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Uncertainty for Australian tourism following Treasurer Frydenberg’s Federal budget

Uncertainty for Australian tourism following Treasurer Frydenberg’s Federal budget
May 12, 2021

Among sectors missing out in Federal Treasurer Josh Frydenberg’s 2021/22 budget, the underlying assumption that borders will not reopen until some time in 2022 will continue to impact tourism.

Much of the spending listed in last night's budget - including the $1.2 billion tourism package  was already known and has already been initiated, such as the Federal Government's half-price airfares offer on 800,000 tickets.

Treasurer Frydenberg did not lay out a rough timeline of when international borders will reopen, only that containing COVID-19 outbreaks will be a "key factor" in the timing of opening borders while the spending in the 2021/22 budget is seen as inadequate to cover the losses felt by tourism operators and airlines alike for having closed international borders.

Budget papers advised “the continued economic recovery will rely on the effective containment of COVID-19 outbreaks both here and abroad and will be a key factor in the timing of the reopening of international borders, which could weigh on the outlook for the tourism and education sectors.”

Stating that the situation has become “border roulette”, Tourism and Transport Forum Chief Executive, Margy Osmond told the Sydney Morning Herald “everyone in the (Federal) Government’s got a different attitude about when the border will reopen.

“We can’t recover without international borders being open, they need to address certainty and then skills and the level of support for things like attractions, otherwise they’ll go under and there will be nothing left for tourists to come and see and no staff to serve them when the border eventually does reopen.”

Australian Tourism Export Council Managing Director, Peter Shelley said tourism has continued to be “one of the solid performers of the Australian economy”, despite the challenges of the past 18 months from bushfires to floods and the pandemic.

Shelley advised “rather than bounding out of the starting blocks once international borders reopen, our tourism industry will limp along, struggling to bring our lucrative inbound visitors back to our shores

“With clarity of ongoing support, we can ensure all industry survives through this crisis and comes out the other side ready for the new world of travel. Our challenge right now is knowing if these businesses will continue to be supported until borders re-open.”

Australian Tourism Industry Council Executive Director, Simon Westaway said more targeted Federal support for impacted tourism enterprises, regions and cities due to the hard-closed international border, is the unfinished business from this budget.

Stating that the Budget outlook for Australia’s international border, beyond New Zealand, only ‘gradually opening’ through 2022, does not give any confidence to the sector, Westaway noted “tourism remains one of the most affected sectors in Australia’s impressive economic recovery. It remains impacted by consumer concerns and disruptions to interstate travel due to regulatory restrictions.

“The Federal Budget outlook indicates no foreseeable international market recovery for Australia’s visitor economy, and this sadly spells further tourism business and job losses.

“Australian tourism’s economic value more than halved during the pandemic and was the largest job-shedding sector. Recovery has still some way to go for many.

“Low national COVID-19 vaccination rates need to be rapidly lifted urgently, to enable industry to work constructively with the Government on a safe, if staggered, future border re-opening timetable.

“ATIC welcomes the Budget’s commitments to measures which fast-track the national vaccine rollout, small business tax and support measures and bolstered traineeship funding.

“Tourism depends on the capacity of thousands of small businesses delivering our tourism experiences. The Budget’s extension of the provisions to fully expense depreciable assets and loss carry-back will be welcomed by tourism business.

“ATIC supports ongoing, strong funding to Tourism Australia. The national agency will play a critical demand-driving role when Australia can again welcome overseas visitors, backpackers and students.

“We continue to urge more engagement between industry and government around the current challenges, including labour market and skill issues that will affect the recovery of the tourism, a sector that is critical to Australia’s sustainable growth."

No support for Sunshine Coast Stadium
Also missing out from the budget was Sunshine Coast Council’s plea for Federal Government funding for the expansion of Sunshine Coast Stadium.

The Council had been seeking a $20 million commitment from the Federal Government, which, on top of fund a combined $11 million commitment from local philanthropists Roy Thompson and Rod Forrester would have delivered the $68 upgrade.

The Queensland Government ($20 million) and Sunshine Coast Council ($17 million) had already committed funds for the project which would have expanded the stadium's capacity to more than 16,000.

Student Working Visas
The budget also contained a measure that will help international students who remain in Australia to work in industries including tourism and hospitality.

While continued international border closure until 2022 generally mean students cannot come or return to Australia to study, the Federal Government is allowing those who are already here to work more hours.

Adding tourism and hospitality to sectors eligible for the subclass 408 COVID-19 Pandemic event visa, the previous fortnightly limit of 40 hours of work for international student visa holders with jobs in hospitality and tourism is going to be scrapped temporarily.

Advice from the Federal Department of Home Affairs states "for the tourism and hospitality sector, the definition also includes work for employers whose primary purpose is to directly provide a service to tourists."

Click here for more information.

Images: Gold Coast Airport (top) and the concept for the expansion of Sunshine Coast Stadium (below).

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