https://www.themercury.com.au/news/opin ... ec5caa59beTalking Point: Which wilderness tourism projects pass the jobs test?GRAEME WELLS: Cost-benefit analysis must be applied to tourism projects
It is sometimes said that economists know the price of everything and the value of nothing. If this was ever true, it isn’t now. The practice of eliciting community values for unpriced services such as wilderness has become a well-worked field of economics, and has many applications, including cost-benefit analysis.
While the aphorism isn’t true of economics, it does still apply to the mindset of our politicians and lobbyists. How often do we see spending announcements restricted to just jobs and growth?
Of course, jobs and incomes matter. But for many proposals, this only tells part of the story.
Take Mr Gutwein’s recent announcement of funding for a research contract to support the growth and development in Tasmania’s nature-based tourism industry.
As usual, the scoping requirement for the research is private. But it is clear that the project is limited to the economic benefits of nature-based tourism. In other words, jobs and growth.
This narrow focus seems designed to deliver only one outcome — further development in national parks is in the public interest.
No doubt, many nature-based projects have been a boost for regional Tasmania. The northeastern bike trails are a great example. Projects of this kind have broad community support. But this consultancy looks like cover for further salami slicing of our precious wilderness.
An economy-wide snapshot, or even a regional analysis, does nothing to make a convincing case for specific proposals. As every economist knows, only a comprehensive cost-benefit analysis can provide a basis for support.
The proposal for helicopter access to a tourist facility at Lake Malbena provides a good example. The project itself will create up to three full-time equivalent jobs. It is not clear whether the modelling by the proponents includes indirect effects. But for good measure let’s add another job created by a few extra nights’ accommodation at, for instance, Pumphouse Point. That makes up to four jobs.
Any reasonable cost-benefit analysis would set that small benefit of four jobs against the loss in jobs from fishers and bushwalkers who stay away because of helicopter noise. Let alone the degradation of wilderness values for the larger community. Although the loss of value is not readily priced, it is real and it can be estimated using modern valuation techniques. Would the project survive a transparent and comprehensive cost-benefit analysis? Highly unlikely.
The limited focus on jobs and growth is part of a broader malaise. The public is kept in the dark about expressions of interest, almost until the deal is complete. Are leases granted on competitive terms, or is there an implicit subsidy? Are leases automatically renewed? In national parks, do proponents make any contribution to track maintenance and firefighting? The list goes on.
Then there are the consultancies. Scoping details are rarely made public. The same applies to final reports which are routinely kept from public scrutiny. Unless the analysis is readily available for public analysis, it is far too easy to cherrypick the best bits from the executive summary. That’s a temptation policy makers, advisers and lobbyists rarely resist.
From an economist’s perspective, policy development could be so much more productive.
There are two key elements. The first is transparency at all stages of policy development. The second is to take a broader perspective than the usual mantra of jobs and growth. Comprehensive cost-benefit analysis is essential for a broader perspective.
Good policy is unlikely to emerge when proponents, policy makers and nature lovers engage in an uninformed shouting match.
Graeme Wells is principal of Wells Economic Analysis, and a former associate professor at the University of Tasmania.
That looks like a pad.