Access to Heritage
Table of Contents

7. User charges: arguments of detail

7.1 The arguments of previous chapters relate mainly to compulsory entry fees, as distinct from charges for `value-added' services, special exhibitions and so on. Many submissions opposed entry fees but of these most accepted or advocated charges for the other things. The chief question that this raises is where the boundary between them should lie.

7.2 Some submissions opposed user charges on principle but stated fallback positions (`...but if they are used they should be designed to avoid the following undesirable effects...') These arguments are also reviewed in this chapter.

`Basic access' versus `value-added services' in libraries, museums and galleries

7.3 Many submissions argued for free `basic access' (`core services') but accepted user charges for `value-added services.' This was non-controversial among all who spoke of it; but it raises the immediate question: which services should be considered `basic' and which should be considered `value-added'? The distinction is not necessarily obvious.

7.4 This was most clear in the case of libraries and archives. The Australian Library and Information Association's policy affirming the public's right to free `core services' refrains from trying to define exactly what these are. [1] The Australian Council of Libraries and Information Services comments, `...what is classed as basic and what is classed as valued-added will vary from service to service.' [2]

`There are some basic types of services, such as the public access to the public record, which are quite easy to see as core services. Defining services beyond that, such as reproduction and exhibitions and whether to charge for that kind of thing, is something that each institution has looked at within their particular client group.' (K Dan, Australian Society of Archivists, evidence 6 August 1997 p212)

7.5 For example, different users of a library may need different amounts of reference help to get the information they need: what one manager might call `basic' reference help (that which is necessary to give the reader the information) another might call extra advice (because it takes an unusually long time). The fact that in this area an arbitrary cutoff to `basic' service may be necessary is shown by the Australian Archives' policy that `a maximum limit of an hour is devoted by staff [free of charge] to each inquiry'. [3] The National Film and Sound Archives charges a research and service fee of $50 per hour, commenting, `[fees] can provide a means of diverting frivolous, vexatious or unduly time-consuming requests'. [4] An analogous problem for museums is how to treat requests to view items not on display. There has to be a limit to the depth of free service that a public institution can provide. [5]

7.6 Another area that some seem to call `core' and others `value-added' (that is, charged for), is country tours and outreach programs. Other than these examples the lists of core services versus value-added services that witnesses offered seem reasonably consistent and unsurprising: the core services involving access to facilities and reference help (libraries) and access to the permanent collection (museums and galleries); the value-added services involving things like copies, publications, special exhibitions and `extra' consultancy services. [6] When we say that the boundary between them is not necessarily obvious, we mean simply that distinguishing between them is a matter of value judgment about the desirable/affordable extent of free access, not a matter of logic or of impartial observation of the features of different services.

Senator Tierney: `You seem to be heading towards full cost recovery in areas... where they are not central to the business of government or its resources. Could you just give some examples of areas that are considered not central to the business of government?'
Mr Holmes: `...I think the definition of what is central and what is not central is shifting...it is a matter of judgment and political position at any point in time.' (A Holmes, SA Dept of Environment & Natural Resources, evidence 2 July 1997 p137)

`Basic access' versus `value-added services' in national parks

7.7 A similar distinction between basic access and value-added services was generally accepted in submissions on national parks, and it was generally accepted (even by those who opposed entry fees) that charges for value-added services are appropriate. Value-added services were said to be things like `roads, toilets, camping facilities, information centres, rubbish removal'. [7]

`It is my experience that visitors expect to pay a basic camping fee to cover site management costs such as water supply and rubbish removal, but they do not expect to pay an entry fee as well.' (J Lennon, submission 13 p111)

7.8 As with museums and galleries, the boundary between `core/basic' and `value-added' is not necessarily clear:

`There is the issue of what do you define as a community service obligation, and what do you define as something that an individual should pay for. There has been a view, for example, that bush camping, rough camping, should be something that is free, whereas more service delivery camping should be cost recovery.' (A Holmes, SA Dept of Environment & Natural Resources, evidence 2 July 1997 p137)

7.9 The inclusion of `roads' in a suggested list of `value-added' services is another example of this problem. For most people in most national parks, free access without a road is as little use as free access to the library without a catalogue. What looks like a `value-added' charge on vehicles for road maintenance to one person may look suspiciously like an entry fee to another.

Is new computer technology `basic' or `value-added'?

7.10 Several submissions spoke of the expense of digitising museum collections and otherwise improving access to information through computer technology; and the question of who should be charged for this type of access, and on what basis. Should electronic access be considered a basic service or a value-added service? Should it be free as a principle of equity, just as personal access to the institution is (if it is)? Should the setup costs be charged to users over some period, or regarded as a capital expense to be absorbed into government-funded fixed costs?

`[Electronic] access to [museum] collection information is a complex and highly contentious issue... Some individuals express the view that government funded museums should make data freely available because government paid for acquisition of the objects and their associated data. The reality is that governments rarely fund collection and database development and maintenance adequately... It seems clear that in future the users of the information will need to accept some responsibility for paying for quality improvement....' (Australian Museum, submission 30 p245)

7.11 Whether the old free service remains available beside the new `value-added service is an important point:

Senator Hogg: `But in the hiatus period in which we are getting the conversion of old records onto computer disk or whatever it might be, does that warrant the government necessarily absorbing the cost, or should the government somehow retrieve the cost through user-pays charges? Is there a fundamental right that, regardless, free access to that information should be available to the community, and it just happens to be a quirk of the time that we live in that we are undergoing this transition?'
Ms Dan: `I would say that there is a fundamental right. The question is whether that right can be satisfied through provision of the service as it is given now - for example, through people visiting the Archives or getting in touch the Archives and having access to the documents. That fundamental right would remain. What we are doing with computerising or digitising records in the hiatus period is adding value and making them more accessible, so I would see that there is a legitimate right to charge for that type of service.' (K Dan, Australian Society of Archivists, evidence 6 August 1997 p212)

7.12 Equity issues may intervene, particularly for country people who are less able to visit city institutions:

`Free delivery of the contents of collection materials to remote areas via the Internet and other means is becoming an issue for collecting organisations. In fairness to remote Australians, should these services be freely available, as national and state libraries are to city dwellers? “User pays” has become a way of avoiding the problem of increasing demand for these services...' (National Film and Sound Archive, submission 40 p341)

7.13 A similar equity issue arises in deciding whether `outreach' programs should be regarded as core or value-added. For example, the Queensland Museum provides free admission in Brisbane but charges entry fees at its country branches, and acknowledges the equity concerns that this raises. [8]

Risk of `user pays by stealth' with new technology

7.14 What should be called `core' and what should be called `value-added' depends on society's norms of the day. The Committee does not accept that today's core services should be seen as fixed for evermore, and all improvements or novelties henceforth may be called `value-added' and charged for. This would be a sure recipe for `user pays by stealth' as new technology replaces old, as old `core' services disappear and new `value-added' services become the norm. Just as the presence of a photocopier in the library should be seen as a core service today, so the presence of computers will be in future. It may be acceptable to charge for faster access by computer, as long as the printed book remains freely available on the shelf; it is not acceptable to continue to charge for access by computer after that has become the norm and the printed book is no longer available. As well, the development costs of introducing computer technology into libraries, archives and museums should not be charged as a supplement on the marginal cost prices paid by today's direct users: it should be seen as an investment in the next generation of core service, and should be budget-funded like any other capital expense. As the information economy grows, it is ever more important that all Australians should have free and equal access to the information that is held in public institutions.

`In democratic societies the power derived from information must not be the preserve of a few.' (Australian Archives, submission 33 p261)

Principles for charging for value-added services

7.15 As to how to charge for value-added services, the National Library of Australia proposes three categories (with provision for subsidy or differential pricing for social justice or other policy reasons):
1. services that mix core and value-added elements: to be charged at marginal cost recovery with a rebate representing the core element;
2. value-added services for private purposes: marginal cost recovery, with consideration to making a surcharge to finance development costs `where ongoing investment is required to develop a service to provide improved benefits to users';
3. value-added services for commercial purposes: full cost recovery plus a target profit. [9]

7.16 The Australian Museum has similar policies: `Government departments... are usually charged [for data] on the basis of avoidable cost... commercial requests for data are generally charged at a combined avoidable cost plus service fee.' [10]

7.17 The National Film and Sound Archive (NFSA) stresses the need for flexibility: `Publicly funded organisations need to retain the flexibility to deal with individual clients, to be able to make deals of beneficial interest to both parties. For example, in exchange for waiving access fees, copies of certain programs and/or research materials may be donated to NFSA for future public access... [we need] the discretion to charge commercial clients, while being able to respond to the special needs of pensioners, researchers and students.' [11]

7.18 In submissions on national parks, if it was not explicit it was usually implicit that charges for tourist services should be based on marginal cost recovery:

`Cost recovery from the tourism industry, as an easily targeted user group, should not be used to offset management costs that would have to be met regardless of tourism use of these public assets.' (Department of Industry, Science & Tourism, submission 26 p220)

`We do not accept that the present generation of walkers should be expected to pay for the full cost of rehabilitating and maintaining the tracks and areas they frequent. Indeed, the cost of ongoing management is something which should be borne principally by the State Government... on behalf of the interests of the wider community.' (Tasmanian Conservation Trust, submission 17 p154)

7.19 But note that this principle may conceal uncertainties about what the relevant marginal cost is - as when we try to define the exact scope of `rehabilitation', `maintenance' and `ongoing management.' Similarly in the library: perhaps supplying the photocopier with paper is a marginal cost, but what about supplying the photocopier? Should the charge for copying have a loading to allow for periodic replacement of the photocopier, or should the presence of the photocopier be regarded as a core service which (the Committee would maintain) should be budget-funded as a fixed cost?

7.20 The Committee discussed this problem from paragraph 5.22, and suggested that, for the purpose of marginal cost pricing, the relevant marginal cost should be defined as the avoidable cost of any activity which, if it cannot cover costs at marginal cost pricing (not enough people are willing to pay), management would discontinue without hesitation. If management does hesitate, it is a sure sign that the activity is regarded as `core' (that is, conveying community/non-use benefits) to some degree.

7.21 This scheme, by definition, aligns fixed and marginal costs with core and value added services. In this form, what is a relevant marginal cost depends entirely on the value judgment about where the line between core and value-added should be drawn. [12] Of course in practice there will be a continuum on which managements accept less than marginal cost recovery from value-added services insofar as they perceive some core element in them. [13]

7.22 Note that by this definition `value-added' services must be optional: `core' services may include not only things visitors want but also any compulsory incidentals. For example, take `rubbish removal' in national parks. This was sometimes proposed as a value-added service, [14] probably because it is an obvious variable cost depending on the number of visitors; possibly also because of an underlying view that the main business of the park is nature conservation, and catering for visitors is somehow peripheral. But these are not the criteria we propose. Our questions are simply: Is it practical to charge for it separately? and If not enough people are willing to pay for it separately, would management do it anyway? If management would do it anyway it is by definition a core service, and a compulsory charge on visitors to cover its costs is an entry fee.

Marginal cost pricing of value-added services

7.23 The Committee accepts the distinction between core and value-added services, and accepts that it is reasonable to charge for value-added services. We comment:

7.24 1. In line with the marginal cost pricing principle (see paragraph 5.18) charges for value-added services for personal non-commercial use should generally not go beyond marginal cost recovery. The fixed costs of maintaining the institution and its core services for future generations must be acknowledged as a public responsibility. Some provisos are discussed below.

7.25 2. We have some concern about the concept of charging users a supplement to finance development costs of improved services (see the second dotpoint in the National Library's policy quoted in paragraph 7.15). This goes beyond the principle of marginal cost pricing. The underlying question is whether today's core services should be seen as fixed forevermore, and all improvements or novelties henceforth are thrown in the `value-added' basket; or whether providing new or better services as time goes by, having regard to the technological possibilities and society's norms, should be seen as a core function. The question arises most pointedly in respect of financing computerised access. As noted in paragraph 7.14, the Committee does not accept that today's core services should be regarded as fixed for evermore. The proper scope of `core services' depends on the state of technology and society's norm's of the day.

7.26 3. In cases where elastic demand suggests that basic access should be free (as discussed in chapter 5), the validity of marginal cost pricing for value-added services depends on retaining free basic access as a real alternative. Where a visitor has a real choice between viewing a document free or photocopying it at cost, if the visitor forgoes the photocopy there is no net loss of welfare, since the visitor still has the money that they might have spent on the copy, and still has the benefit of viewing the document - which is the reason for the library's existence as a publicly subsidised facility. By contrast, if a supposedly marginal charge is actually unavoidable, so that it behaves like an entry fee (as in the example of roads in national parks mentioned in paragraph 7.9), and visitors turn away at the entrance, then there is a deadweight loss of community welfare not compensated by economy of operating costs, and all the arguments discussed from paragraph 5.15 come into play.

Marginal cost pricing versus surcharge to subsidise fixed costs

7.27 Many submissions suggested or implied that income from value-added activities could be used to subsidise the fixed costs of core activities (such as maintaining the museum collection, or conservation management in national parks). The implication is that if people are willing to pay big bucks to see a special exhibition, that is all to the good if it can help support the permanent collection.

7.28 This is not consistent with the principle of marginal cost recovery in pricing value-added services (since, at marginal cost pricing, the marginal activity earns no surplus). The alternative view is that the special exhibition should aim simply to recover costs:

`We have not presented those exhibitions to generate a surplus; our genuine desire has been to cover costs. Obviously, if there is a surplus, the public seems very happy for that money to be spent on acquisitions, which is what happens.' (Dr C Turner, Queensland Art Gallery, evidence 21 May 1997 p121)

7.29 There is a possible equity issue here. Do poorer people not have the right to see the special exhibition too? The Committee does not have the answer to this question. It brings us back to a fundamental point in chapter 3: we live in a society where poorer people do not have as many things as better-off people. Any cross-subsidy scheme is a compromise in which freer access to the subsidised part is won at the expense of limiting access (relatively speaking) to the fee-paying part. The assumption is that the gains outweigh the losses.

7.30 An analogy in national parks is whether charges at a more popular national park (or one with fewer conservation management needs) should subsidise management of a more remote or fragile one. Better management at the more remote park is funded at the expense of limiting access - by price - to the more popular one. There were differing opinions on whether this is `fair' - most witnesses seemed to accept cross-subsidy providing revenue is retained for the purposes of the organisation.

`For example, there are national parks in western New South Wales with feral goat problems. The parks are being degraded by those goats and they need some serious management resources to deal with that problem. But if you tried to cover the cost by levying a user charge, you would be charging $10,000 to get through the gate. It is not feasible. Heavily used parks are going to provide much more of an opportunity for that kind of funding to be raised to contribute.' (M Horstman, Australian Conservation Foundation, evidence 15 September 1997 p465)

7.31 A risk of relying on user charges to cross-subsidise core activities is that it may bias managers to maximise money-making developments at the expense of their focus on core conservation goals:

`There is a very dangerous tendency here in Victoria - because, as far as I am concerned, they have misunderstood the concept of user pays - to try to move the national park service to self-funding over time or by stealth... The idea, as we see at Wilsons Promontory, is that they may be trying to use revenue from lodges, they are developing lodges in the park in order to use that revenue to fund the national park...' (F Grey, evidence 15 September 1997 p427)

7.32 The analogy in museums and galleries is the risk, which several submissions referred to, of developing a `blockbuster syndrome' in which the institution becomes forced to devote excessive effort to staging special exhibitions at the expense of the permanent collection. See paragraph 7.63ff.

Marginal cost pricing versus surcharge for investment or profit

7.33 To extend the argument (mostly put in relation to national parks), in popular tourist areas where elasticity of demand is low, is it reasonable to load charges to include a component for investment in long term improvements, or to include a component for profit (an economic rent)? [15] If so, should commercial tourist operators be treated differently from private visitors? [16]

7.34 In the case of computerisation in libraries, the Committee had concerns about charging a component for investment, mainly because of the risk of `user pays' by stealth as new charging services replace old free ones (see paragraph 7.14). In the case of national parks, the idea of contribution to improved facilities seems uncontroversial, [17] providing -

`In terms of fairness the revenue should be allocated to `enhance' the facility of natural area and not be seen as a `cash cow' with the user charges going into consolidated revenue.' (Tourism Council Australia, submission 57 p598)

7.35 Allowing a component for profit could in effect mean charging what the market will bear - and this could mean much higher charges in popular tourist areas where elasticity of demand is low. The Committee does not favour this, even for commercial operators, mainly because higher ambitions for cost recovery would greatly increase the risk of bias towards management for tourism at the expense of fundamental conservation goals. See paragraph 7.53ff.

`User pays can fund better management'

7.36 The most prominent practical argument put in favour of user charges was that the revenue can finance better management - better conservation management and better visitor services. In the case of natural areas, for example, Mr Donovan argued that tourist operators should see this as the normal business expense of making provision for maintenance to conserve their capital resource:

`...tourists can be made to provide substantial funds directly and indirectly towards the sustainability of the natural environment from which the tourism industry draws revenue... It is not a question of whether there should be “user pays” but rather, when and how much? The quick answer is - as soon as possible and at a level which provides substantial funds to ameliorate deterioration on a permanent basis.' (M Donovan, submission 6 p43-4)

7.37 This comment is implicitly focused on popular national parks with large tourist businesses and low elasticity of demand. It may not be so applicable to more `ordinary' national parks (that is, ordinary in their attractions for public recreation) with higher elasticity of demand. [18] As well, it does not consider the equity dimension; but this is probably less relevant for higher profile national parks anyway (in light of the argument that `poorer people probably can't afford to travel to Kakadu').

7.38 The argument was sometimes put in a more positive light, as above - user pays can fund improved management - and sometimes as a fallback position - user pays can at least compensate for the reduced central government support in recent years which many submissions observed:

`For a number of years, the level of Commonwealth contribution to [its] national park running costs has been decreasing. The introduction of park fees, and subsequent increases in fees, have been integral in making up the difference.' (Environment Australia, submission 46 p394)

`Downturns in traditional revenue sources have meant that museums have to be concerned to protect their future revenue raising opportunities by placing as little as possible in the “free of charge” public domain.' (Australian Museum, submission 30 p239)

...versus `user pays allows governments to reduce central funding'

7.39 In answer many opponents of user charges claimed that in fact user charges are more often the thin end of the wedge - the means by which governments wind back central funding:

`The reality, of course, is that any funds at all raised by any government instrumentality offset funds which would otherwise have been provided through the normal wider (tax based) funding process. Little net benefit is ever gained.' (D Chinner, submission 1 p5)

`Experience in the USA has shown that when `user pays' fees were introduced - “Parks and the public came out the losers. That year, the increased entry fees generated some $50 million, which was earmarked for research and infrastructure. The next year Congress reduced the parks' budget by - surprise - $50million” [Phillips J, `Can We Save our National Parks', Sunset, June 1996 pp74-80]' (National Parks Association of Queensland, submission 25 p208)

7.40 Whether the initiative comes from boards of management or from higher in government may be a matter of political dispute, but scarcely affects the result:

Senator Lees: `We have heard in evidence and have a number of submissions that highlight the case in the natural environment where a user-pays charge comes in and then the base funding level is dropped to make up... Is that happening in museums and art galleries as well?...'
Mr Marginson: `Generally the budgets have been held at steady fixed dollars over a long period of time... I do not think many governments normally specifically say, `You will introduce a charge.' It becomes a consequence of budget deliberations by the boards.' (G Marginson, National Campaign for the Arts Australia Ltd, evidence 6 August 1997 p295)

`Our politicians and bureaucrats gave no real choice to an institution [Australian Museum, Sydney] that for 164 years has been dedicated to the discovery, preservation and free communication of knowledge about our natural environment... The [New South Wales] Government claimed it, too, was opposed to fees and distanced itself from the decision of the trustees [to introduce general entry fees]. But it had simply cut funds, ensuring that the museum would go under if the trustees had not either introduced entrance fees or engaged in wholesale sackings.' (Dr P Pockley, Sun-Herald 27 October 1991)

7.41 It is a commonplace that people become cynical when they suspect that a new user charge is simply another form of taxation:

`Whilst it is true that the community is adapting quite quickly to the idea of legitimate applications of the user pays principle, there is enough cynicism about to ensure a hostile backlash whenever the consumer suspects that he or she is the victim of a con job.' (Mackay Research, The Mackay Report: Keynote: User Pays, October 1992 p32)

Can `hypothecation' of funds reduce this risk?

7.42 Many witnesses, who accepted user charges (sometimes reluctantly) as a way of funding/improving core activities, tried to avoid the thin end of the wedge by stressing that the revenue should be retained for local improvements and not simply siphoned off to the government treasury (`hypothecation').

`...there is a risk that the implementation of user pays practices may become a means for governments to send institutions on a downward spiral of further subsidy reduction based on the income raising potential of the institution.... The possibility suggests the need for incentive and income retention agreements between museums and government.' (National Museum of Australia, submission 42 p359)

Senator Gibbs: `If user-pays system is implemented and then you recoup a certain amount of money from those people who do go through the gate, do governments then take away that extra money rather than it being a supplement to what the government is already paying. That is the danger...'
Mr Donovan: `I am not in favour of the money going back into the government purse because I have never seen it ever given back again.' (M Donovan, evidence 16 September 1997 p503)

7.43 A alternative and minority view was that user charges income should be returned to the central government treasury specifically to break the nexus between fees and central funding:

`Protected areas should be funded from general revenue on a basis which is adequate for the purpose and not in any way related to the fees collected.' (Peak Environmental Enterprises and Conservation Centre of Australia, submission 15 p137)

7.44 But most submissions that commented on this matter felt strongly that user charges income should be retained locally - not least because it creates a more positive attitude among visitors if they can see what their payments are used for. Environment Australia noted that the World Tourism Organisation and UNESCO have signed an accord promising co-operation to `make sure fees collected from visitors and some of the income generated from tourism goes directly to the protection and maintenance of historic monuments, as well as conservation of the environment.' [19]

Senator Payne: `It would be, I think, reasonable to observe that funding and budgets - matters that concern governments regularly - are changing. They have been changing over 10 to 15 years in terms of the user-pays principle.... Do you not think that many Australians would find it reasonable to pay a reasonable fee or a moderate fee to assist in that process of preserving our environment and playing a role in that in some small way themselves?'
Mr de Horne: `I agree... The point is that any fees have to be seen by them to benefit national parks and not just something off the budget...' (J de Horne, National Parks Association of Queensland, evidence 21 May 1997 p91)

7.45 The evidence on all this was anecdotal and consisted of hopes and fears as much as observed cases. What is the trend? Are user charges really adding to the resources of our cultural institutions and nature conservation agencies, or simply replacing central funding? If the latter, which is cause and which is effect - is it the facility to charge fees that encourages governments to reduce central funding, or is it governments' decision to reduce central funding that forces site managers to charge fees?

7.46 The first question suggests an obvious research program, which would be to track the budgets of cultural institutions and national parks services over time, broken down into central funding and user pays revenue (and of course accounting for other factors such as the overall enlargement of the national parks estate) to see whether increasing user charges is really adding to total resources for improved service. [20]

RECOMMENDATION 4

7.47 The Committee recommends that the Department of Communications and the Arts, in consultation with State/Territory authorities and relevant peak bodies, should sponsor research into the trend of user charges and similar revenues versus budget funding among cultural institutions.

7.48 The Committee recommends that Environment Australia, in consultation with State/Territory authorities and relevant peak bodies, should sponsor research into the trend of user charges and similar revenues versus budget funding among nature conservation agencies.

7.49 The Committee suggests that the second question posed just above is probably unanswerable, and unimportant. User charges and reduced central funding have neither cause nor effect, but are aspects of one phenomenon: they go hand in hand where there exists a broader trend to `user pays' in general:

`Governments have shifted resources in the economy and there have been concurrent political pressures to introduce charging for access to services which have been previously delivered to the user at little or no direct cost....' (National Museum of Australia, submission 42 p358)

7.50 Where this philosophy exists it will not be changed by `administrative' recommendations to do with whether fee revenue should be retained locally. That will not stop governments from reducing central funding correspondingly, if that is where the philosophy leads. [21] Ultimately, public funding for public services depends on community support for them.

`The argument that entry should be free needs to be accompanied by an argument about the source of replacement funding or a revised assessment of the value of the institutions and its benefits.' [emphasis added] (Australian Museum, submission 30 p242)

7.51 This is why the committee argues that entry fees to museums and art galleries, if they change them from cultural institutions which we visit as citizens to entertainment businesses which we visit merely as customers, are so dangerous for their longer term public support.

7.52 The important thing is to affirm as a matter of principle the high importance of the community benefits that museums, art galleries and national parks provide. Accordingly, the Committee agrees that they should be funded from general revenue on a basis which is adequate for the purpose and not in any way related to the fees collected. Deciding how much is adequate (having regard to the fact that no grant is ever as great as it could be, and there are many competing demands for public expenditure) is fundamentally a political question.

`Reliance on user pays diverts attention from core charters'

7.53 A further argument put against user charges is that they will divert attention from core conservation/ education functions. Part of this argument was the administrative complaint that professional staff tend to be inefficiently distracted by the demands of book-keeping. [22] The more important part of the argument was that once charges are introduced managers will come to rely on them, and this will lead to subtle (or not so subtle) undesirable changes in management's direction. This was typically described as pressure to `overdevelop' national parks, maximising revenue at the expense of the core goal of nature conservation, and pressure to `popularise' museums in a negative sense, at the expense of core goals of education and cultural enrichment.

7.54 The argument is closely linked to the `thin end of the wedge' argument described in the previous section: reduced central government funding is said to be the cause of these undesirable pressures:

`The [Australian Conservation] Foundation ... supports various mechanisms to ensure that user pays principles are followed, and that funds thus generated are directed back into proper management. However, this must not be misused by governments to avoid adequate funding thus making a nature conservation resource dependent on tourism use.' [emphasis added] (Australian Conservation Foundation, submission 22 p186)

`...and creates pressure for overdevelopment' (national parks)

7.55 A number of submissions feared that a growing `cost recovery' mentality in national parks would downgrade the core function of nature conservation and encourage excessive development for the sake of maximising revenue from visitors.

`Other visitor facilities, however, such as overnight accommodation and catering, can be provided by private enterprise outside the park boundaries. Allowing them within the parks (as at Kosciuszko and Kakadu) as a means of raising park revenue defiles the natural environment.' (The Colong Foundation for Wilderness Ltd, submission 7 p58)

7.56 There are two aspects to this: firstly, the fear that managements will be encouraged to increase visitation, perhaps beyond an environmentally appropriate level; secondly the fear that managements will come under pressure to give more emphasis to visible visitor facilities than to less visible but equally important fundamental conservation projects:

`In may cases there is a desperate need for funds to be put toward feral animal control, noxious weed control, fire management including hazard reduction and proper park planning and wildlife research. It is disappointing then to see the priorities changing toward those of construction, engineering and development in what is seen to be an attempt to make locally visible the results of entry fee collection.' (D Chinner, submission 1 p4)

Senator Lees: `Are you suggesting that the reality is that, instead of spending money perhaps on the control of feral animals or to protect a particular species within a park, the money go to, let us say, a new tourist promotion facility or a new toilet block to encourage more people to visit the park?'
Ms Gibbs: `That is right... Wilpena was going to get several million dollars for redeveloping the tourist facility, of which $1million was going to go for upgrading of the entrance off the highway so that people would have a nice aspect as they were driving up. This was being accounted for as conservation dollars, while there is no improvement in the real tangible conservation programs.' (J Gibbs, Conservation Council of South Australia, evidence 2 July 1997 p167)

7.57 Some who accept user charges in principle emphasised that they should not be so great a proportion of income as to risk causing bias:

`The Australian Conservation Foundation supports user pays in relation to visitors to national parks with the following qualifications:...2. these funds not being the predominant source of revenue for the national park as this would cause tourism-orientated management to dominate over nature conservation imperatives.' (Australian Conservation Foundation, submission 22 p182)

7.58 The Tasmanian Conservation Trust suggested a protocol that no more than 25 per cent of the costs of track management should be recovered from current users. [23]

7.59 Several national parks were mentioned as sites of controversy over conservation versus development:
1. Wilsons Promontory (Vic): proposals for a 150 person licensed hotel and a serviced lodge within the park, `despite the fact that there are untapped reserves of accommodation of three and four star level around the promontory'; [24]
2. Kosciuszko (NSW): `... a large increase in accommodation (about 1,000 beds) for some of the ski resorts... a major development at Perisher, with buildings up to five storeys in height...' [25] `Mr Prineas [chairman of the Nature Conservation Council] said the Perisher master plan was a test case for the future of NSW's national parks, which faced growing demands for commercial and other access for non-conservation purposes. “Certainly funding is at the bottom of it and I see that as dangerous for the parks service.” he said.' [26]
3. Fraser Island (Qld): `There is now a history over the past decade of road standards on Fraser Island being developed to meet tour operators' requirements rather than tour operators acquiring vehicles which would conform with the best interests of managing Fraser Island... the reluctance of the Department of the Environment to place a ceiling on visitor numbers is an indication that they are already addicted to the expectation of funds from an ever increasing number of visitors, although there is clear evidence of degradation resulting from overuse of a number of sites.' [27]
4. Port Arthur (Tas): `...commercial activities have taken precedence over conservation of the site and have trivialised its significance.... The new plan reads not as a management plan but as a development strategy devoid of sensitivity towards the heritage values of the site....' [28]
5. Wilpena Pound (SA). [29]

`You have to really be aware of the way things tend to go historically. A small resort where somebody has chosen to have their weekender gathers a few more people and then it becomes a small village with more facilities and it finishes up as a town.' (Dr G Mosley, Peak Environmental Enterprises and Conservation Centre of Australia, evidence 15 September 1997 p457)

7.60 These stories bring to mind the cautionary tales that one can read about over-development of national parks in the USA:

`Americans went down the path of allowing increasing access, accommodation and commercialism in US parks. However, they have seen that, in an ever crowded world, this is a slippery slope to completely undermining the nature conservation purpose of national parks. In the July/August edition of the magazine Audubon, there is a detailed chronicle of regreening parks through road closures and removal of millions of dollars of commercial development, including the destruction of hundreds of buildings in California's Sequoia National Park. The principle that the US Parks Service has rediscovered is that any use of national parks should be consistent with the primary purpose of conserving nature; that parks should be passed on unimpaired to future generations.' [30]

7.61 The United States research mentioned in paragraph 7.46 (footnote 20) tends to support the fears of opponents of user charges. Following steep increases in entry fees to US national parks in 1986, visitor numbers became relatively more influential in decisions allocating appropriations among different national parks; nature conservation needs relatively less influential. `Since visitors inevitably produce wear and tear on resources, such an allocation makes some environmental sense... However, increasing such emphasis may also preclude increasing resources to new issues or to areas with special needs, such as parks with severe external threats...' As well, the fee increases did not increase the management autonomy of the National Parks Service (as some had hoped), but rather increased the tendency for members of Congress to interfere in day-to-day management:

`One superintendent explained the exact process this way. Rather than returning the fee money to parks for discretionary operations, representatives instead observe the increased revenues in the General Fund and then, under pressure from various constituents, tell field managers what to spend the money on within individual park units. Thus, even though appropriations did not go up accordingly, more expenditures were mandated for specific projects, such as visitor centres or roads, from higher levels... constituents are more likely since the fee increase to complain to their representatives about their park experience since they assume that the money they paid to enter goes back into the park's budget.' [31]

7.62 An underlying issue in this argument is that what constitutes `over-development' is a matter of opinion: what may be `overdevelopment' to those who emphasise the conservation function of national parks may simply be `improving access' to those who emphasise the public recreation function. (The point correlates to the underlying tension in museums and galleries over how `popular' they should try to be.) Witnesses of the second type tended to see `pressure for improved facilities' in a more positive light:

`Seeking value for money, this consumer interest will drive the park authorities to supply more cost effective services than previously.' (Treasury, submission 20 p174)

`...and may change the place's focus undesirably' (museums/galleries)

7.63 The concerns just described for national parks have close correlates in the case of museums and galleries. Many submissions feared that a cost recovery mentality in museums and art galleries could or would change their focus detrimentally:

`This extension of use diversifies the purposes and meanings imbued in an organisation. This can have positive consequences in terms of audience development. However it can also broaden function too widely, diluting and confusing the organisation's sense of purpose and core business.' (Australia Council, submission 35 p287)

`Increasing consumer focus may only result in a different product, rather than a better quality product. `Safe' exhibitions may not achieve exhibition and education goals....' (National Campaign for the Arts Australia Ltd, submission 37 p309)

7.64 Some submissions feared the emergence of a `blockbuster treadmill', where `the audience loses all interest in the permanent and locally based exhibitions, devaluing the collection and forcing staff focus to remain on high output exhibitions.' [32]

`We know and say often that collection maintenance and scholarship functions are important. But even more importantly we must say that good public programming depends on those functions as much as it does on good education, good design and so on. If we don't keep this uppermost then we may well go down the track of the fairground... If museums are forced to depend critically on earnings from exhibitions and the like, balanced and innovative and diverse public programming will be out!' [33]

7.65 Some submissions expressed particular fears that too great a `customer focus' could cause management to downgrade less visible longer term `back-of-house' functions of collection, curation and research:

`...while increased visitor focus is desirable, it can result in such a strong visitor focus that other functions of the organisation are eclipsed.' (Australian Museum, submission 30 p242)

`There is also some concern [in the Western Australian Museum] that less profitable, but still important programs may be cut with this new focus upon cost recovery. This may be particularly true for research and long-term collections.' (Government of Western Australia, submission 53 p464)

`The British Museum (Natural History) has suffered immensely in this regard. Permanent curatorial appointments are a thing of the past and over forty scientific and support positions have been lost in the last four years. In that same period three dinosaur exhibitions have been mounted, not because of their intrinsic merit but to exploit the almost unique ability of dinosaurs to attract visitors.' (P Filmer-Sankey, Newcastle Regional Museum, submission 56 p584)

7.66 On the other hand, increased `customer focus' can be seen in a positive light, depending on the relative emphasis that one places on the institution's various functions:

`Customer focus is increasingly recognised as an important element for major museums to consider.' (National Campaign for the Arts Australia Ltd, submission 37 p309)

7.67 The different angles of witnesses on this - `increased focus on customer service' as a positive [34] versus `unadventurous programming choices... resorting to becoming entertainment venues' as a negative [35] reflect interesting underlying tensions over how `popular' museums and galleries should try to be.

7.68 On the particular problem of caring for deteriorating collections, the Committee notes the concerns of the Heritage Collections Committee of the Cultural Ministers Council:

`The “silent, scarcely visible damage to items in Australian museums...” (Pigott 1975) remains at crisis point... recent research has shown that collections in Australian museums are still in a perilous condition (Anderson 1991)... The renaissance experienced by museums since the mid-1970s, and the dramatic growth in the number, range and quality of museums and programs in Australia has compounded the problems associated with the conservation and preservation of collections... While museums continue to collect they have a backlog of heritage in need of treatment. None of these institutions has adequate resources to meet their in-house conservation and preservation needs (Arts Victoria 1991-92)' (Cultural Ministers Council Heritage Collections Committee, National Conservation and Preservation Policy for Movable Cultural Heritage, 1995, p7)

7.69 In light of this, the risk that greater `visitor focus' will cause museums to downgrade back of house functions such as curation is a particular concern.

Making museums/galleries more `commercial'

7.70 An extra dimension is added to the argument with the proposition that trying to make museums more `commercial' may be not only dubious in terms of their core mission; not only detrimental to considerations of public esteem and `citizenship' (see chapter 4); but also imprudent simply in terms of their market position. Some fear that an excessive `entertainment' focus may destroy a museum's traditional positive image as a worthy cultural institution without establishing a viable replacement image:

`By charging for general entry, the Museum presents itself as a competitor with other elements of the “entertainment” industry. This is an arena in which museums in the full sense of the word are poorly equipped to compete. At a stroke they have achieved three things: the cultural disenfranchisement of a large section of their client group, swapped their traditional and sympathetic image as places of education and learning for the hurly burly of commercial entertainment, and put themselves in direct competition with better equipped and less constrained organisations for the recreational dollar.' (P Filmer-Sankey, Newcastle Regional Museum, submission 56 p583)

7.71 Others think that the challenge should be accepted wholeheartedly:

Senator Hogg: `What areas do you see as your direct competitors?'
Mr Morris: `The entertainment industry, without any doubt... I went to Seaworld in Orlando last year. It had a couple of the finest exhibitions I have seen anywhere. They were using live animals. They had polar bears and dugongs in the exhibitions. They were outstanding. They were educationally sound. The entertainment value was enormous. They invested in the polar bear exhibition, which was an arctic experience, $US38million. That is a huge investment in one exhibition. It is quite clear that if you are just down the road with a museum and you have a few stuffed polar bears it will not have the same appeal... If we are stuck over here with a bunch of rocks and stuffed animals on display, assuming that we are doing something to seriously help benefit this community, we need to think again.' (G Morris, Museum of Victoria, evidence 15 September 1997 p412)

7.72 Mr Morris envisages a museum that is both educationally relevant and entertaining - a goal no-one would quibble with. What it means in practice, and how these goals should be balanced where they conflict, is of course a matter of constant debate. The question here is what are the risks of failure.

`People have very intractable attitudes to the role and performance of museums which permeate even the highest political levels. Generally museums are regarded as static and unchanging, and a place of serious education...' (Australian Museum, submission 30 p241)

7.73 There is the risk that if an institution imposes charges for the sake of a small proportion of cost recovery, it may make itself into something that is neither fish nor fowl: it may damage its public image as a community cultural `institution' and come to be seen as merely an entertainment business; it may lose a large proportion of its visitors (and the political support that those numbers provide); it may lose volunteer or sponsorship support; yet it may still not be very effective in competing as an entertainment business, and it will still need a large proportion of public subsidy, to get which it needs a positive public image as a community facility.

`Quite aside from the problems a market-centred strategy raises for the museum's mission, such a strategy is unlikely to be viable in the long run. For one thing, income earned through admissions and retail operations represents a limited, if indispensable, part of the art museum's operating budget - far smaller than is the case for theaters or symphony orchestras, for example. What this means is that large and hard-won percentage increases in admission and retail income yield small increases in operating budgets. Altering this situation would require changing the museum's mission, structure, and mode of operations, and going into head-to-head competition with department stores, motion pictures and theme parks. It is not obvious that museums would fare will in such competition (especially given their limited access to capital markets) or that they would willingly make the changes such a strategy would require.' [36]

`Museum directors [should] cultivate, in their public relations campaigns, the goodwill of the population in general (as opposed to visitors only) since it is the willingness to pay taxes that is the main source of value [ie income] for a museum.' [37]

7.74 Thus the cost recovery focus, just as it changes the visitor from citizen into customer, may change the institution itself, in people's minds, from a community resource to just another business competing in a wide market.

7.75 The Committee shares these concerns. We return to the theme of chapter 2: the fundamental reasons for the existence of the place as a public facility - the core charter to do with education and cultural enrichment - must be paramount. Otherwise the place has no good reason for existence in the public realm, and one might well ask what the government is doing running an entertainment business.

Comment on the risk of diverting from core charters

7.76 The Committee shares the concern that too great a `user pays' focus risks may detrimentally divert management's attention from core functions. The weight of evidence on this from opponents of user charges (with examples) was stronger than the in-principle statements of the other side that user charges can lead to `improved customer focus.' We acknowledge that the evidence on this matter was anecdotal, and we recommend wider research comparable to that on US national parks quoted in paragraph 7.61.

RECOMMENDATION 5

7.77 The Committee recommends that the Department of Communications and the Arts, in consultation with State/Territory authorities and relevant peak bodies, should sponsor research on the relationship between user pays policies and management emphases in cultural institutions.

7.78 The Committee recommends that Environment Australia, in consultation with State/Territory authorities and relevant peak bodies, should sponsor research on the relationship between user pays policies and management emphases in national parks.

7.79 Otherwise, as with the matter of funding discussed further above, it is hard to suggest `administrative' recommendations on the matter. Just as the funding of a public institution depends on community support, so the emphases in its functions and the style of its services depend ultimately on community preferences. Debates on conservation versus development in national parks, or what is the proper mission of museums and art galleries, must be fought out in the political arena. To serve this debate it is of course vital that nature conservation and cultural heritage agencies should have orderly, open, consultative strategic planning processes, so that the community is aware of all options and their consequences, and can avoid the tyranny of little decisions.

7.80 For the Committee's in-principle view, we repeat the fundamental themes of chapter 2: these are public institutions maintained for public purposes of conservation, education and cultural enrichment. Priority must go to these primary goals: otherwise the whole reason for maintaining the place in the public realm is undermined. A certain amount of cost recovery may be possible, but as an influence on management policy it must be secondary.

Effects of `user pays' on volunteerism and sponsorship

7.81 In 1995 an estimated 11,400 volunteers were involved with 228 museums and art galleries which had paid staff - an average of 50 volunteers per institution. There are also about 1,500 museums and galleries around Australia, mostly small local museums, which have no paid staff. [38] A 1993 survey found that about 60,000 people had a `work involvement' in museums and art galleries (defined to include volunteers), and about 75 per cent of these (45,000 `involvements') were completely unpaid. [39] Volunteerism also exists in national parks, but the Committee has no information on the extent of it.

7.82 Several submissions argued, mostly in respect of museums and art galleries, that the services of these volunteers are important (particularly in small museums and in the country); that `user pays' policies discourage volunteers; and that, because volunteer help is often badly recognised in accounts, the detriment of losing it tends to be insufficiently noticed.

`Volunteering arises from the people's desire to contribute to the public good... The more an institution takes on a private sector profile, the less it can attract this assistance and support.' (National Association for the Visual Arts, submission 34 p278)

`An enormous amount of voluntary work is done by members of the public, particularly through `Friends' organisations. Generally speaking, all of these contributions from members of the public do not show up on balance sheets. If our major institutions are run like profit-oriented businesses, all of this support will, in time, dwindle away to nothing.' (Trustees of the Tasmanian Museum and Art Gallery, submission 21 p179)

Senator Hogg: `What you have just described [volunteerism] has been tagged `social capital' in more recent times, and it would seem to me that that needs to be taken into the equation when one is considering the funding that is occurring to various institutions. Do you find that happening in your case?'
Mr Marginson: `No... I do not think it has ever been a greatly successful argument with government, except in the general sense of the commitment by the community. In small regional museums, I believe that that local dedication and commitment is what often sustains them.' (G Marginson, National Campaign for the Arts Australia Ltd, evidence 6 August 1997 p300)

7.83 Similar considerations arise in respect of sponsorship more generally:

`An important effect [of removing entry fees] has been the response of the business community. Where previously the [Newcastle Regional] Museum had been fairly unsuccessful in attracting sponsorship, a significant change in attitude has been observed...Without exception, actual and potential sponsors indicated that their interest is due to the Museum's very large visitation and the positive public sentiment towards it. This sentiment in turn, is due to the adoption of free entry.' (P Filmer-Sankey, Newcastle Regional Museum, submission 56 p526) [40]

`We find that the capacity to attract private funds, particularly for buildings, is greatly enhanced because the museum is free. This is an ideal of generosity that attracts generosity.' (N MacGregor (National Gallery, UK), New Statesman 7 November 1997 p37)

7.84 When we add the public contribution to the collection, opposition arises on ethical grounds to charging for access to it:

`All major museums and galleries have valuable works of art and historical exhibits on long-term loan from members of the community. All benefit substantially from bequests, gifts of valuable items, gifts of money and corporate sponsorship.... The contributions made by members of the public in the past by way of gifts, loans, voluntary work and bequests, in our view necessitate the giving of free entry to the public to our major institutions.' (Trustees of the Tasmanian Museum and Art Gallery, submission 21 p179)

`We mentioned the Art Gallery of New South Wales where there is a clear sense that the public collection, which has been collected over 150 years, is there for all the community to see and enjoy.' (G Marginson, National Campaign for the Arts Australia Ltd, evidence 6 August 1997 p293)

7.85 Such comments recall a key discussion point of chapter 4: are we citizens or merely customers? Entry fees, if they change the public image of museums and galleries to merely another entertainment business, jeopardise these other dimensions of their community purpose.

Miscellaneous arguments

7.86 Many submissions (including both those who favoured `user pays' and opponents presenting fallback positions) suggested features of a good user pays regime. We conclude by describing these and some other miscellaneous arguments, mostly without offering any particular opinion of the Committee.

Should user charges revenue be retained locally?

7.87 Most submissions on national parks felt strongly that user charges revenue should be retained locally, since there is strong evidence that charges are accepted by the public more readily when the money is used for visible local improvements (in the case of museums and galleries this argument was hardly mentioned). A subtlety is that this emphasises the concept of fee for service rather than a charge to enter public land - which is regarded as an important distinction. [41]

7.88 The desirability of retaining income for visible local improvements, and the risk of pressure to overdevelop the park at the expense of less visible conservation management needs, are of course two sides of the same coin. On balance the Committee agrees with retaining income for visible local improvements, providing one extends the concept to include less visible local conservation projects. This of course raises the need for better public education about the true costs - more visible and less visible - of managing a national park.

Senator Payne: `When you talk about hypothecation of funds to nature conservation management of the national parks would you contemplate a direction of some of those funds into an education process like that?'
Mr Wright: `I think education is a very important part of park management.' (P Wright, Australian Conservation Foundation, evidence 15 September 1997 p461)

7.89 Local contribution to local improvements should be seen as something more than just public relations massaging. It relates to the discussion of `citizenship' in chapter 4: the local contribution with visible local results can help put over the idea that the facility does not just belong to `the government' - it is ours as a community. This is the same attitude that promotes volunteerism and sponsorship.

`I am doing a review of advisory committees that assist with national park issues in Tasmania. One of the key things which has come up is we have now developed a strategic approach to what we call community partnership... There are many people with an intimate knowledge of their coastline - people who are quite willing to form groups to assist with some management decisions and things of that kind.' (Prof. B Davis, evidence 7 March 1997 p7)

7.90 A nuance to the question is `how local is local'? In other words, at what level should money be pooled? Is it fair to ask visitors at more popular national parks to subsidise facilities at more remote national parks? The National Parks Association of Queensland thought it was not fair; [42] by contrast, the Conservation Council of South Australia recommended hypothecation within the region: `charges raised to enter a large park could be used in that and in smaller nearby parks.' [43] Another view is that hypothecation for the purposes of the organisation is sufficient, and is necessary for flexible management:

`It is necessary to have flexibility to target particular projects or areas from one year to the next. For instance, it may be a priority to undertake a major capital works program in an area that does not generate much revenue. This program may be financed out of revenue generated in a number of different areas.' [44]

7.91 The same range of opinions on this point was reported in Managing Australia's World Heritage, a 1996 report by the House of Representatives Standing Committee on Environment, Recreation & the Arts.

Is there a need for standardisation of user charges?

7.92 The question sometimes arose in evidence, is there any need for a `national policy' on user charges in museums, art galleries and national parks? Few submissions addressed this issue. One relevant comment was:

`Tourists and holiday makers in Australia are being faced with an endless array of small and irritating charges all of which tend eventually to discourage travel and the enjoyment of areas which, in tourist and economic terns, should be the source of longer stays and more frequent visits.' (D Chinner, submission 1 p3) [45]

7.93 On the other hand, several submissions spoke of the need for flexibility in response to local circumstances (particularly in relation to schemes of concessions). [46] Professor Davis favoured `careful consideration of the pattern of parks usage, so as to cater for repeat visitors, casual visitors and tourism operators.' [47] Mr Grey commented:

`These services have both private and public components and each on will have its own peculiar mix and will vary from park to park, from site to site and within the site itself on some occasions.' (F Grey, evidence 15 September 1997 p428)

7.94 On the whole a need for standardisation was not regarded as an issue. The evidence on national parks suggests that entry fees should be sensitive to elasticity of demand, which may vary greatly from one national park to another depending on the alternative attractions; and The Committee has recommended that user charges for value-added services should be based on marginal cost recovery (providing the services really are optional extras, and not just proxies for an entry fee - see paragraph 7.26). In the case of museums and galleries, the Committee supports free entry for key national and state institutions as a matter of social policy. For both national parks and museums/galleries economic theory suggests free entry wherever charges would significantly depress demand. [48] We hesitate to make any more detailed recommendations - local circumstances are too variable.

Policies for tourist operators versus private visitors

7.95 Some witnesses thought it was unfair that in some national parks commercial tourist operators must pay fees while private visitors do not.

`Is there really any reason why a family going up by car to a national park and enjoying that is any different from people who take a bus trip there?' (J de Horne, National Parks Association of Queensland, evidence 21 May 1997 p92)

7.96 This was especially raised in relation to the Great Barrier Reef Marine Park Environmental Management Charge. [49] Others thought it was quite fair to make tourist operators pay for their commercial use of public property.

Senator Hogg: `Why should the commercial people have to pay for a permit when the locals can go out and watch the whales for nothing?'
Mr Wellard: `...It is a philosophical argument, I guess, because the argument would be that the commercial people are actually utilising the public resource for commercial gain so they, therefore, need to put money back in to help with the management of that resource.' (G Wellard, Queensland Departmentt of Environment, evidence 21 May 1997 p101)

7.97 The principle is analogous to the extra charges for commercial use reported by some libraries and archives. [50] The equity issues echo those raised in respect of visitors versus local residents (paragraph 4.22ff).

7.98 Some thought that national park authorities are generally not very good at making money from commercial tourist operations: `Park managers are not without blame for their own situation either. Licence fees are so low as to be ridiculous...' [51] Mr Donovan quoted an opinion that would go even further:

`Extract: Pacific Asia Travel Association Conference:... “Indeed, the concept that those who profit from tourism should contribute to conservation can and should be applied to the wide range of businesses - hotels, stores and restaurants - that make money from visitors to historical monuments and sites.”' (M Donovan, submission 6 p50)

7.99 Mr Sinclair described various bureaucratic impediments that national park authorities put in the way of tourist operators, and regarded these as particularly regrettable on the grounds that sometimes environmental impacts can be minimised by encouraging visitors to come on tours rather than privately. [52]

7.100 The Committee agrees that commercial tourist operators should be charged fees that represent a fair contribution to preserving the resource from which they draw profit. Where tourist operators are charged and private visitors are not, it is usually because of the greater practical problems of targeting the private visitors, and this must be accepted as a rational management response. As noted in paragraph 7.35, the Committee does not favour charging an additional component for profit (the `cash cow' that tourist operators objected to [53]), mainly because higher ambitions for cost recovery could increase the risk of bias towards management for tourism at the expense of fundamental conservation goals.

Consultation and timing of new regimes

7.101 Around the time of this inquiry there was particular criticism of an increase to the Great Barrier Reef Environmental Management Charge. In August 1996 as a budget-related decision, the government announced that the charge (then $1 per visitor per day) would rise to $6 from 1 January 1997. In light of concerns expressed by tourist operators the government later amended its plan so as to increase the Environmental Management Charge to $2 from 1 January 1997 and to $4 (with various concessions) from 1 April 1998.

7.102 There has been criticism of the short lead time for the increase of the Environment Management Charge. [54] The Inbound Tourism Organisation of Australia Ltd, without referring to the Great Barrier Reef issue by name, stressed that tourist operators make international contracts well in advance, and (depending on foreign laws that may limit options for variation clauses) they may be unable to pass on to customers extra government charges levied during the contract period:

`We do ask that the Committee... take into account the special problems of the inbound tourism industry and the impossible task it has in passing on price increases, including government charges on the user pays principle, when notice of less than two years is given.' (Inbound Tourism Organisation of Australia Ltd, submission 45 p384ff)

7.103 The Committee endorses this concern. The underlying issue is that government levies are liable to change much more erratically, in much larger lumps, than ordinary business costs. What is needed is not only adequate consultation and notice to the industry in the event of changes, but also a stable ongoing policy of making changes in small increments at more regular intervals.

Details of user charges schemes

7.104 Submissions, mostly in respect of national parks, described the great variety of ways that user charges are levied around Australia (see paragraph 2.21ff). Most of this is uncontroversial (if we have accepted user charges in principle) and the Committee has no particular comment except:
1. It appears that the public reacts negatively to the absence of appropriate concessions, particularly for families and pensioners. [55] The Committee supports the inclusion of suitable concessions both on equity grounds and for the sake of good public relations.
2. One option raised in submissions was higher charges for international tourists. [56] This does not seem to be done much at present. The philosophical justification for this would be that these people have not contributed to management costs through their taxes; the practical justification would be that they are probably less price sensitive than domestic tourists. An opposing view is that because of the wider importance of tourism to the Australian economy, attempts to `milk' tourists, if they reduce the overall attraction of Australia as a tourist destination, could be counter-productive. [57] There is also the practical problem that international tourists do not walk around with labels on their foreheads saying `international tourist.'

Where the cost of collecting fees is excessive

7.105 Several submissions, mostly in respect of national parks, argued against entry fees/ user charges on the grounds that the cost of collecting them may be prohibitive. [58] On the other hand, the Committee notes that honesty boxes and advance ticketing schemes which some submissions described can make it viable to charge for remote or little visited national parks where it would not be viable with the traditional staffed tollbooth.

7.106 In any case, a situation where it is not practical to collects fees says nothing about another situation where it is practical. Where the cost of collection is excessive, the economically rational course is simple: don't try. There was no suggestion in evidence by management authorities that they do anything other than follow this rule. It leads to a windfall gain to visitors who escape paying, but the Committee does not think that this should be called an injustice to visitors in other places who do pay, providing the charge is fair in principle.

Rationing fragile areas by price or permit

7.107 Some submissions suggested (mostly in relation to national parks) that user charges can be used to ration access to fragile areas or areas where visitors' satisfaction is reduced by congestion. [59] An alternative view is that this is unfair to poorer people, and where rationing is necessary it should be done in ways that do not depend on ability to pay (as is already done in a few national parks by means such as permits and booking systems).

7.108 We note as a related matter that entry fees may reduce vandalism:

`When we introduced fees in Belair, the most significant flow-on effect was the reduction in vandalism and hooliganism in Belair National Park. The fact that we began to charge took out a whole element of park users that were, in our terms as managers, undesirable.' (A Holmes, SA Dept of Environment and Natural Resources, evidence 2 July 1997 p141)

7.109 Rationing by price was not mentioned in relation to museums and archives Several submissions commented that access to fragile items might have to be restricted, but none suggested it should be done by imposing charges for that purpose; the tacit assumption is that more sensitive controls are necessary (such as limiting access to researchers who will then publish for a wider public). [60]

7.110 The Committee acknowledges that rationing by price can be an economically efficient way of maximising the welfare gain from a congested public good (since, when a charge is imposed, those who drop out first will tend to be those who value the good least). Nevertheless, on balance the Committee does not agree with rationing by price. Efficiency must be balanced against equity. We consider that the matter of principle is the more important consideration. National parks and cultural institutions belong to the community as a whole. Where access needs to be restricted for conservation reasons, it should be done in a way that is impartial to all. Where permit and booking systems are used, any associated fees should not be so great as to depress demand, but rather should aim to cover administrative costs only.

 

Footnotes

[1] Australian Library and Information Association, Statement on Free Library Services to All, 1979-1994

[2] National Library of Australia, submission 44 p378

[3] Australian Archives, submission 33 p264

[4] National Film and Sound Archive, submission 40 p340

[5] Australian Museum, submission 30 p245

[6] for example, Queensland Museum, submission 31 p248; Australian Archives, submission 33 p263; National Library of Australia, submission 44 pp381-2; Australian Society of Archivists Inc., submission 47 p416

[7] Wildlife Preservation Society of Australia, submission 9 p92. Also for example, Dr C Nobbs, submission 39 p 335, Government of the Northern Territory, submission 41 p355. A few submissions opposed these things in any case on conservation grounds: `Development within national parks should be limited to properly maintained park roads, parking and toilet facilities. We are opposed to commercial development or any form of revenue raising within parks.' Colong Foundation for Wilderness, submission 7 p59

[8] Queensland Museum, submission 31 p249

[9] National Library of Australia, submission 44 pp381-2

[10] Australian Museum, submission 30 p244. Similarly Queensland Museum, submission 31 p248

[11] National Film and Sound Archive, submission 40 p340-1

[12] This conceptual scheme explains the otherwise perplexing difference between a half-empty museum and a half-empty cinema. Both are excludable non-rival public goods; in both cases the avoidable cost of admitting an extra user is zero, the efficient charge is zero, and a deadweight loss of welfare is created by refusing free admission to those unwilling to pay. The difference is that in the case of the cinema society does not recognise any `merit good'/ `core service' element, and so does not subsidise fixed costs. In the language of this section, the whole existence of the cinema is `marginal' (dispensible) to society. The cinema operator must perforce charge entry fees that cover fixed costs. Society accepts the deadweight loss of welfare as the price of refusing public funding.

[13] As, for example, in the National Library of Australia's pricing principles dotpointed in paragraph 7.15.

[14] Wildlife Preservation Society of Australia, submission 9 p92; Dr C Nobbs, submission 39 p 335

[15] `Economic rent' is a price which a producer can extract above that necessary to keep the factors of production in their present use. In the case of a national park the possibility may arise because of the operator's position as the monopoly provider of access to a uniquely attractive place.

[16] Where elasticity of demand is significant, the arguments of chapter 5 suggest that entry fees should not be charged.

[17] That is, using user charges to contribute to improved facilities was uncontroversial among those who believe it is good to improve facilities. In the committee's evidence environment groups varied in how much development they regard as acceptable in national parks.

[18] See paragraph 5.49 for comment by the New South Wales National Parks & Wildlife Service.

[19] Environment Australia, submission 46 p396

[20] Similar research in the USA following steep increases in national park entry fees in about 1986 found no increase in overall resources to national parks. In spite of the promises of proponents before the fee increases, the increased fees entered general government revenue but appropriations were not increased in return. Lowry W R, `Land of the fee: entrance fees and the National Park Service', Political Research Quarterly [University of Utah] vol. 46 no. 4, Dec. 1994, p823ff

[21] The Committee does support retaining revenue locally for other practical reasons: the evidence was that it makes visitors accept user charges more readily. See paragraph 7.87ff.

[22] D Chinner, submission 1 p6

[23] Tasmanian Conservation Trust, submission 17 p147

[24] The Colong Foundation for Wilderness, submission 7 p67; Peak Environmental Enterprises and Conservation Centre of Australia, submission 15 p138

[25] The Colong Foundation for Wilderness, submission 7 p72

[26] Sydney Morning Herald, 20 October 1997 p4

[27] Fraser Island Defenders Organization/ J Sinclair, submission 43a p367-8

[28] A Piper, submission 2 p13,18. For a contrary view see Prof. B Davis, evidence 7 March 1997 p2

[29] Wildlife Preservation Society of Australia, submission 9 p96; J Gibbs (Conservation Council of South Australia), evidence 2 July 1997 p167,174

[30] P Figgis (Australian Conservation Foundation), Sydney Morning Herald 5 November 1997 p16

[31] Lowry W R, `Land of the fee: entrance fees and the National Park Service', Political Research Quarterly [University of Utah] vol. 46 no. 4, Dec. 1994, p839-840

[32] National Campaign for the Arts Australia Ltd, submission 37 p309

[33] Griffin D, `What is the notion of access in museums all about?', Something for Everyone: Access to Museums, proceedings of 1991 conference of the Council of Australian Museum Associations, Adelaide 1991, p13-14

[34] Australian Museum, submission 30 p240

[35] National Association for the Visual Arts, submission 34 p277

[36] DiMaggio P J in Feldstein M ed., The Economics of Art Museums, University of Chicago Press 1991, p49

[37] Martin F, `Determining the size of museum subsidies', Journal of Cultural Economics vol. 18 no. 4, 1994-5, p263

[38] Museums Australia Inc., Museums 1995: art museums, museums and public galleries in Australia, Museums Australia July 1996, p9. Cultural Ministers Council Statistical Advisory Group, Museums, Art Museums and Commercial Galleries in Australia 1993, 1993

[39] A `work involvement' was defined as being involved in an activity, for the benefit of someone outside the respondent's family, whether paid or unpaid, at least once during the sample year. Australian Bureau of Statistics, Work in Selected Culture/Leisure Activities - Australia, March 1993, 1993, p1,8

[40] In 1996 the value of corporate support to the arts (including unconditional donations, sponsorship in return for promotion, and various assistance in kind) was $65million, about 9 per cent of which went to museums and galleries. As a proportion of total public benefit corporate support the arts has declined from 13 per cent in 1986 to 5 per cent in 1996 (other categories are sport, education and welfare). 29 per cent of supporters and 51 per cent of non-supporters agreed that `the arts should be able to stand on its own without support from government or business.' The survey was conducted at a level of generality which sheds little light on Filmer-Sankey's proposition; but it is possibly relevant that the most reported reasons for supporting the arts were `as a community service' and `to improve the image of the company in the public's eyes'. Yann Campbell Hoare Wheeler, Corporate Support for the Arts 1996, Australia Council 1996, pp5,6,24,29,33,36

[41] Queensland National Parks & Wildlife Service & Department of Environment, Benchmarking and Best Practice Program: user pays revenue, report for ANZECC September 1996 p23

[42] National Parks Association of Queensland Inc., submission 24 p207

[43] Conservation Council of South Australia, submission 29 p235

[44] Government of Queensland, quoted in House of Representatives Standing Committee on Environment, Recreation & the Arts, Managing Australia's World Heritage, Canberra 1996, p177

[45] Note the underlying view that payments for entry to these public heritage sites are qualitatively different from payments in the ordinary course of business. No-one objects to paying an array of small charges when they go shopping and visit an array of small shops.

[46] For example, National Film and Sound Archive, submission 40, p340-1

[47] Prof. B Davis, submission 5 p38

[48] This assumes the marginal cost of admitting an extra visitor is near zero.

[49] Mike Ball Dive Expeditions Australia, submission 51 p453; Tourism Council Australia, submission 57 p595.

[50] National Library of Australia, submission 44 p382; National Film and Sound Archive, submission 40 p340

[51] M Donovan, submission 6 p51. Similar comments are in House of Representatives Standing Committee on Environment, Recreation & the Arts, Managing Australia's World Heritage, Canberra 1996, p181

[52] Fraser Island Defenders Organization/ J Sinclair, submission 43a p365ff.

[53] Tourism Council Australia, submission 57 p598

[54] W Williams, evidence 20 May 1997

[55] Queensland National Parks & Wildlife Service & Department of Environment, Benchmarking and Best Practice Program: user pays revenue, report for ANZECC September 1996 p23

[56] National Campaign for the Arts Australia Ltd, submission 37 p316

[57] The question depends on the elasticity of demand for Australia as a whole as a tourist attraction, and for particular attractions within Australia.

[58] For example, J de Horne (National Parks Association of Queensland), evidence 21 May 1997 p88

[59] Treasury, submission 20 p173-5; Environment Australia, submission 46 p396

[60] Australian Institute for the Conservation of Cultural Material Inc., submission 16 p142