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Treasurer hints at JobKeeper extension for tourism industry

June 25, 2020 Headline News No Comments Email Email

With travel industry and tourism bodies clamouring for an extension of government financial support beyond this phase of the Covid-19 crisis, Australia’s Treasurer Josh Frydenberg has given the strongest hint yet that support is under active consideration.

Questioned on the subject by Allison Langdon on Nine’s Today show yesterday, Frydenberg said: “Well the first thing to acknowledge is that some sectors will recover faster than others…

He continued: “When it comes to the aviation sector and the tourism sector, as long as those international borders are closed, those sectors will continue to do it tough. We have announced a package of support for the construction industry, particularly for new home builds as well as substantial rebuilds. We are working on a package of support for the arts sector. We’ve made an announcement about the extension of the instant asset write-off which will support small businesses and continued economic activity, so we’re looking at a host of options across the economy.”

Frydenberg would not be drawn on specifics, but the four sectors he mentioned were aviation, tourism, construction and the arts. He pledged that the government would make a specific  announcement about future support on 23 July – well before the expiration of the JobKeeper program in September.

The Tourism and Transport Forum of Australia (TTF) is calling for the JobKeeper scheme to be extended till March 2021 (three months less than AFTA has asked for), while Western Australian agents are asking their own state for a travel-industry-specific survival grant of between $5000-$25,000 through to June 2021.

The TTF has commissioned research which indicates the tourism industry is set to shed “tens of thousands” more jobs when the JobKeeper subsidy expires in September.

The research, conducted by Stafford Strategy, reveals monthly job losses for the industry will peak at over 130,000 in December 2020 carrying through to March 2021 if JobKeeper is not extended for tourism businesses well into next year.

In its submission to the JobKeeper Review, currently being undertaken by Federal Treasury, the TTF wants the subsidy extended to the industry until March 2021.

Federal Treasurer Josh Frydenberg

TTF chief executive Margy Osmond said the industry, both domestic and international, has been losing almost $10 billion per month since Covid-19 enforced lockdowns came into place – and all this coming off the back of a catastrophic bushfire season that decimated tourism reliant destinations across the country.

“While our State borders are gradually starting to reopen and people have either started to or are making plans to travel, any uptick in domestic tourism not be sufficient to fill the $4 billion black hole left by the lack of international inbound travel.

“The tourism industry has continued to support the Government’s response to Covid-19 and applauded their efforts to protect the health of Australians. But we are calling on the Federal Government to recognise the ongoing restrictions that have crippled tourism-related business and employees.

“While we understand the JobKeeper scheme cannot go on indefinitely tourism-related businesses have borne the brunt of government-ordered business closures and border closures.

“The seasonal nature of our sector means operators need more time to rebuild their businesses. Many will have no opportunity to do so unless JobKeeper is extended until March 2021.” To survive 2020’s perfect storm the industry must have further critical support.”

Stafford Strategy managing partner Albert Stafford said the job losses that would occur if JobKeeper is not extended for the tourism industry were quite alarming.

Below: Quarterly assessment based on research commissioned by TTF

“The sector is fighting for survival and real recovery won’t happen until full international travel reopens, which as we know is some way off. Ongoing Government assistance will be crucial if many businesses are to come out the other side and to keep people in jobs.”

AFTA has already told the government the extension of JobKeeper for eligible businesses in the travel sector until 30 June 2021 is critical.

AFTA’s latest submission to the Federal Government highlights:

  • JobKeeper is a lifeline for Australia’s 3000 travel agencies and 40,000 employees across every regional city and most regional towns;
  • An analysis shows that 98% of AFTA/ATAS members applied for and were successful in receiving JobKeeper, enabling their business to retain many trained and experienced staff;
  • The fact that even as domestic restrictions lift, revenues will remain constrained due to continuing border closures and restrictions, rising unemployment and consumer uncertainty.

MEANWHILE, with all other Australian states now offering targeted small business recovery grants, Western Australian travel agents are pleading with WA Premier Paul Papalia (who is also the Minister of Tourism and Small Business) to help them survive COVID-19 until the industry begins to recover next year.

Over 70% of WA travel agencies are owner-operated small businesses with extremely high female representation. The industry contributes about $2 billion annually to the state economy and employs 3500 people. Agencies in WA were experiencing boom conditions prior to Covid-19 restrictions, with year-on-year growth.

WA agents want a travel-industry-specific survival grant of between $5000-$25,000 through to June 2021. This grant would be on a scaled basis for agencies with a 50% or greater downturn, with current downturns ranging from 90-100% for agents.

Agents are currently working full-time with no business income to help West Australian consumers access travel credits and vouchers. AFTA points out that the challenges for local consumers are particularly vexed given most airlines, tour companies and cruise companies don’t have offices in WA or Australia so agents are spending hours on the phone for clients and non-clients while juggling multiple refund policy changes.

With COVID-19 continuing to have a catastrophic impact on agents, their teams, businesses and families, this week is the last chance WA travel agents have to call for aid before the state’s politicians take their one-month winter break until August.

“Travel agents play a critical role in keeping the wheels of West Australia’s economy turning and providing critical employment opportunities, including in regional communities,” AFTA Chair Tom Manwaring commented.

“However, without tailored government support while we get back on our feet, the future is bleak.”

Manwaring, a Western Australian, stressed that travel agents were resilient “and we know we will get through this just as we have with other major challenges.

“We know that our customers will keep on supporting us because Covid-19 has actually reinforced the value of a travel agent. But, we need the WA Government to step in and step up to support local travel agents and their businesses so that they can get through this.”

Written by Peter Needham

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