Productivity falls again, PwC says tourism operators need Government help

Small business tourism operators need more assistance to cope with their varied tasks, PwC says, as a report shows that labour productivity in Australia fell for the fifth quarter of eight.

 A report by the accounting and advisory giant into labour productivity – the output generated per hour of work – shows a 0.2% fall nationwide in the September quarter, driven by falls in Queensland’s mining and agriculture industries.

The result is the worst growth since 2004-05, when labour productivity fell by 0.6%.

PwC partner and economist Jeremy Thorpe says the decline is partly driven by the mining boom, which is pulling workers from other sectors, driving up the Australian dollar, and is still in a large investment phase.

“But productivity in other sectors over a period hasn’t performed as it should have,” Thorpe says.

“And there’s a concern that if they don’t perform as they should, they’ll be hollowed out.”

The report finds that Queensland’s 4.9% quarterly fall drove the nation’s overall decline in labour productivity.

“This isn’t all bad news. Hours worked grew 6.5%, rebounding to just short of its peak prior to the devastating floods of late 2010 and early 2011. Major employment gains were seen in manufacturing, mining and agriculture, and also in the financial and insurance services sector,” it says.

Just half of the 16 sectors recorded productivity growth. These were:

• Arts and recreational services.
• Rental, hiring and real estate services.
• Financial and insurance services.
• Accommodation and food services.
• Wholesale trade.
• Construction.
• Manufacturing.
• Other services.

Sectors that declined were:

• Administrative and support services.
• Professional, scientific and technical services.
• Information, media and telecommunications.
• Transport, postal and warehousing.
• Retail.
• Electricity, gas, water and waste services.
• Mining.
• Agriculture, forestry and fishing.

PwC’s Jeremy Thorpe says the fragmented nature of the tourism industry, and the spillover benefits of domestic and international tourism give cause for Government assistance.

Thorpe says the Government has a role in presenting a national image overseas, assisting with infrastructure, and reducing regulation.

He advises cottage operators to outsource things that can be commoditised, such as book-keeping, and focus instead on customer service.

The report adds that small business tourism operators “need to be able to provide dynamic websites, flexible billing approaches, office and people management as well as knowing their product back to front. It’s a lot to ask of the average Australian.”

“Gone are the days of being an expert in tourism; to survive as an individual operator in this environment you need to be a web designer, book keeper, marketer, HR specialist and office manager even before the first customer comes through your door,” it says.

“This is a difficult ask in an industry dominated by individuals with a passion for showing visitors the wonders that Australia has to offer.”

“Greater assistance from the Government in these areas could alleviate these problems and free up the industry to spend the time doing what they do best; showing off what this amazing country has to offer.”