The purpose of this research report is to assess the current public debate on Japanese direct foreign investment in Australia's tourism industry. As an alternative to the largely partisan discussion that has occurred in the last eighteen months, this report attempts to moderate the emotional context by placing the key factors into a more objective framework.
A survey of the principal Japanese investors and operators in the Queensland tourism industry was initially proposed to obtain quantitative data, however after pre-testing the questionnaire it was concluded that the collection of (predominantly confidential) information at an un-official level was not possible.
Alternatively, an extensive dossier of secondary information was collected and used to assess the public motives of the primary interest groups involved in the debate.
The substantive conclusions reached from analysis of this information are as follows;
The pre-eminent position of Japan as the (financially) wealthiest country in the world, and the consequential restructuring of its economy has resulted in several key opportunities for Australia, namely as a destination for direct investment flows, and tourism from Japan.
Australia's tourism industry has, and continues to benefit from both of these opportunities. As a consequence, the industry has seen a huge growth (from an initial, small base) in both the numbers of Japanese tourists visiting Australia, and the number and scale of Japanese direct investments in tourism projects. Such a large rapid and concentrated increase in this Japanese activity in Australia has not only had a significant economic impact, but has also given rise to a diverse array of reactions from the government, community, tourism industry and Japanese investors themselves.
Economically, Australia is not in a position to choose whether or not to encourage direct foreign investment, and should therefore not be asking if foreign investment benefits the country, but whether Australia is maximising the benefits from foreign investment.
Policy initiatives have been taken by the Federal and Queensland governments to confirm an official, welcoming attitude towards foreign investment, while introducing administrative provisions to enable authorities to examine proposals for congruence with political and social requirements (such as to prevent speculative and absentee investment in residential real estate). These actions are considered not only responsible in terms of protecting the interests of Australians, but also the interests of Japanese investors in the longer term, since adverse public opinion, if left unchecked, could eventually result in severe foreign investment restrictions.
An authoritative data base (such as Queensland's Foreign Owned Land Register) is urgently needed to which economic impact techniques can be applied to determine more precisely, the economic benefits and costs of Japanese direct foreign investment in Australia's tourism industry.
The credibility of the tourism industry's position in communicating its stance on the issue is often negated by the condescending tone of articles used and the perceived "financial interest" of the authors (such as real estate agents).
The Foreign Investment Review Board is neglecting its commission (and opportunity) to foster an awareness and understanding of the Government's foreign investment policy in the community at large.
Most astute Japanese investors would understand that Australian partners who have experience in the tourism industry offer the advantages of both market and community knowledge of the Australian operating environment and conditions (but only if Australians communicate this to them).
Australians are not prepared to accept Japanese foreign investment unconditionally. Japanese companies with investments and/or operations in the tourism industry should act assertively to show their intentions of becoming responsible corporate citizens in Australia.
A pragmatic approach by both the Japanese and Australians to Japanese direct foreign investment in Australia's tourism industry is needed - with Australians communicating with, and educating Japanese investors to address the challenge of developing innovative and authentic tourism projects (and concurrently overcoming concerns of the local community) that will enable people from all countries to share in Australia's much envied lifestyle.