scored her one of the biggest victories of the Tea Party so far.

Few overseas political movements are less clearly understood in Australia than the Tea Party. That’s no surprise. Sometimes not even the Tea Party is entirely sure what it stands for.

Take a questionnaire for Republican and independent candidates, written by a small, obscure Tea Party group in Erie County, Ohio. They call themselves the Freedom Institute. To get its approval you must believe marriage is solely between a man and a woman, gays should be kept out of the military, tariffs should be increased, the Federal Reserve should be abolished, and ”the regulation of carbon dioxide in our atmosphere should be left to God and not government”.

The Freedom Institute wants tax cuts and government workers to be exposed to ”the free-market system”. But they also want to impose trade barriers to keep jobs in the country. They want their politicians to be conservatives, but populist conservatives with some eccentric and jumbled views.

But compare the Freedom Institute’s list with a similar one supported by FreedomWorks, a large non-profit organisation with headquarters in Washington. They sum up the Tea Party’s central tenets as: start fundamental tax reform, stop the tax hikes, end runaway government spending, and protect the constitution. In other words, limited government, low taxes, and an end to government waste.

Few of those policy positions would be opposed by conservative, small-government Republicans. In Australia, they’d easily recognised as free-market liberalism. But for the international press, the Erie County list is far more interesting. The revolt against the Republican establishment is as much a revolt against big spending, big taxing George Bush as it is against the Obama administration.

Bush’s Republican administration instigated the rolling program of Wall Street bailouts which have plunged the US into debt. The US government deficit this year will be $1.3 trillion. That’s larger than our entire economy.

A Bloomberg poll found overwhelmingly the thread which ties the Tea Party together is a belief the US has lost its way in the past few years. Eighty per cent agreed the recent expansion of government was a threat to liberty.

A CBS/New York Times poll found Tea Party supporters tend to be more educated than the general public. And they’re not bad judges of character. The majority believe Sarah Palin is unqualified for the presidency. Bear that in mind when you next hear the Tea Party dismissed as a crazy fringe.

The political class isn’t sure what to make of the Tea Party. It comes from outside the polished environs of Washington. Few members have been involved in politics before.

They’re all simply plugged into networks of blogs and mailing lists. That makes the Tea Party sometimes confused, often naive, and easily led astray. It also makes its members powerful.

In Australia, we just saw how potent a conservative grassroots can be. The implosion of the parliamentary Liberal Party late last year over climate change was driven by a membership which saw Malcolm Turnbull’s support of the emissions trading scheme as unacceptable.

Thousands of emails were sent by party members and others calling for the position to change. In the end, they had to change leaders. Hopes for bipartisan climate action disappeared, and Kevin Rudd’s prime ministership died in the Liberal party room. A conservative grassroots destroyed a Labor prime minister.

Compare the attention that movement got to the praise heaped upon the even tiniest left-wing movement. Poor old GetUp! wishes it was half as effective as the Liberal membership last November.

Technological change has given conservative popular movements the power to challenge their establishment in the same way left-wing movements have for half a century. That’s the real story of the Tea Party.

It may get sucked into the Republican mainstream. Or its candidates may fail at election time. But the Tea Party isn’t wrong. America has serious problems. Those problems have energised the conservative base.

Life under Gillard could be an expensive business

If Julia Gillard holds government, the alliance she will have cobbled together will speak in one voice on one major issue – climate change.

Andrew Wilkie’s addition to the Gillard side on Thursday afternoon confirms this. The new independent from Tasmania had ”a price on carbon” prominent among his 20-point list of priorities for action.

Despite many Greens being uneasy with a quasi-market approach to climate change, Melbourne MP Adam Bandt and his party have embraced an emissions trading scheme.

And Gillard will be looking to keep the nine Greens holding the Senate balance of power in her government’s tent – a task made much easier by the lower house agreement she signed with Bob Brown this week.

Let’s say Rob Oakeshott and Tony Windsor fill up seats 75 and 76 in favour of the Labor government.

Oakeshott is clearly for climate action. In February, when the government’s Climate Pollution Reduction Scheme was looking ever more hapless, Oakeshott called its collapse ”a pox on both the major parties” and a ”disgraceful failure of so-called leaders in this country to tell the story of climate change and energy security”.

Tony Windsor has said that a price on carbon is inevitable, that he supports it, and doesn’t believe it will be a disaster for the bush.

Anyway, that’s the maths. Bob Katter may end up supporting Gillard, but does Bob Katter strike anyone as a team player? The member for Kennedy thinks Sir Nicholas Stern and Ross Garnaut are ”lightweights”, so it’s unlikely the government could count on his support for climate legislation any time soon.

Assuming the Labor alliance can survive the next three years – and that Gillard’s leadership will too – the precariousness of minority government will leave the prime minister looking for a policy win. An emissions trading scheme is an obvious candidate.

And not just any ETS. The 2009 model reflected the need to negotiate with the Liberals in the Senate. A new ETS would reflect a deal with the Greens, who rejected the last one as too weak, and the independents – Oakeshott has shown a reverence for Garnaut’s original, ”pure” emissions trading scheme.

Hung parliaments can be funny things. Despite the low profile of climate change in the 2010 campaign, and despite not gaining government in its own right, the ALP may now be more able to enact the policy it most wanted to last term.

But the debate over climate change policy has regressed badly. In 2009, Parliament was discussing the mechanics of the government’s elaborate cap and trade scheme. But in 2010, we’re stuck on this simple phrase: ”price on carbon”. It makes it all sound so simple.

But what would its target emissions level be? When would it start? How should trade-exposed energy-intensive industries be compensated, if at all? Should low-income earners be compensated?

Not to say anything of the main policy crunch of November and December 2009 – the failure of the Copenhagen summit. An emissions trading scheme cannot achieve its goal without being part of a global agreement.

The notion of putting a price on carbon is popular. Around 50 per cent of Australians believe climate change is a serious problem that should be tackled by government.

Yet actually paying that price is substantially less popular.

A poll by the Lowy Institute has tracked the willingness of Australians to pay extra for electricity. The number of people who refused to pay anything to tackle climate change has increased from 21 per cent in 2008 to 32 per cent in 2010. And less than a third of those who believe that there should be a significant price on carbon report themselves willing to pay a significant price for energy.

Even if the federal government manages to get an ETS through Parliament, the key to emissions reduction is to slowly but perceptibly increase the cost of emitting.

Recent elections have shown us Australians are inordinately sensitive to real or imagined cost-of-living increases. Few governments would be eager to deliberately ratchet up the price of electricity every single year.

Supporters of emissions reduction argue that new technologies will fill the gap and keep prices down. To a degree, that’s true. But the pace of technological change is not guaranteed. There’s no reason to believe that the price of wind power will drop in concert with a rise in the carbon price.

In her deal with the Greens, Gillard ditched the much-ridiculed citizens’ assembly. Instead, she plans a climate change committee, formed under the auspices of Parliament, and including only those committed to a price on carbon.

Her alliance may help Labor get emissions trading through Parliament. But the emissions trading model the climate change committee devises may create more political problems than it solves.

Chris Berg is a research fellow with the Institute of Public Affairs. Follow him at twitter.com/chrisberg