Hunter Valley Tourism

I gave my site report on Hunter Valley Tourism.  

Below are some screenshots of my handout.

How does Australia Compare?

On Tuesday, January 11, 2011, we went back to the University of Sydney to hear speakers Geoff Dow and Frank Stilwell.  Geoff Dow, Reader in political science and political economy at the University of Queensland, informed us how Australia measures up to different countries throughout the world.  He believes that unemployment is the most important indicator of an economy.  In the information packet he provided, Australia’s average unemployment for the 30 year period from 1974-2004 was 6.6%.  The USA was 6.2%; both countries were near the middle of the scale.  Spain had the highest unemployment rate at 13.2%, and Iceland had the lowest at 1.9%.  He chose the time period of 1974-2004, so that he could get a broad range of data and also did not want it to include the period during the global financial crisis.  Professor Dow emphasized that although Australia’s unemployment was at about an average level, they do not really have a working poor since their minimum wage is so high.

Professor Nesiba awarding Professor Dow
with a gift of appreciation

Another interesting variable that Professor Dow used to compare Australia to the rest of the world was the average annual hours worked per person.  Since we are visiting Australia during their summer holiday, it sometimes seems as if everyone is on vacation.  I found out that in 1979, Australians were working an average of 1831 hours for the year.  In contrast, Turkey lead the hours, with 2004 average hours worked during 1979.  Netherlands workers had the lowest hours with 1388 for 1979.  In 2009, Australia had moved down to 1690 average annual hours worked per person.  The United States was recorded at 1802 hours worked for 2009.  This difference is quite significant.  On average, an Australian worker is working 112 hours less than an American worker.  Professor Dow talked about the importance of vacation time and how it can contribute to job satisfaction. 

Professor Dow also compared different countries’ current account balances as a percentage of GDP.  The data used was the yearly average from 2001-2010.  He informed us that the current account balance should theoretically be at zero. Australia was sitting at -5.4%, while USA was -4.8%.  At the extreme ends of the spectrum, Iceland was -12.3% and Norway was +14.7%.  Budgets should be balanced, so that countries can have control on their spending and are not required to run deficits. 

One of the gorgeous sandstone buildings
on the University of Sydney campus

Professor Frank Stillwell spoke with us in the afternoon and talked about the concept of the “lucky country.”  Many people label Australia as the lucky country because they have such a high quality of life, but in some ways operate as a developing country.  They were not hit as hard as others during the global financial crisis, which was partly due to the demand for resources from China, their stimulus program, and their continued population growth.  Professor Stillwell was a very dynamic speaker and was not afraid to address any of our questions and concerns regarding Australian economics.

During World War II, Australia had an increased development of their manufacturing sector.   Following the economic boom of the 1950’s, Australia began exporting numerous resources to Japan.  By the mid 1970’s, Australia experienced a major economic crisis and suffered from stagflation.  In the 1980’s, the financial sector expanded and they also experienced manufacturing decay and restructuring.  In the past 20 years, they have started to recover partly because China is now demanding many of Australia’s natural resources.  The economic crisis of 2008/2009 had some effect on Australia, but not nearly as dramatic as the impact it had on United States.

Australia’s GDP has increasing gone up in the past 5 years.  Also, inflation has greatly affected Australia.   In the past year, the Australian dollar has appreciated by 19%.  Australia’s primary trade and finance partners today include China, Japan, and Korea.  Most of what they are exporting is coal, iron ore, and gold.

Throw Another Steak on the Barbie

On Monday, we went to the University of Notre Dame – Sydney and listened to the Executive Dean of Arts and Sciences, Gerry Turcotte.  He described the formation of UND-Sydney and spoke about the importance of international students.  University education is considered an export for Australia, because they are providing services to students from other countries.  The international students have to convert their money into Australian dollars and they put that money into the Australian economy.  Sean Lennon, Director of Study Abroad Network, told us that the rising price of the Australian dollar and the immigration and visa policies are challenging this export.  The Reserve Bank Bulletin – June 2008, shows that the export value of education rose from 2.9 in 2000 to 5.9 in 2007.

According to The University of Notre Dame - Australia website, the university was “founded through an Act of the Parliament of Western Australia in December 1989, and now has over 7000 students enrolled on its three campuses in Freemantle, Sydney and Broome” (www.nd.edu.au).  The only other private university, Bond University located along Queensland’s Gold Coast, was opened in May of 1989 (www.bond.edu.au).  “Modelled on the traditions of the world’s most elite educational institutions, the vision for Australia’s first private, not-for-profit university (Bond) was to provide an exclusive educational experience of the highest international standards, under the tutelage of the country’s leading academics.” Both universities receive public funding and are aided by the state and federal governments.  This differs from the private universities in the United States, because those in the United States rely on private donations in order to start up and continue operations.  The difference is most likely due to the lack of educational opportunities in Australia.  Because the United States is an older country than Australia, it has older and more established universities.

In Australia, there is no distinct separation of church and state.  This allows the University of Notre Dame in Sydney to receive governmental aid.  Not only did they receive land from the government in order to build their Sydney campus, but they also received funding in order to keep the university running.  Sean informed us that the Education Abroad Network also receives some money from the government to recruit international students to come to Australian universities.

For Monday’s supper, we ate at a restaurant called Phillip’s Foote.  The whole class enjoyed the historic atmosphere and the surrounding area.  The restaurant had a very rustic feel and we even got to grill our own meal.  There was a case of steaks, which you got to pick from and then grilled your meat on a big open grill out back.  After our steaks were cooked, we then had numerous choices from the salad bar.  My steak and 

the fresh fruit was delicious, and I left there feeling completely satisfied!

Exploring Sydney

We had free days in Sydney this weekend, so I did some exploring.  After class on Friday afternoon, I went shopping along Bondi Beach.  Most of the stores were just small beach shops, but it was still fun to look around.  Later that night, the whole class had a grill-out.  This was the second grill-out that we have had this week and the food was so good.  We had grilled sausages, fruit salad, chips, and cake.  I also tried a passion fruit for the first time which was kind of an experience.  One that I broke into was extremely sour and I couldn’t even make a straight face while attempting to eat it.  Since our housing has a grilling area right outside, it is very convenient and cost effective to do what we call “family meals.”  I love how close I have become with all of my classmates, and I am proud that we choose to hang out with each other, even when there is not a planned class activity. 

On Saturday, I ventured to Paddy’s Market to find some souvenirs.  The place was packed, but they had great deals so I ended up with quite a bit.  At first we were confused on how to get there, but we talked to a few locals and finally found our way.  The market was filled with just about everything.  Part of it was set up with fruits and vegetables, while the other section included clothes, shoes, bags, jewelry, and just about any kind of souvenir you could imagine from Australia.  After finishing at Paddy’s Market, we explored the shopping mall above the market.  Since it is located in China Town, of course their food court was filled with Chinese restaurants.  That is one thing I am going to miss after returning home, awesome Asian food!   

On Saturday night, I went to Sydney’s Festival First Night.  This was the kick-off for a festival held every year that celebrates the arts of Sydney.  We went to Arrested Development, and I was amazed at how many people could pack into Martin Place!  Everyone seemed to be having a great time and enjoyed the musical entertainment. 

On Sunday I decided to go back to Paddy’s market with a couple of classmates that hadn’t gotten a chance to go yet.  Getting there was definitely a lot easier the second time around.  After the market, I came back to get ready for my big night out.  Seven other girls and I went to Le Grand Cirque at the Sydney Opera House.  The Opera house was amazing both inside and out, plus as an added bonus we had a great view of the Sydney Harbor Bridge.  The show was awesome and kept me on the edge of my seat.  I always wonder what would happen if one of the performers misses a step and comes crashing to the ground.  On the way home from the opera house, we stopped at a restaurant along the harbor and shared a couple of plates of dessert.  It was delicious and a great way to top off our weekend!

Overall it was a great weekend, and I am happy that I had some free time to explore.  Even though it rained on and off all weekend, I still found activities to keep me busy.  It is hard to believe that I only have about four days left in this amazing city.  Until we leave I am going to try to make the most of everyday and soak up as much Sydney sun as possible.

Australian Currency

On Friday, Jan 7^th, we visited the US Consulate and the Australian Central Bank.  At the US consulate we learned that the relationship between the US and Australia is very positive and that Australia has helped the US in nearly every war that we have been a part of.   Our speaker said that Australia and the US “grew up together” and have had a formal relationship since 1940.  According to the US-Australia Free Trade Agreement article, the trade agreement with Australia “is the most significant immediate reduction of industrial tariffs ever achieved in a US FTA, and will provide benefits for America’s manufacturing workers and companies.”  The free trade agreement has been especially significant for the winemaking industry.  The Wine to the USA article states, “Tariff reductions through the free trade agreement are important in price competitiveness, including in relation to Chilean and South African competitors given the FTA tariff reductions being implemented.”  The speaker also told us about his career in foreign relations and the different functions of the consulate office.  They renew US citizens’ visas, provide emergency services, document babies born abroad, and help US citizens who incur criminal charges abroad. 

After leaving the US Consulate Office, we went to Australia’s Central Bank.  Richard Finlay, a Senior Economist at ACB, spoke to us about the responsibilities and objectives of the Reserve Bank of Australia.   The article on the Reserve Bank of Australia states, “Monetary policy decisions involve setting the interest rate on overnight loans in the money market.”  This act keeps the economy stable and efficient.  Their objectives are specified in the Reserve Bank Act of 1959 and include “the stability of the currency of Australia, the maintenance of full employment in Australia, and the economic prosperity and welfare of the people of Australia” (RBA). 

The global financial crisis affected Australia, but not to the extent that it had affected America.  In the article, “Australia: Moving to a Seamless National Economy,” it is said that “Australia was the first G20 country to increase interest rates in the second half of 2009 in response to emerging inflation risks.” In contrast to America, Mr. Finlay told us that because Australia has a very strong economy, they must set the interest rates high in order to keep the economy stable and not let it get out of control. 

Australian exports to China have greatly improved in recent years and are making dramatic effects.  According to the Reserve Bank Bulletin-June 2008, “While there has been a significant slowdown in the pace of growth of each major export category since 2000, the sub-categories of coal and iron ore as well as education exports are notable exceptions, having broadly matched or exceeded their 1990’s average growth rate.”    

There are many distinct differences between the US Federal Reserve System and the Australian Central Bank.  Mr. Finley informed us that Australia’s job is easier because they have a smaller economy so it is therefore easier to control.  He also told us that the relationship between the Treasury and the Fed is more distant in America.  Also, Australia has more business professionals from various industries sitting on the Reserve Bank Board. 

Before leaving Australian Central Bank, we walked through their currency museum.  It was interesting to see how their currency has evolved over the years and what each bill represents.  So often we exchange the currency for goods, but rarely do we actually study the currency to see what kind of historical information it represents.  

Australian Tourism

On Thursday, January 6^th, we went to the Tourism Australia office.  Rachel Crowley, the General Manager of Corporate Communication, gave a very interesting talk about Australia’s tourism industry.   Tourism is extremely important to the Australian economy as it brings in visitors from throughout the world to spend their money in Australia.  Foreign tourists are especially important because they tend to stay longer and spend more money in Australia while they are here.  Rachel discussed the extreme importance of airlines and how they have affected tourists from visiting Australia.  Years ago there were only two airlines that flew into Australia, so the prices were extremely high.  In recent years, more airlines offer this flight, so consumers have a better opportunity to visit Australia and may not automatically exclude this destination after looking at the price.  Also, the Australian dollar has appreciated to a 1:1 rate against the American dollar.  Because of this, US citizens are less likely to visit Australia.

Most Australian tourists come from New Zealand, the United Kingdom, the United States of America, and China.  Recently, Chinese tourists have been increasing at a great rate and opened up a massive market for Australia to utilize.  Some of the most popular places these tourists choose to go are Sydney (Harbor Bridge & Opera House), the Great Barrier Reef, and Ayers Rock.  Many find Australia appealing, because they see it as dangerous, exciting, and a chance to experience nature. 

The demand and supply diagram below shows how the Australian dollar is going to affect Australia’s overall economic graph.  As the demand for the Australian dollar moves outward, the quantity also increases.  Therefore Australia’s exports increase, so tourism also increases. 

 One of the big factors affecting Australia’s tourism is the influence of Oprah Winfrey.  She chose to give 300 audience members the trip of a lifetime by providing them with an action packed adventure in Australia.  Because of her huge influence, Oprah will encourage many others to travel to Australia and experience the same adventures that are aired on the four episodes shot in Australia.  The first Australia show airs on January 18^th, and Tourism Australia believes they will soon see a great increase in tourists.  People will have the option of choosing “Oprah adventure packages,” so that they can experience the same adventures that Oprah and her audience did during their stay.  

History of Australian Economics

On January 5^th, we attended a lecture by Evan Jones, who is a retired economics professor from the University of Sydney.  When Australia was first founded, they used the land to house convicts.  After 1788, the area started to be settled by whites traveling from Europe.  Today, most of the immigrants are from the South Pacific, who come to the region for higher education.  At Australia’s beginning, they were in the production of wool, sealing, and whaling.  They would export most of these products to Britain, but they currently export many of their products to China, Japan, Korea, India, and the United States. 

Imperialism is the concept of one nation ruling over another and establishing their economy.  When Australia was ruled by Britain, Britain not only controlled who entered the country, but also controlled the types of imports and exports that went throughout. 

During World War II, Australia had an increased development of their manufacturing sector.   Following the economic boom of the 1950’s, Australia began exporting numerous resources to Japan.  By the mid 1970’s, Australia experienced a major economic crisis and suffered from stagflation.  In the 1980’s, the financial sector expanded and they also experienced manufacturing decay and restructuring.  In the past 20 years, they have started to recover partly because China is now demanding many of Australia’s natural resources.  The economic crisis of 2008/2009 had some effect on Australia, but not nearly as dramatic as the impact it had on United States.

Australia’s GDP has increasing gone up in the past 5 years.  Also, inflation has greatly affected Australia.   In the past year, the Australian dollar has appreciated by 19%.  Australia’s primary trade and finance partners today include China, Japan, and Korea.  Most of what they are exporting is coal, iron ore, and gold. 

  

Australian Coal Production

On Tuesday, November 4^th, we studied coal mining operations in the Hunter Valley.  To start out the day, we went to an open mine called Rio Tinto with our hostel director Nigel.   Nigel has spent a lot of time in the mining industry, so he was very insightful.  We stood on a look-out which gave us a view of the whole operation.  He explained how the process worked and also emphasized the importance of coal in the Australian economy.  Nigel told us that most of the coal mined in Australia is sent out to Asian countries, especially China.  Since the coal needs to travel a great distance to get to Asia, there needs to be an effective way to do it. 

When we visited Port Waratah Coal Services, Brian McMahon showed us how they transport the coal from the mine to the consumer.  The PWCS operates 2 coal terminals, which are both located at the Port of Newcastle.  According to the handout we received from Brian, “demand for coal through the Port of Newcastle has grown by more than 32% over the past decade.”  This shows the increasing demand is helping Australia’s part in the global economy.

We also visited the Macquarie Generation Power Station to find out how they convert coal into electrical power.  Our tour guide at the power plant told us that they burn nearly 300 tons of coal each hour.  Some of this power is used to power the city of Sydney, which requires the equivalent of nearly half a million tons of coal per day. 

Australia is the world’s biggest exporter of coal, but with climate changes their mines may be at risk.  Increased flooding makes mining extremely difficult, because they are unable to efficiently operate in a wet environment.  Also, there are increasing protests against the mining industry.  According to Kathy Mark’s article, Australian town confronts hidden costs of mining boom, many residents who live near mines have many environmental and health concerns.  Because of their increasing apprehension, mining may be downsized or forced to develop a cleaner way of doing it.  That is the one struggle right now for governments, production companies, and local residents.  Until all conflicts can be resolved, the mining industry may not be fully efficient.

Wining and Dining

On Monday, January 3^rd, we visited two separate wineries in the region of Hunter Valley.  This area is located about two hours northwest of Sydney.  While in this area, our group stayed at a hostel for two nights.  Staying at the hostel was interesting, because we slept in bunk beds, there was no air conditioning, and everything was cooked outside on the grill. 

We started out on Monday morning with a wine tour at Tyrell’s winery.   The director gave us a tour of the vineyard and explained the process of creating the wine.  We tried grapes straight off the vine, which were extremely sour!  Then we were given the chance to taste many different varieties of wines.  He gave us two glasses at a time, so that we could compare and contrast the different types.  Tyrell’s has been a family owned winery for 150 years.  Their facilities are very rustic and make visitors feel as if they are family.

After leaving Tyrell’s, we went to a Thai restaurant that was connected to the Tempus Two Winery.  At Tempus Two, we sampled many more wines.  During the wine tasting, we found out how to properly spin and taste the wine.  Tempus Two has a modern feel and conveys a completely different message than Tyrell’s.  They are focused on satisfying consumer tastes and appealing to them through new flavors and modern labels. 

Both of the wineries have been given the opportunity to utilize the internet in order to connect with their customers.  Not only can customers order wine online, but they can also check out upcoming events and what is new.   Because the two wineries give customers the option to order online, globalization has been achieved.  One downside that this may have is customers not getting the whole experience of coming to the actual winery. 

In Perkins’ article, Global Vineyard, he claims “although some growers may find different grape varieties that are suitable to the new climate regime, environmental conditions in some famous grape-growing regions may turn too hot or too dry to support vineyards.”  Many of the Hunter Valley vineyards may not be able to grow the same types of grapes they have in the past.  They need to find a way to maintain their current customers and appeal to new customers.  If possible, the wineries should try to keep some of their signature flavors but yet be willing to try others as they cope with the climate changes.

Great start to a new year!

New Year’s Eve in Sydney was fabulous!  Our group started walking to Rushcutters Bay around 5:30 p.m.  Along the way there were so many people out walking the streets.  It was very interesting to see how busy the city is during this holiday.  The whole atmosphere was very laid-back and party-like.  I could tell that people had been waiting all year round for the massive celebration.

When we arrived at Rushcutters Bay, we had a picnic and relaxed.  Numerous groups were present at this site and it seemed very family friendly.  Children and adults were all enjoying the ambiance of the night.  Later on in the night, a DJ started playing music near our spot on the bay.  Most of us went over and enjoyed the dance party.  Even on the dance floor there were multiple languages being spoken, but I could tell that everyone was having a great time. 

Fireworks went off at 9:00 pm and then a large display at midnight.  People from all backgrounds and regions of the world gathered together to look up at the amazing show.  I find it fascinating that many travelers come from so far away to take part in this celebration.  We had an excellent view of the Sydney Harbor Bridge and the Sydney Opera House from our bay, which made the experience even more remarkable.  Fireworks were shot off the bridge and even off the roofs of nearby buildings.  I would like to know how much money was spent on this year’s fireworks

This event brings enormous amounts of revenue into Sydney.  Although the fireworks display is free to the public, visitors and even Sydney citizens end up spending money within Sydney during the celebration.  Whether it is visiting bars, eating at restaurants, or staying in a hotel room, New Year’s Eve travelers spend quite a bit of money during this celebration.  According to Sydney Media, in 2009 “International visitors stayed an average of 16 nights in Sydney over the New Year period, while Interstate visitors stayed an average of 8 nights.”  I wonder how much total revenue Sydney received on this one night alone. 

New Year’s Eve is extremely important to Australia’s economy, because of the millions of visitors it draws.  Without this large event, I am unsure as to how Sydney’s budgeting would change.  I am curious about what city services would have to be cut in order to compensate for the millions in lost revenue.  Also, other areas of Australia benefit from the celebration because many tourists will take the opportunity to visit other parts of Australia during their vacation.