Can Queensland’s Superyacht Strategy be Saved from Sinking?

Written by Lucinda Kittel 11/09/2020

The proposal of the Government fostering emerging and priority sectors with global growth potential has been aimed to include the superyacht industry, in order of diversifying Queensland’s economy and creating jobs. The 1980’s is when the construction of superyachts took off, as recent advances in design and technology have played a pivotal role in the development of the 1980’s superyacht .

Queensland’s share of the global superyacht is envisioned to increase by 10 per cent by the year of 2023. Alongside this staggering vision, is the fact that by the year of 2023 Queensland would be recognised as the key superyacht hub in the Asia Pacific region. Their aim in doing so comes down to the conscious and decisive decision to leverage the natural competitive advantages Queensland presents, while putting their trust in the workforce and marine infrastructure to support the sectors growth.

Using this swot analysis, there is no need to specify all the factors. Instead what has been included in this analysis is those which are of prime importance and may determine the future of the superyacht industry. This analysis theory involves four distinct parts, that of which are Strengths, weaknesses, opportunities, and threats. Through the use of this approach, it can be evidently determined what the current objectives are, the complications surrounding the existing policy and the opportunities that would contribute to making industry appropriate recommendations that aim to improve and change the existing policies that match back up with the objectives and the industries initial vision of Queensland being recognised as the key superyacht hub In the Asia Pacific region.

SMART Goal Framework

According to the Victorian State Government, using a SMART Goal Framework can help define the strategies and objectives to demonstrate whether The Queensland Government have the right actions implemented In order of achieving a successful outcome with regards to the current policy setting provided.

The Need for Appropriate Policy to Realise Potential – Are strategies clearly communicated?

The chief executive of the Australian International Marine Export Group, Superyacht Australia, and Australian Commercial marine Group states that:

“locally, many of the current policy settings provide unintentional impediments to the growth of the superyacht sector” – MaryAnne Edwards

The superyacht strategy has 4 distinct priority areas. The top priority is identified as having a supportive, clear, and well- communicated policy that is inclusive of six definitive actions, each represented by responsible stakeholders. These actions are required in order to realise the potential of the sector.

Mentioned in the Coastal Trading Amendment bill 2017 If Australia does not address the impact of appropriate policy settings, much of the growth potential will be lost.

“the superyacht sector is unique, and the growth potential is significant” – Industry stakeholder

With the involvement of industry stakeholders and the Government, it is said that” The Australian economy could grow by 70% to 2021, delivering $1.2 billion more in GDP and 8,100 more jobs over the existing/business as usual policy setting”. However, these key industry stakeholders are at a standstill due to this one policy that needs to change.

What is the key policy that needs to change?

Key industry stakeholders have identified a critical and significant issue holding back the sector. The critical policy following this superyacht strategy and legislative constraints includes the ability to charter foreign vessel or lack thereof due to policies on imported vessels and the payment of 10% GST on the capital value of the foreign vessel if it is to charter the Australian Waters. This is just one of various other important policies, planning and infrastructure issues that are needing to be addressed in order to support an environment that is conducive to sector growth.

SMART Goals Embedded Within the Policy

Specific:

· create a policy change that removes the 10% GST on vessel value

Measurable:

· Administer the increase in GST from this policy change as revenue will be generated through increased superyacht industry activity. Approximately $118.3 million in GST revenue to be generated by the superyacht industry in 2021.

Achievable:

· Regular, reliable industry wide data and statistics to plan and manage growth of the sector.

· A consolidated and professional suite of collateral that is supported by a detailed strategy and appropriate resources. – requires coordination and collaboration with Tourism Australia.

· Industry needs to work collaboratively with all levels of government to address the issues holding the sector back.

· A consolidated industry wide development strategy – set forward a vision of the sector and include detailed implementation plans.

Relevant:

· It had been mentioned on several occasions that within Queensland, there is significant growth potential within the superyacht industry, due to the states supply of skilled labour, ideal cruising conditions and supportive government.

· Potential for the industry to contribute an additional amount to GDP by 2021, leading to an increase of 8,100 in local jobs (Superyacht Australia, 2020).

· With no change to the current policy the Australian economy will only grow by approximately 13% to 2021, whereas with an appropriate policy setting, there is potential that the Australian economy could grow by 70% to 2021.

Time Bound:

· With the involvement of industry stakeholders, the policy was expected to change as of 2018, with expected changes to happen within 2021.

Benefits of a changed policy setting outweigh all else involved.

There are far greater benefits in implementing the new policy setting than there are benefits to leaving the current policy setting as is. Values shown in figure 11 and 12 reflect the estimated additional contribution of the superyacht industry in anticipated for 2021. The baseline scenario argues the existing policy if retained. Stating that without policy change the superyacht sector is projected to contribute an additional $254.4 million to Australia GDP in 2021 and support over 1,800 FTE jobs with them paying more than $160 million in household incomes. However, greater benefit would be drawn from changing the existing policy so that GDP could reach an approximate amount of $1.12 billion higher in 2021 than it would with the existing policy. That amount of GDP generated with the policy change would equate to a total contribution of the superyacht industry to Australian GDP of $3.34 billion in 2021. In comparison with the 1,800 jobs that were projected to be supported in 2021 with the existing policy, it is evident that the new policy would be considered a greater benefit to the economy, with more than 8,100 additional FTE jobs that would be supported in the Australian Economy. Thus, enabling households to gain more than $700 million in wages and salaries.

Unlock the Jobs and Revenue

Overall, the change in policy settings provides great potential within the sector of employment. It had been mentioned by Advance Cairns Priorities 2020/21, 2016 that “it will provide an influx of jobs and 1.64 billion in revenue to the Australian economy by 2021.”

Recommended Changes to the Policy are Important for the future of the superyacht sector

According to Authority of the House of Representatives, 2018 many countries now have multi-year policies and plans in place to develop the tourism sector and to give direction and focus to government policy at national and sub-national level. With policy makers and industry stakeholders working together in an effective manner, could help implement a policy change within the superyacht sector. The current issue regarding the current policy, is the fact that when a superyacht wishes to visit, it is to be imported with a cost of 10% of its total cost applied to it. Therefore, decreasing the chance of any yacht to visit Australia if that be the cost of them having to charter, and causing Australia to miss out on the opportunity to enhance the business of sailing within the country. Therefore, the best recommendation for change with the current policy setting is to remove the impost, allowing Australia to have exposure to the superyacht market, which will then bring important trade and tourism benefits to both rural and regional areas in Far North Queensland. It should be that current foreign superyachts come in under a control permit, as a part of new policy and not have to pay any taxes. Thus, permitting charter will allow the government to receive an annuity in GST .

References

Advance Cairns Priorities 2020/21, 2016. SUPER YACHT CHARTERING, Cairns: Advance Cairns.

Authority of the House of Representatives, 2018. HOUSE OF REPRESENTATIVES BILLS - coastal trading (revitalising Australian Shipping) Amendment Bill 2017 second reading spech, s.l.: Commonwealth of Australia.

Goranczewski Bolesław & Puciato Daniel, 2010. SWOT ANALYSIS IN THE FORMULATION OF TOURISM DEVELOPMENT, Opole: Faculty of Economics & Institute of Tourism and Leisure.

Hughes George, 2006. The self, signification and the superyacht. The Journal of the Leisure Studies Association, 12(4), pp. 253-265.

Queensland Government, 2018. Queensland Superyacht Startegy, s.l.: Queensland Governement.

Superyacht Australia, 2020. New Queensland superyacht strategy a boon for economy and local businesses, says superyacht industry body. [Online] Available at: https://www.superyacht-australia.com/news/new-queensland-superyacht-strategy-boon-economy-local-businesses-says-superyacht-industry-body/ [Accessed 2020].

Superyacht Australia, A. &. A. M. E., 2016. ECONOMIC IMPACT OF THE SUPERYACHT SECTOR ON THE AUSTRALIAN ECONOMY - Coastal Trading (Revitalising Australian Shipping) Amendment Bill, , s.l.: s.n.

Victoria State Government, 2005. SMART Goal Framework, s.l.: Victoria State Government.