House of Representatives Committees

CHAPTER 8: COST RECOVERY AND OTHER FUNDING SOURCES

Cost recovery

8.1 All Governments have, to a greater or lesser extent, introduced user charges. According to DEST, 'there is a general acceptance amongst Governments that the "user pays" philosophy needs to be applied more widely to contribute to the costs of the management of World Heritage Areas'. ^[1] The present Commonwealth Government has confirmed its commitment to recovering a greater proportion of the costs of managing Australia's world heritage properties. ^[2] ANCA and the then Commonwealth Department of Tourism both reported that, as time passes after the initial announcement of the introduction of charges, the charges are generally well accepted by operators and visitors, especially when the revenue obtained is used to improve facilities. ^[3] Non-governmental organisations representing economic and conservation interests were also broadly supportive of cost recovery. ^[4]

8.2 The issue of cost recovery has already been taken up in relation to world heritage management in Australia. The requirement to closely examine the options for increasing cost recovery was included in the agreement finalised by the Commonwealth and Tasmanian Governments, and the Department of Finance suggested that this requirement should be one of the elements in future Commonwealth/State agreements. ^[5]

8.3 DEST commented on:

... [the] dilemma of escalating demands being placed on limited financial resources ... [which] has the potential to reduce the quality and quantity of the services and facilities provided, as well as result[ing] in less effective management of the resource itself.

Under these circumstances:

^[6]

8.4 A convincing argument can be made for charging those who benefit most from world heritage areas, either financially or as visitors. It is argued that, while Australian taxpayers as a whole contribute through government funding to world heritage management, those who reap special rewards from the areas by earning a living from tourism or through their experiences while visiting the areas should make an additional financial contribution. As the National Trust of Australia (Victoria) put it, 'those who share the economic wins from World Heritage should equally share economic costs'. ^[7]

8.5 The financial value of a world heritage area can be estimated from the income flow generated by industries based on the resources in the area, of which the most significant is tourism. As Table 8.1 shows, the gross financial values of activities carried out in the larger world heritage areas are substantial. What cannot be as easily estimated is the non-market value of world heritage areas, such as the conservation of natural and cultural resources. An attempt can be made to put a value on the experiences of visitors by asking them how much more they would be willing to pay for the experience, over and above the cost to them of their transport, accommodation and other services. Estimates in 1991-92 of the non-market values for the Great Barrier Reef, for example, ranged from $23 million to $357 million. ^[8] The variation in these figures reflects the difficulty of making such estimates, but when added to the financial values shown in Table 8.1 of $776 million, the overall value of the Reef is seen to be very considerable.

Table 8.1—Estimates of gross financial values of certain world heritage areas, based on 1991-92 data

World heritage area	Value in $ million
World heritage area	Tourism & recreation^a	Other uses^b	Total value^c
Great Barrier Reef	776	147	923
Wet Tropics	377	25	402
Kakadu	122	not available	122
Uluru	38	not available	38
Tasmanian Wilderness	59	0.2	59

a Gross expenditure by tourists and recreational visitors.
b Gross revenue.
c These include only values able to be measured.
Source: Sally Driml, p vi (see footnote 8, Chapter 8).

8.6 Where such large values attach to world heritage areas, it appears reasonable to ask those benefiting from them to contribute to managing them. This is particularly so when it is clear that unmanaged or undermanaged exploitation of an area leads to the degradation of that area and diminishes the nature of the visitors' experiences and the area's sustainable usefulness. This argument is more pressing when the budget of a large, heavily used world heritage area, such as the Great Barrier Reef, is compared to the value of the area to the local economy. Consultants for the GBRMPA estimated that the direct value of the Reef world heritage area to the adjacent community in 1994-95 was $1.1 billion. By contrast, the Authority's total budget was $22.3 million or 2 per cent of the estimated $1.1 billion of gross value of direct uses of the area. The day to day management component of the budget was 0.7 per cent of $1.1 billion. As the Authority pointed out, 'if a wider definition of the value of direct uses of the reef were adopted, to include for example all multipliers, the proportion of the budget to value would be even smaller'. ^[9]

The advantages and disadvantages of cost recovery

8.7 The Department of Finance listed a number of advantages of recovering costs. It argued that charging users and beneficiaries:

provides 'a predictable, reliable and sustainable form of funding for the management of WHAs [world heritage areas] which relate[s] to the costs of providing public access to them';
increases feelings of community ownership and involvement in the management of the area;
generates employment; and
educates and informs about the impact of activities in world heritage areas and the costs of providing adequate protection. ^[10]

8.8 In a paper prepared for a world heritage managers' workshop, DEST suggested some additional benefits. ^[11]

The public appreciates more fully those facilities and programs for which payment is made.
The collection of fees provides opportunities for direct public contact with park staff and the provision of information and interpretation and the collection of visitor statistics.
The willingness of the public to pay for certain activities or facilities is a useful guide to management planning.
Charges can be used to modify visitor behaviour. ^[12]
User pays presents a mechanism for covering the economic costs of opportunities forgone.

8.9 DEST's paper also canvassed the arguments against user pays.

Fees constitute a form of double taxation whereby the public has paid for the development of the facilities through public funds but must pay again to use the facilities.
Recreation may be considered a basic right and need, and should be provided without charge.
Reserved public lands are a public asset and access should be available free of charge.
Those who need public recreation areas are generally those who are least able to pay. Equity considerations are important because charges may discriminate against lower income groups.
When fees and charges begin to provide a substantial component of the income of the management agency, there is the potential that revenue generating facilities only will be provided.

8.10 While not opposing the use of cost recovery mechanisms, the CCWA, the Tasmanian Conservation Trust and the Wilderness Society (Tasmania) also warned of possible conflicts of interest in balancing revenue raising against the protection of world heritage values. The same worry arises when private investment has been allowed in world heritage areas. ^[13] As the National Parks Association of NSW observed, protecting world heritage values must be the primary determinant in evaluating any commercial ventures in world heritage areas, ^[14] and the TCA suggested keeping 'any taint of commercialism' away from world heritage areas. ^[15] The TWWHACC expressed the conflict between raising revenue and protection thus:

^[16]

All three Tasmanian groups also warned against allowing commercial fiefdoms to develop in world heritage areas.

8.11 The Committee acknowledges the validity of many of the points raised in this section. It supports the use of cost recovery measures as a means of raising urgently needed funds that cannot be provided from other sources. It considers that it is reasonable to charge fees to direct beneficiaries and users of world heritage areas, even though they have already contributed through general taxation to the management of those areas. In the Committee's view, it is acceptable that those who benefit most should pay the most. Particular attention should be paid, however, to ensuring that people on low incomes are not excluded and management is not hi-jacked from its primary goal of world heritage protection by revenue raising.

Principles in cost recovery

8.12 The then Commonwealth Department of Tourism listed the criteria that should be met when user charging is introduced: user charging must fall equitably on all users and beneficiaries, be linked to the services provided, be capable of cost-effective implementation, and be introduced with adequate lead times. The linkage of revenue from charges to services is particularly important.

... user charging ... is more likely to be successful if the revenue raised is linked directly to the management of the area. Visitors and operators are more likely to accept increased visitation costs, whether direct through an entry fee or indirect through an operator licence fee, if they are assured that the money will go toward the management of that resource or the development of other WHA areas with tourism potential.

^[17]

8.13 To the principles listed above, the TCA added that charges should be transparent and introduced in consultation with the industry, ^[18] and DEST pointed to the need to include the local community and indigenous people in consultations. ^[19] Participants at the Committee's workshop suggested that there should also be a structured, known review process for existing fee regimes. It is important too that information be provided to those who are being charged about the nature of the charge and the uses to which the revenue raised is put. Commenting about the charge applied to visitors to the GBRMPA, the Council observed that:

^[20]

8.14 The Tourism Council Australia also emphasised the need for the revenue from user charges to be applied to adding value to the tourists' experiences of world heritage areas.

^[21]

This point was supported by the Western Australian Government, which pointed out that:

^[22]

8.15 Concern was also expressed to the Committee by participants at its workshop that the Commonwealth's approach to world heritage funding was to reduce government funds in line with the revenue raised from users. User fees were seen as being legitimately used for presenting world heritage to the public and managing use, but it was strongly felt that they should not be used to minimise government funding of basic management costs. Visitation and government funding should not be tied. The Committee was not made aware of any measures that had been implemented to enable low income groups to access world heritage areas as easily as other groups. Whether this is an area where a community service obligation should be recognised has yet to be established. The Committee considers that the best means by which equity of access to world heritage areas can be assured should be considered in the context of the review of user fees, which is proposed later in this chapter.

8.16 In relation to the danger of revenue raising overshadowing world heritage protection, it is necessary for the Ministerial Councils, boards of management and advisory committees of world heritage areas to monitor closely that this does not occur. In this connection, the Committee does not support a suggestion by Mr Ian Dutton that governments offer incentives to managers for recovering costs, for example, by providing matching allocations. ^[23]

How far is it reasonable and possible to pursue cost recovery?

8.17 The revenue from charging the users and beneficiaries of world heritage areas can, in theory, partly recover costs, fully recover costs, or generate a profit. ^[24] Professor Atherton took the view that, with proper planning and management, tourism 'can be harnessed to provide a sustainable source of funding for the capital expenditure and running costs of each of Australia's World Heritage Sites'. ^[25] Indeed, he saw the use of tourism in this way as essential. He pointed out that:

^[26]

8.18 In Australia at present however, as the Department of Finance pointed out, the revenue raised from users usually recovers only part of the operating costs of parks and recoups 'the value of the benefits of visiting the park'. ^[27] Furthermore, none of the other witnesses saw 'the scenario painted by Professor Atherton as possible, although the TCA conceded that it might be possible with some world heritage areas. ^[28] The Chief Executive Officer of ANCA said:

^[29]

As a tourist operator, Mr Charters agreed: 'the critical point is that user fees can never cover the total cost of managing a World Heritage area'. ^[30]

8.19 DEST confirmed that:

^[31]

8.20 Shark Bay is another world heritage area where anything like full cost recovery will be very difficult. As the Western Australian Government pointed out, the cost of management associated with 'the geographic location, size and dispersal of destinations and facilities in Shark Bay, combined with relatively low visitor numbers, will prevent full cost recovery in the foreseeable future'. ^[32] The Tasmanian Government made a similar point about the Tasmanian Wilderness:

^[33]

8.21 Quite apart from the feasibility of raising revenue from the direct users and beneficiaries of world heritage areas, a number of witnesses to the inquiry argued, like the then Commonwealth Department of Tourism, that 'the broader community remains a major beneficiary of the conservation of protected areas and should therefore contribute to their management'. ^[34] Mr Charters gave an example of this in the case of Fraser Island, when he stated:

^[35]

8.22 Sally Driml and Peter O'Clery, in a paper prepared for the Great Barrier Reef Consultative Committee, spelt out this argument more broadly and in some detail. They argued that most members of current and future generations, both Australian and worldwide, benefit vicariously from the management of the Reef.

[These people] will never visit the Great Barrier Reef. They may experience the beauty of the reef environment through various media, consume seafood or other products, or benefit from the contribution of the system to global environmental health. Australians benefit further to the extent that the economic activity generated by direct use supports employment and regional development which are desirable national goals. In addition, governments earn revenue through taxation and user charges paid by direct users.

The benefit to vicarious users of conservation of the Great Barrier Reef World Heritage Area are in the nature of public goods. Public goods have the qualities that they are not divisible into separate units and it is not possible to exclude individuals from enjoying their benefits. Incentive exists for beneficiaries to behave as 'free riders' and not be prepared to actually pay what they may nominate they are willing to pay in a hypothetical market. An additional limitation is the impossibility of future beneficiaries paying for management actions taken now to maintain the quality of public goods. Conventional markets would therefore under supply public goods. It is usual for governments to act in the face of market failure and fund the supply of public goods.

^[36]

Driml and O'Clery concluded that the majority of funding for the management of the Great Barrier Reef should come from government.

Uses of cost recovered funds

8.23 In its discussion paper on user pays, DEST listed the options for distributing the funds raised from cost recovery measures; they include:

returning all income to the consolidated revenue;
returning all income to the management agency, with or without deducting the equivalent amount from the agency's budget; and
sharing the income between consolidated revenue and the management agency. ^[37]

The approach preferred by DEST and the Department of Finance to dealing with cost recovered funds is, as described in Chapter 7:

to allow their retention by the management agency;
not to include them as part of the State or Commonwealth's base contribution for a world heritage area; but
to revise the base levels of funding in the light of the revenue raised through cost recovery measures.

8.24 The Committee considers that the effect of revising the base levels of funding in the light of the revenue raised through cost recovery measures is a disincentive to building up a revenue base. It is essential that world heritage managers be given incentives to maximise the revenue they raise. This requires that they be allowed to retain the funds they raise without losing any base funding.

8.25 As Table 8.2 shows, the distribution of cost recovered funds varies among management agencies. In some cases, all funds raised from particular world heritage areas are available for use in those areas; this is the case for the Tasmanian world heritage areas, the Naracoorte Caves, and the world heritage areas administered by ANCA and the GBRMPA. The revenue generated by other world heritage areas is retained by the management agency and, in some cases such as Shark Bay and the CERRA, is returned to the district in which it was collected.

8.26 As indicated above, the Commonwealth favours the retention of the funds raised in a particular area for use in that area. However, the Queensland Government stated that it 'does not agree with the proposition that funds generated in a particular World Heritage property should be expended within that area'. It argued that:

^[38]

The Western Australian Department of Conservation and Land Management took an intermediate position with its policy to retain the revenue collected in the district in which it is raised and use it for local management. ^[39]

8.27 The Committee considers that the principle that should guide the spending of revenue raised from world heritage areas is that it should be spent on projects that improve the management of the areas. These projects might include some outside the area if they were seen as necessary to further the preservation and presentation of the area. On this basis, revenue could be spent on roads to assist visitors to reach and appreciate the areas, on purchases of adjoining land, and on tracks in non-world heritage areas to reduce the numbers of visitors to the world heritage areas. The Committee recommends that:

(51) funds raised from a world heritage area be spent on projects to benefit the management of that area, including necessary work outside the area.

Under the terms of the leases between ANCA and the Aboriginal owners of Uluru-Kata Tjuta and Kakadu, 25% of park user and some part of other fees are paid to the owners. In 1993-94, the payments amounted to $541 178 from Kakadu and $738 811 from Uluru. ^[40] During 1995, the Mutitjulu community at Uluru indicated that it believed that a fairer arrangement would be a 50:50 split of the revenue from fees, particularly as the community continues to live in poverty. ^[41]

Table 8.2—Distribution of revenue raised from world heritage areas

World heritage area	Used by:				Comments
World heritage area	World heritage area where collected	District where collected	Parks service	Consolidated revenue	Comments
Tasmanian	100%				Revenue raised is included in the base funding for the area.
Australian Mammal Fossil Sites (Naracoorte only)	100%				Funds are used for capital and operational expenses. No revenue is raised at Riversleigh.
Kakadu/Uluru	100%				Funding by the Commonwealth is reduced by the estimated amounts raised.
Great Barrier Reef: GBRMPA	100%				Revenue from the environment management charge is spent on research, management and research.
Great Barrier Reef: Qld DEH	60%		40%		Funds returned to the area are used for capital and operational expenses.
Willandra Lakes	60%	40%
Fraser Island	X		X		Revenue from all designated recreation areas, of which Fraser Island is one, is shared among all State recreation areas.
Lord Howe Island	X			X	Revenue from the Island Service Levy collected by the Lord Howe Island Board is distributed for the provision of services, including environmental management.
Shark Bay		X			Shark Bay also receives revenue from funds collected elsewhere in WA.
Central Eastern Rainforests - NSW		X	X
Central Eastern Rainforests - Qld		X	X	X
Wet Tropics			100%

Sources: Department of the Environment, Sport and Territories, submission (number 78), pp 8-10; Queensland Government, submission (number 74), p 6; Queensland Department of Environment and Heritage, transcript, 15 November 1995, pp 271, 274.

8.28 None of the other world heritage areas are owned by Aboriginals and/or Torres Strait Islanders and, unless native title is established over these areas, the claims of the local indigenous people to a share of the takings from these areas are less clear than those at Kakadu and Uluru-Kata Tjuta. Nevertheless, the TECCAC, which represents the Aboriginal people of Fraser Island, suggested that 10% of self-generated funds from that world heritage area should be passed on to the local community to assist them to combat their social and economic problems. ^[42] The Committee foresees that this issue will assume more significance in the years ahead, and will require further consideration, either in the context of the granting of native title claims or through negotiation with the local indigenous communities.

Cost recovery options

8.29 The commonest method of generating income is from park entrance or user fees. Other sources of income include:

concessions and licences for tourist operations, such as accommodation, kiosks, boat services, air charters, and tours, and licences for other users in some world heritage areas;
visitor centres and interpretation facilities;
sales of publications and other world heritage related items;
recreational or use facility permits;
camping;
commercial filming;
aircraft landings;
development charges which cover the costs of providing infrastructure;
performance bonds which are paid at the start of a project and used for environmental remediation; and
private sector investment and sponsorship. ^[43]

8.30 A number of more general methods of revenue raising were raised briefly with the Committee; they were seen as sources from which some funds might be diverted for use in world heritage areas. Examples of such methods are bed taxes and departure taxes. However, income derived from these sources may not necessarily bear a close relationship with world heritage areas, and may apply to only a small segment of the market. ^[44] The House of Representatives Standing Committee on Banking, Finance and Public Administration, in its inquiry into the impact of taxation on the tourism industry, also commented on these features of the taxes. ^[45] The Committee was not able to consider these issues in depth but is of the view that are worthy of further detailed study. Support for such revenue raising would be increased if it were linked to expenditure on management and research relating to the protection of world heritage facilities.

8.31 A second suggestion which the Committee considered was that tourist operators might be charged resource rents, for which competitive bidding might be used as proposed in a report by the Australian Bureau of Agricultural and Resource Economics. ^[46] The TCA pointed out two problems with such an approach: meshing it with the existing permit system and the implications for retaining control over resource use. ^[47]

Experience with cost recovery

Table 7.1 shows the revenue raised from cost recovery measures in each world heritage area and Table 8.3 gives the proportion of costs recovered. Both tables indicate great variation from one area to another.

Table 8.3—Rates of cost recovery from certain world heritage areas in 1995

World heritage area	Approximate rate of cost recovery (%)
Uluru-Kata Tjuta	57
Great Barrier Reef	31
Kakadu	30
Tasmanian Wilderness	10

Source: Department of the Environment, Sport and Territories, submission (number 62), pp 23-24.

8.32 While the rate of cost recovery by the Tasmanian Wilderness is relatively low, it compares favourably with that of other States when the comparison is based on the population size of the State. The Tasmanian Government drew the Committee's attention to the fact that:

^[48]

DEST commented that Queensland should 'certainly be looking more closely at the opportunities for raising revenue'. ^[49]

8.33 The park user fee paid at Uluru is $10 per person per week and at Kakadu $15 per person per fortnight, with the fee at Uluru set to rise to $15 in 1997. Until Queensland's 1996 Budget when the fee was increased to $5, visitors to Fraser Island were paying $2.30 per day for their stay on the island. Several charges are levied in the Great Barrier Reef world heritage area: for example, there is a charge for entry to the Aquarium, a fee is payable for permit applications, and tourist operators pass on to the GBRMPA $1 per day per tourist carried on their tours. (A $5 increase in the daily charge levied on tour participants was announced in the 1996-97 Budget, to take effect from 1 January 1997.) Many of these fees are relatively low, prompting Professor Atherton to comment that 'to an extent we are giving [the] experience away'. ^[50]

8.34 With respect to Fraser Island's charge of $2.30 per person per day, Mr Charters opined that operators 'are prepared to pay higher fees for visitor infrastructure that improves the management of the island and the quality of the product that we can offer'. ^[51] Others, such as the Industry Commission's Environmental Commissioner, Mr Tor Hundloe, had the same view. ^[52] Mr Charters believed that the fees could go higher. He said that, 'If we are going down the path of user pays, we should do it seriously and say, "Yes we are seriously going to offer high standard management"'. Mr Charters also commented on the inefficient system of fee collection in place. ^[53]

8.35 ANCA's Chief Executive Officer commented about the entry fees for Uluru and Kakadu that 'it is an extraordinarily cheap event to have access for a week to not only the huge natural area but the actual facilities that interpret it and explain it'.

Since a substantial proportion of the visitors come either from down south here in Australia or from overseas, the proportion that a park use fee of $15 is going to impact on the total holiday package, including bed tax in the Northern Territory, is zero. ...

^[54]

When ANCA raised with the tourist industry the need to increase the park user fee at Uluru, it met with no resistance because the industry:

^[55]

8.36 Surveys of visitors to protected areas overseas have shown that tourists would be willing to pay higher charges, ^[56] as have surveys of visitors to the Tasmanian Wilderness world heritage area. ^[57] This may well be the case in other Australian world heritage areas and should be investigated, as should the impact that increased fees might have on visitation levels and the viability of tourist operations. If it were established that visitors were willing to pay higher fees, serious consideration should be given to implementing fee increases. Another aspect worthy of study is the suggestion that international visitors be charged more than Australian ones, on the grounds that they have not paid taxes to support the park and do not bear the opportunity costs of not using the resources for other purposes. ^[58] Visitors from many overseas countries would also be accustomed to paying substantially for admission to heritage sites. It would also be valuable to consider the relationship between the cost of maintaining world heritage areas and the level at which fees are set.

8.37 From the evidence presented to the Committee about charges at world heritage areas, it is clear that there are different approaches to cost recovery in different jurisdictions. It appears to the Committee that a review of current practices with user charges would be valuable, with attention being paid to the level of charges at all world heritage areas. This view is supported by the conclusion of a study carried out for DEST on the use of economic instruments. The study suggested that the application of user fees in Australian recreational areas be evaluated. ^[59] Two concepts that it might be useful to consider are suggestions made by participants at the Committee's workshop that:

fees should be set at a level that recognises that the tourist industry is profiting from the world heritage resource; and
they should be set as a percentage of the tour operator's tariff rather than a flat charge on all tariffs.

8.38 The TCA complained to the Committee that park use fees at Kakadu had been increased without adequate justification, without sufficient lead time, and without any consultation with the industry. ^[60] These claims were at odds with information provided in ANCA's submission to the inquiry, which indicated that a wide-scale public review of park use fees was carried out in 1992. A new fee schedule was extensively discussed with the Kakadu National Park Tourism Consultative Committee and introduced in May 1995, 21 months after being announced. ^[61] The increase was justified because visitors now have access to both a visitor and a cultural centre. The increase in Uluru's fee was also discussed with the Tourism Consultative Council, which accepted it; it will be introduced with 18 months notice. ^[62]

8.39 The Committee received considerable comment on the GBRMPA's visitor charge, which has been set at $1 per day since 1993, but is to rise by $5 next year. The Department of Finance regarded the $1 charge as 'on the low side' and 'more of a token charge'. ^[63] Mr Charters also thought the charge of a dollar a day was 'not worth collecting for the administration that is required to manage it'. ^[64] The Acting Executive Officer of the GBRMPA recounted the considerable opposition to the charge when it was first introduced. She conceded, however, that 'the market would probably bear something much higher than the $1 that is there at the moment'. Five dollars a day was mentioned as a possible charge, but increasing the charge was seen as presenting 'considerable difficulties'. ^[65] Opposition from the tourist industry would be based on the fact that tourist operators are already contributing to government revenue through diesel fuel excise and payments for permits and environmental impact assessments. ^[66] They are also subject to other charges in some areas. ^[67]

8.40 The Committee considers that where it is feasible to collect fees, they should be more than a token amount. It supports the move in the 1996-97 Budget to increase the environmental management fee by $5 but is concerned by the fact that three of the well-recognised principles of setting fees have been disregarded. For example, only six months lead time has been allowed before the increase is introduced whereas 12-18 months are needed. In addition, the funds raised will be used to partially reduce the level of Commonwealth funding for the GBRMPA rather than to enhance visitor services and, according to the tourist industry, it was not consulted before the increase was announced. ^[68] The Committee views the way in which the increased charge is being introduced and implemented as unfair to tourist operators; and it is likely to undermine the joint approach to management taken so successfully by the GBRMPA in undertakings such as the development of its strategic plan.

8.41 The most serious complaints about fees for using the Great Barrier Reef Marine Park stemmed from tourist operators who saw charges levied on visitors to the Reef as inequitable because other users, such as recreational fisherpeople and private boat owners, were not subject to similar charges. Although it would be feasible to levy these groups through the licensing systems already in place, the difficulty is that levies are already raised from recreational boat users by the Queensland Government and by State and Commonwealth fisheries authorities for fish management. Any increased demands on these groups would be fiercely resisted, and would 'undermine the community's perception' of the Authority. The Authority believed that it would not be worth harming its image for the approximately $390 000 that would be raised from a $10 annual charge on recreational boat users. ^[69]

8.42 Another group of users of the reef region is shipping, with approximately 2 000 ships passing through the area each year. They too could be expected to contribute towards the costs of managing the reef, which includes expenditure on research on, and maintaining a capacity to respond to, oil spills.

8.43 The Committee considers that a joint State/Commonwealth review of the fees applied to users of the reef region should be carried out, with a view to recommendations being made on how a single fee could be applied to all users of the reef that incorporates in an equitable manner charges for those purposes for which each user accesses the reef. The Committee recommends that:

(52) a joint State/Commonwealth review of the fees applied to all users of the Great Barrier Reef Region should be carried out, and recommendations made for a more equitable system of charging users that is tied to the cost of managing their impact on the Reef.

8.44 The Committee noted that the House of Representatives Standing Committee on Banking, Finance and Public Administration called for consultation between the then Commonwealth Department of Tourism and the Council of Tourism Ministers about the charging of tourist operator fees by the GBRMPA and other authorities in the wider region of which the Reef is part. ^[70] Any review would need to take cognisance of the wider context in which the review was being conducted and the outcome of such consultations.

8.45 In addition to a review of the charges applied to users of the Great Barrier Reef world heritage area, the Committee considers that it would be helpful to governments and agencies charged with managing world heritage areas if the experience of applying cost recovery measures in different areas were to be gathered together and best practice identified. Accordingly, the Committee recommends that:

(53) the Department of the Environment, Sport and Territories coordinate a broad-based review of user fees in world heritage areas with a view to recommending general principles for their introduction and administration and how fee levels should be set.

Among other matters, this review should consider:

a) the appropriate balance of government and user contributions to world heritage management;

b) the desirability of linking user fee levels with the costs of managing user impacts;

c) the impact of higher fees on international and domestic tourism; and

d) equity of access to world heritage areas and possible measures whereby equitable access can be assured.

Other sources of funds

Volunteers

8.46 As discussed in Chapters 4 and 6, volunteers can make a very significant contribution to many aspects of environmental protection in Australia, including in reserved areas. Experience with voluntary groups in South Australia, for example, has shown that not only do they undertake manual, educational and cultural work thereby providing free labour, they also fund raise and attract gifts and bequests for the areas with which they are associated. ^[71] Volunteers may also comment on managerial ideas and be able to offer technical expertise and creative flair that managers would otherwise have to purchase. ^[72]

8.47 Little information was provided to the Committee about the value of the contributions made by volunteer groups associated with world heritage areas. A review of funding arrangements for the GBRMPA estimated that 14 000 hours of service by volunteers in the Aquarium represented the equivalent of $350 000 in salaries. ^[73] Encouraging greater involvement of volunteers in world heritage areas is the subject of a recommendation in Chapter 6, because of their potential contribution to world heritage management.

Sponsorship

8.48 The WTMA has extended the use of external forms of assistance to overcome its under funding problems. This has included partnership funding arrangements involving industry, local government and State Government agencies. The WTMA has moved to use the complex tenure arrangements in the Wet Tropics world heritage area as an opportunity rather than as an impediment. It has secured funds for application in the world heritage area, but not necessarily for expenditure by the Authority itself. It has trialed a program for brokering funding applications to Commonwealth and State Government agencies on behalf of land owners and managers within the world heritage area. ^[74]

8.49 In addition, the WTMA has moved to establish a Wet Tropics Rainforest Foundation as a private foundation to raise funds from the corporate sector. In its 1994-95 annual report, the WTMA envisaged that 'a major corporation could sponsor Foundation projects by purchasing land, funding research, supporting community projects or providing resources'. It also foresaw that funds could be raised by the Foundation at the local level by marketing souvenirs using the Foundation's logo in return for a commission on each sale. ^[75] The Committee was strongly advised that this fund raising initiative should be seen as a source of supplementary funds and not as an alternative to government sources: 'expert advise is that if it becomes apparent that Government resources are being withdrawn concurrent with fund raising endeavours, then corporate fundraising will fail'. ^[76] Clearly any fundraising by this means will need to be quarantined from decisions about the allocation of government funds. The Committee will follow the achievements of the Foundation with interest.

8.50 Through sponsorship, funds can be raised for world heritage areas while the sponsors acquire kudos from their association with the area and their acts as good corporate citizens. However, as the Chief Executive Officer of ANCA pointed out when he spoke to the Committee about the new cultural centre at Uluru-Kata Tjuta, 'it is actually quite difficult to get corporate sponsorship ... which would not be vulgar or inappropriate'. ^[77]

8.51 The activities of the WTMA in pursuing sponsorship and external funding show what can be achieved where world heritage areas are being given 'a role in the life of the community' as envisaged under the World Heritage Convention. It also demonstrates the capacity to overcome budget shortfalls when funds from government sources will be limited. It is an approach that has to be handled with sensitivity and understanding of the corporate sector, and requires the agreement of government not to reduce its contributions which would offset or jeopardise the fund raising efforts. Despite these difficulties, the efforts of the WTMA are applauded by the Committee. As long as sponsorship generates funds that are used for the protection, conservation and presentation of world heritage areas, it is entirely commensurate with world heritage principles.

8.52 The Committee recommends that:

(54) world heritage managers be encouraged to seek sympathetic financial sponsorship for appropriate projects.

Private sector operations associated with world heritage areas

8.53 Proponents of a greater role for the private sector in world heritage areas point to the tourist industry in particular as a major source of additional funds and the provider of infrastructure and more extensive services. They warn that it may be the only realistic and economically sensible approach to the ongoing conservation and maintenance of protected areas if government funding is not forthcoming. ^[78] As discussed in Chapter 4, these are clearly issues on which there is no consensus at present. They require further debate and examination, and are the subject of recommendation 29.

Warren Truss
Committee Chair
17 October 1996

Footnotes

[1] Department of the Environment, Sport and Territories, submission (number 62) p 23.

[2] Minister for the Environment, Senator Robert Hill, 'Investing in our natural heritage', Budget statement, 20 August 1996.

[3] Commonwealth Department of Tourism, transcript, 31 August 1995, p 124; Australian Nature Conservation Agency, transcript, 28 August 1995, p 101.

[4] For example, Tourism Council Australia, transcript, 27 November 1995, p 306; Cairns and Far North Environment Centre, submission (number 53), p 6.

[5] Department of Finance, submission (number 9), p 4.

[6] 'Discussion paper on user pays', prepared for the World Heritage Managers Workshop, November 1994, Department of the Environment, Sport and Territories, submission (number 62), attachment I, p 1.

[7] National Trust of Australia (Victoria), submission (number 48), p 15.

[8] Hundloe et al., quoted by Sally Driml, Protection for Profit: Economic and Financial Values of the Great Barrier Reef World Heritage Area and Other Protected Areas, Great Barrier Reef Marine Park Authority, Research Publication No 35, 1994, p 10.

[9] Great Barrier Reef Marine Park Authority, submission (number 59), p 16.

[10] Department of Finance, submission (number 9) p 3.

[11] 'Discussion paper on user pays', pp 2, 4 (see footnote 6, Chapter 8).

[12] The Commonwealth Department of Tourism also made this point (transcript, 31 August 1995, p 123).

[13] Conservation Council of Western Australia, submission (number 71), p 3; Tasmanian Conservation Trust and the Wilderness Society (Tasmania), submission (number 21), p 3.

[14] National Parks Association of NSW, submission (number 57), pp 5-6.

[15] Tourism Council Australia, transcript, 27 November 1995, p 311.

[16] Tasmanian Wilderness World Heritage Area Consultative Committee, submission (number 25), p 4.

[17] Commonwealth Department of Tourism, submission (number 68), p 8. The Department of Finance made the same point (transcript, 28 August 1995, p 109).

[18] Tourism Council Australia, submission (number 73), p 10; transcript, 27 November 1995, p 302.

[19] Department of the Environment, Sport and Territories, submission (number 62), p 24.

[20] Tourism Council Australia, transcript, 27 November 1995, p 307.

[21] Tourism Council Australia, transcript, 27 November 1995, p 309.

[22] Western Australian Government, submission (number 56), p 11.

[23] Mr Ian Dutton, submission (number 1), p 7.

[24] 'Discussion paper on user pays', p 1 (see footnote 6, Chapter 8).

[25] Professor Trevor Atherton, submission (number 49), p 3.

[26] Professor Trevor Atherton, transcript, 15 November 1995, p 198.

[27] Department of Finance, submission (number 9) p 2.

[28] Tourism Council Australia, transcript, 27 November 1995, p 311.

[29] Australian Nature Conservation Agency, transcript, 28 August 1995, p 102.

[30] Mr Tony Charters, transcript, 15 November 1995, p 205.

[31] Department of the Environment, Sport and Territories, submission (number 62), p 24.

[32] Western Australian Government, submission (number 56), p 11.

[33] Tasmanian Government, submission (number 63), p 14.

[34] Commonwealth Department of Tourism, submission (number 68), p 7.

[35] Mr Tony Charters, transcript, 15 November 1995, p 205.

[36] Sally Driml & Peter O'Clery, 'Resources for management of the Great Barrier Reef Marine Park', October 1994; Great Barrier Reef Marine Park Authority, submission (number 59), attachment 7,

pp 5-6.

[37] 'Discussion paper on user pays', p 3 (see footnote 6, Chapter 8).

[38] Queensland Government, submission (number 74), p 6.

[39] Western Australian Government, submission (number 56), p 11.

[40] Australian Nature Conservation Agency, submission (number 37), p 23. An indexed annual rent of $150 000 is also paid to the traditional owners in each park.

[41] Megan Turner, 'A rock of compromise', Courier Mail, Brisbane, 26 October 1995, p 16.

[42] Thoorgine Educational and Culture Centre Aboriginal Corporation, submission (number 11), p 6; transcript, 15 November 1995, p 222.

[43] Department of Finance, submission (number 9) p 3; 'Discussion paper on user pays', p 4 (see footnote 6, Chapter 8); Professor Trevor Atherton, transcript, 15 November 1995, p 194.

[44] Commonwealth Department of Tourism, transcript, 31 August 1995, pp 123-4.

[45] House of Representatives Standing Committee on Banking, Finance and Public Administration, Taxing Relaxing: Report on the Inquiry into the Impact of Australia's Taxation Regime on the Tourism Industry, AGPS, Canberra, March 1995, pp 51-3.

[46] G Green & P Lal, Charging Users of the Great Barrier Reef Marine Park: a Report to the Great Barrier Reef Marine Park Authority, Australian Bureau of Agricultural and Resource Economics, 1991, pp 62-4.

[47] Tourism Council Australia, transcript, 27 November 1995, pp 306-7.

[48] Tasmanian Government, submission (number 63), p 14.

[49] Department of the Environment, Sport and Territories, transcript, 28 August 1995, p 100.

[50] Professor Trevor Atherton, transcript, 15 November 1995, p 193. Lindberg drew attention to a similar trend elsewhere in the world (Kreg Lindberg, Policies for Maximizing Nature Tourism's Ecological and Economic Benefits, International Conservation Financing Project Working Paper, World Resources Institute, 1991, p 31).

[51] Mr Tony Charters, transcript, 15 November 1995, p 205.

[52] Tor Hundloe, 'The private sector and resource management in parks and protected areas', in National Parks: Private Sector's Role, eds T Charters, M Gabriel & S Prasser, USQ Press, Toowoomba, 1996, p 39.

[53] Mr Tony Charters, transcript, 15 November 1995, pp 205-6.

[54] Australian Nature Conservation Agency, transcript, 28 August 1995, p 101.

[55] Julian Barry, '"User pays" at Uluru-Kata Tjuta National Park: current and future directions', paper given to the Best Practice Ecotourism National Conference, Coolangatta, Queensland, July 1996, p 4.

[56] Lindberg, Policies for Maximizing Nature Tourism's Ecological and Economic Benefits, p 21 (see footnote 50, Chapter 8).

[57] 'Walker criticism of permit plan', Mercury, 5 August 1996, p 1.

[58] Lindberg, p 13; J A Dixon & P B Sherman, Economics of Protected Areas: a New Look at Benefits and Costs, Earthscan Publications, London, 1990, p 73.

[59] David James, Using Economic Instruments for Meeting Environmental Objectives: Australia's Experience, Department of the Environment, Sport and Territories, Environmental Economics Research Paper No. 1, June 1993, p. 28.

[60] Tourism Council Australia, submission (number 88), p 2.

[61] Australian Nature Conservation Agency, submission (number 37), appendix F.

[62] Australian Nature Conservation Agency, transcript, 28 August 1995, p 102.

[63] Department of Finance, transcript, 28 August 1995, p 109.

[64] Mr Tony Charters, transcript, 15 November 1995, p 205.

[65] Great Barrier Reef Marine Park Authority, transcript, 27 November 1995, pp 299, 301.

[66] Tourism Council Australia, transcript, 27 November 1995, p 308.

[67] House of Representatives Standing Committee on Banking, Finance and Public Administration, p 54 (see footnote 45, Chapter 8).

[68] Christopher Dore, 'Hill stands firm on reef tourist levy rise', The Australian, 2 September 1996, p 4.

[69] Great Barrier Reef Marine Park Authority, transcript, 27 November 1995, pp 299-300. The inequity of charging only tour operators was also raised by the Alliance for Sustainable Tourism (submission, number 84, p 2).

[70] House of Representatives Standing Committee on Banking, Finance and Public Administration, p 54 (see footnote 45, Chapter 8).

[71] Dene Cordes, 'Community support in SA', Ranger, No. 33, Spring 1995, p 8.

[72] Elery Hamilton-Smith, 'Who benefits from volunteering, Ranger, No. 33, Spring 1995, p 28.

[73] Department of the Environment, Sport and Territories, Review of Funding Arrangements for the Great Barrier Reef Marine Park Authority, January 1995, p 32.

[74] Wet Tropics Management Authority, submission (number 77), p 9.

[75] Wet Tropics Management Authority, 1994-95 Annual Report, p 36.

[76] Wet Tropics Management Authority, submission (number 77), p 9.

[77] Australian Nature Conservation Agency, transcript, 28 August 1995, p 102.

[78] For example, David Morgans, 'Commercialising protected areas: lessons from the USA', in National Parks: Private Sector's Role, eds T Charters, M Gabriel & S Prasser, USQ Press, Toowoomba, 1996, p 101.