Direct cash an option to help tourist firms survive end of JobKeeper

Direct cash assistance to the nation’s struggling tourism operators is being considered by the Morrison government to help them survive the end of the JobKeeper wage subsidy next month amid fears it could trigger business closures and job losses.

The industry has warned the federal government it has about 10 days to come up with a final support package as tourism businesses need at least four weeks to cover redundancy provisions for staff who may be forced out of work when JobKeeper ends on March 28.

Broome’s Cable Beach, one of Australia’s international tourist icons. The Morrison government is looking at a special cash package to help the tourist sector.Credit:iStock

Senior government ministers have spent the week talking to tourism industry representatives, including major players such as Qantas Airways, which are desperate for a package for a sector dominated by mum-and-dad businesses.

Treasurer Josh Frydenberg talked in person this week with Qantas boss Alan Joyce and by phone with Virgin chief executive Jayne Hrdlicka about the situation facing the nation’s two largest air carriers.

The Easter holiday period is considered a critical time for hard-hit operators, including those who lost bookings over the Christmas and New Year’s period due to shutdowns in NSW and border closures.

The Morrison government has in effect ruled out extending JobKeeper. Instead, direct cash payments to enterprises are being examined, though other ideas such as revenue-contingent low-interest or zero-interest loans have also been floated by business advocates.

Australian Tourism Industry Council executive director Simon Westaway said businesses within two to three hours driving distance of major cities such as Sydney, Melbourne, Canberra and Brisbane were “doing OK” due to locals travelling within their home state.

But he said this accounted for about a third of the overall tourism market and the majority, reliant on interstate travel and international visitors, were struggling.

“Late December and early January with the northern beaches restrictions and the NSW and Queensland borders being shut really whacked forward and existing bookings,” he said.

“In some cases, they went from 100 per cent to zero. There are two or three speeds in the tourism industry right now … they didn’t all get the bounceback they expected [over Christmas/New Year’s].”

Bunnings was one retail outlet to benefit from the ban on international travel as customers spent their savings on home improvements. Credit:Wayne Taylor

A decision to lift the base payment was taken late last year but the debate within the government now is over its level, whether it should be rolled in with other welfare payments and if tighter restrictions on accessing JobSeeker should be imposed.

While the government has been concerned about state border closures, some parts of the domestic tourism industry and economy are benefiting from the effective ban on Australians leaving the country.

In December 2019, a net 226,000 people left Australia on short-term holidays on Australian Bureau of Statistics figures. In December last year, a net 6980 people left the country.

Economists estimate the international border ban has become a $25 billion stimulus, with money that would have been spent overseas now going into domestic bank accounts or to local retailers.

Expenditure on household and gardening goods alone climbed by more than 10 per cent during 2020.

Half-yearly results from Coles, Bunnings owner Wesfarmers and BCF parent company Super Retail Group referred to significant increases in spending due in part to travel restrictions.

Coles said customers were spending more time working, studying and staying at home, supporting demand in some product categories. Home and hardware giant Bunnings’ first-half revenue jumped 24.4 per cent to more than $9 billion.

“Travel restrictions and customers spending more time undertaking projects at home continued to support sales growth,” Wesfarmers managing director Rob Scott said.

Boating, camping and fishing store BCF’s total sales increased 50.9 per cent to $427.7 million “as COVID-19 restrictions eased and domestic tourism and leisure activity increased”, with Western Australia, Queensland and NSW performing strongest.

Prime Minister Scott Morrison on Friday said a rollout of the coronavirus vaccine would “change how things are down here in Australia”.

“I think it is a reasonable expectation that as time goes on, as the vaccination rolls out across the world and here in Australia, you should rightly expect that things will change in how we manage the virus,” he said.

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