At least 10,000 Australian Tourism Industry Council (ATIC) members are petitioning for the JobKeeper program to be extended to sustain tourism jobs.
The tourism peak body’s executive director, Simon Westaway, said retaining and extending the program was “an absolute priority” ahead of the federal government’s economic update on Thursday, and off the back of Victoria’s second wave of coronavirus cases.
“JobKeeper is doing the job intended for our heavily-hit tourism industry and all its associated businesses to retain their core workforce until visitor demand recovers,” Westaway said.
“The collective economic impact of our international border closure and changeable state and territory border constraints has smashed Australian tourism.
“Our industry needs far greater time than JobKeeper’s September deadline to allow for a meaningful recovery.”
Westaway’s comments come amid ongoing efforts to lobby government on the need to extend support for Australia’s under-siege tourism industry, led by the likes of the Australian Federation of Travel Agents (AFTA), and the Transport Workers’ Union (TWU), among others.
They also come as Victoria battles a surge in coronavirus cases, with the state confirming 275 new cases in the last 24 hours.
Unfortunate research by ATIC has shown the state’s stalled interstate tourism market will cost $147 million in weekly gross state product.
The tourism peak body is now calling for JobKeeper to be extended by at least six months or until international borders reopen, and for the program to include regular seasonal employees.
It is also calling for payments to be based on business turnover, instead of industry turnover, and for a review into the payment level to be maintained at $1500 per fortnight, but capped at a lower amount for employees who were not previously earning that amount.
The news comes ahead of Thursday’s federal government economic update, during which the future of the JobKeeper scheme – along with other key support payments – will be outlined.
According to The Australian, Treasurer Josh Frydenberg will outline the future of income support measures, after flagging that the $70 billion JobKeeper scheme would be extended as part of an extra round of economic support.
The scheme, according to the outlet, is likely to be targeted at industries like tourism and hospitality, which have been hardest hit.
Furthermore, it comes as the Commonwealth prepares to offer guaranteed loans of up to $1 million to around 3.5 million small businesses, in a move to stimulate the economy by lifting the cap on loans to $1 million from $250,000, The Australian reported.
The new loan guarantee for small to medium businesses will extend to June 2021, following Melbourne’s second coronavirus lockdown, which dampened expectations of a fast economic recovery.
This will come as the government prepares to reveal that the economic outlook has deteriorated on the back of the Victorian COVID-19 outbreak.
AHA, TAA report outlines potential importance of Commonwealth support
As the industry awaits this, the Australian Hotels Association (AHA) and Tourism Accommodation Australia (TAA) have released exclusive modelling outlining the economic benefits of aiding Australia’s hospitality and accommodation sector in response to the COVID-19 pandemic.
A draft report from Ernst & Young (EY), commissioned by the associations, focused on two policies to support the hospitality and accommodation sector: the extension of JobKeeper until March 2021 and the suspension of Fringe Benefits Tax (FBT) on accommodation, meal, beverage and entertainment expenses for three years.
AHA national CEO Stephen Ferguson said the report was critical to building the evidence base for continued economic support, which has been a key requirement of Treasury and government.
“The draft report shows that, depending upon final government policy settings, three of the four JobKeeper scenarios examined indicate economic returns range from 1.42 to 3.38 times the initial cost to government,” he said.
“In regard to suspending FBT, EY found that accommodation, meal and beverage entertainment only forms a relatively small portion of the total fringe benefits tax collected by the government, but suspending FBT for our sector would produce economic returns ranging from 3.25 to 3.81 times the direct cost to government.”
TAA CEO Michael Johnson said the need for additional assistance was clear, particularly as Victoria and NSW deal with a second wave of locally acquired coronavirus cases.
“The EY report noted that 84 per cent of businesses reported decreased revenue, with more than half (53 per cent) reporting revenue decreases of 50 per cent or greater – this is the highest proportion of any industry to report revenue decreases in this range,” Johnson said.
“The report also showed that female workforce participation in our sector is well above the national average with 60 per cent of workers being female, as well as high levels of employment for younger Australians, with 47 per cent of workers being under the age of 25.
“AHA and TAA research also shows that 15 per cent of businesses reported that their operations could be supported for less than a month with current available cash at hand.
“Worryingly, it also showed a national average fall in accommodation hotel room revenue of 77 per cent and a plunge in occupancy rates of 66 per cent.
“Forward-looking data shows occupancy rates below 50 per cent of capacity based on current bookings over the 90-day period from 15 June to 12 September.”
Featured image source: iStock/leremy