Federal Government support for tourism extended

A $1.2 billion tourism and aviation support package was announced last week by the Morrison Government, which generated quite a lot of media attention.

Key facts:

  • The ABS estimates around 611,000 people are employed by the tourism sector
  • Domestic tourism is worth $100 billion to the Australian economy
  • The latest National Visitor Survey estimates by Tourism Research Australia show positive signs with Queensland (up 10 per cent), Western Australia (up 5 per cent), Tasmania (up 47 per cent) and the Northern Territory (up 32 per cent) seeing an increase in intrastate spend in September quarter 2020.
  • Around 2.7 million individuals across around 650,000 businesses have now graduated from JobKeeper
    • The sectors impacted by continued international travel restrictions as well as state health-based restrictions had the highest proportion of zero or low hour JobKeeper workers in December – around 20% were in the sectors of Cafes and Restaurants, Travel Agencies and Tour Arrangement Services, Accommodation, and Air and Space Transport
  • Various industry groups have been consistent in their advice: just some examples include the Tourism and Transport Forum, the Australian Tourism Industry Council, AAT Kings Group, Australian Industry Group, the Australian Chamber of Commerce, Cairns Airport), consistent border policies add to consumer confidence which boosts the aviation, tourism and hospitality industries that have been hurt most by the pandemic
  • To date for the tourism sector, the government has put forward:
    • The $1 billion COVID-19 Relief and Recovery Fund which included tourism specific measures such as Supporting Australia’s Exhibiting Zoos and Aquariums program ($94.6 million), Business Events ($50 million), and many programs for the arts sector
    • The Recovery for Regional Tourism (RRT) program ($50 million)
    • Regional Tourism Bushfire Recovery grants ($10 million)
    • National Tourism Icons Program ($50 million)
    • $128m for travel agents
    • The ‘holiday here this year’ marketing campaign
  • The Federal govt has also:
    • Invested more than $2.7 billion in aviation support programs that have ensured the continued operation of flights to around 120 locations across Australia throughout the pandemic, supporting a larger route network than would be commercially viable and maximising opportunities for continued employment

The latest $1.2 Billion package includes:

    • To run from 1 April to 31 July
    • Increased number of flights to an initial 13 regions (the Gold Coast, Cairns, the Whitsundays and Mackay region (Proserpine and Hamilton Island), the Sunshine Coast, Lasseter and Alice Springs, Launceston, Devonport and Burnie, Broome, Avalon, Merimbula, and Kangaroo Island
    • 50 per cent discount on domestic fares – travel to and from the locations will be subsidised
    • The chosen regions/routes are based on being reliant on tourism for Gross Domestic Product and particularly dependent on aviation for tourism during April to July
    • Demand driven number of tickets, and locations the flights will depart from, but estimated average of 46,000 discounted fares per week
    • To snap up one of the government’s half-price tickets, simply jump online to your airline’s website from 1 April and reserve your seat
      • It’ll be any air operator who has operated the routes (and any other we may come up with in the near future) in the previous 2 years – by in large it will be Qantas, Virgin, Jetstar and a handful of other small regional operators who may wish to opt in
    • Loans must be approved between 1 April 2021 and 31 December 2021
    • Up to $5m 10 year loans with 24 month repayment holidays eligible to businesses that have graduated off JobKeeper between 4 January and 28 March
    • An eligible loan under the Scheme can take any form of credit (including overdrafts, working capital and revolving facilities, leases or hire-purchase arrangements), with the exception of a credit, debit, charge card or business card facility. Loans may be used to refinance any pre-existing debt of an eligible borrower.
    • Part of the Government’s commitment to support up to $40b in lending to SMEs
    • Financial support from 1 April to 31 October (when international flights are expected to resume)
    • Support will help airlines to maintain an agreed core international capability (crew and aircraft) based on pre-COVID international passenger services
    • The support will keep 8600 international aviation employees in work and ready to be deployed, as well as planes in flight-ready condition across both airlines and is proportionate to the level of pre-COVID international passenger services ran by each airline, excluding the Trans-Tasman route
    • As a condition of receiving support, each month Qantas and Virgin will be required to provide an assurance to government that it will maintain a set level of international flight readiness.
    • To run from 29 March to 30 September
    • Cover the cost of ground handlers maintaining their mandatory training, certification, and accreditation
    • Expectation that it will cover 30 per cent of ground handling companies pre-COVID workforce. Means they’re ready to stand back up when the market expands again

The Federal govt. is also extending several existing programs:

    • To run for a further three months to 30 September
    • Ensuring we have flights that can export Australian goods to overseas markets
    • Extended by three months
    • Covering up to 50 per cent of costs incurred in participating business events during the 2021 calendar year
    • Extended by six months
    • Support zoos, aquariums and wildlife parks to maintain their animal populations where their tourism revenue has been affected by travel and social distancing restrictions
    • To run for a further three months beyond 13 March
    • One-off grants to help travel agents and tour arrangement service providers stay viable

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