Please read the case study and answer question 1

Case study: Business Council of Australia scenario summaries from Aspire Australia 2025 The following are extracts from three scenarios presented in Aspire Australia, a pub- lication from the Business Council of Australia that uses the scenarios as a planning tool. While the extracts here are not a full recount of the original scenarios, they provide an insight into some of the hypothetical scenarios that are used in Scenario Planning. Readers are referred to the full document listed in the references for the complete scenario details. Read the case studies and consider how a tourism operator would need to respond to each scenario. Scenario 1: Riding the Waves In 'Riding the Waves, governments - both Federal and State - know that further reforms are needed to improve the effectiveness of spending and grow the economy: labour markets, welfare, taxation, superannuation, water rights are all in need of reform. However, a combination of electoral pressure, especially given the rise in single issue interest groups, and a chronic lack of coordination in the political process, brings some to the realisation that Federal and State Governments have not made the necessary hard decisions needed to address the growing problems. Key areas of progress have included reforming the labour market, reducing tariffs, floating the exchange rate, deregulating the financial sector, reforming corporate governance, taxation reform, developing a national competition policy, reforming financial regulation and introducing new frameworks for monetary and fiscal policy. Inconsistencies between states in the application of their regulatory frameworks, dif- ficulties with competition reform, and lack of coordination between levels of govern- ment were all noted as major impediments to the creation of a sufficient infrastruc- ture network for Australia. As pressures mount, and Australia's rate of economic growth diminishes, govern- ments are left with no choice but to cut spending and increase taxes, even in the face of a dire need to shore up infrastructure and services. Australia's obvious decline, undermining the long-held view that we are the lucky country, galvanises political and community debate away from local issues to national interests. Scenario 2: Stormy Seas In 'Stormy Seas, an initial period of high growth gives way to a sustained decline in Asia Pacific stability and security, challenging Australia's international and economic relations. In the early years of this scenario, high Chinese economic growth helps to fuel the Australian economy. China's growth benefits the island states of the South Pacific through generous aid programs, and Beijing becomes the region's largest donor. Canberra worries about stability in Asia and the South Pacific and, in particu- lar, whether this will create a larger illegal immigration flow in future years. Our ties with China and the US overcome worries about the fragility of our nearer neighbours, while our economic strength reinforces the view that Australia's national qualities will protect us from regional shocks. The decline in Asia Pacific stability weakens the region's economic prospects and erodes Australian markets. However, just as growth in the economy starts to contract, security concerns force Canberra to increase the level of defense and counter-terror- ist spending. The region would significantly benefit from stable economic growth, a declining rate of corruption and inefficiency in government and by working hard to avoid military conflicts. Scenario 3: Changing the Crew In 'Changing the Crew', a new generation of pioneers creates a sharper-edged Aus- tralia, resulting in friction with other generations. Australians are more strongly con- nected with the rest of the world than ever before, economically and culturally. The new crew include The Armchair crew 65 to 84 years old (2.4 million in 2001); The Cockpit crew 45 to 64 years old (4.2 million in 2001); The Foredeck crew 25 to 44 years old (5.9 million in 2001). The way of the Foredeck crew is to build up the asset of themselves, and to act swiftly to apply new ideas and technologies to capture projects, niches and fleeting but potentially lucrative market opportunities. The Foredeck crew and the following gen- eration are comfortable with the notion of establishing businesses, running them hard for a period, and then moving on to the next opportunity. The Foredeck crew favours the continuous adjustments and opportunities created by markets, rather than government interventions in economic activity and associated lobbying. The resources sector, once looked down upon by some promoting the adva ement of Australia, becomes an unexpected source of wealth for the government and business as the relative price of minerals and energy increases compared to the price of manu- factured products. Workforce pressures, particularly the need for skilled professionals, language skills and overseas connections, and the desire for reciprocal opportunities overseas, mean that the Foredeck crew, as they take over, push strongly for increased immigration. The country has had a more successful generational transition than the US, Europe and Japan, in part because of smaller numbers in the Cockpit crew, and because of growth opportunities in the region. Acknowledgement: The authors would like to thank the Business Council of Australia for allowing the above extracts to be used in this text. For more Information: Business Council of australia (2004) Aspire Australia 2025: Change is Inevitable. Progress is Not, 15 March, viewed 05/04/2020, https://bea.com.au/scenarios-for-australia-next- 20-years Discussion Question: 1. Read the case study above and consider how a tourism operator would need to respond to each of the three scenarios