All the details, all the reactions: Federal government’s $1.2bn tourism support package explained

Brown gift box on australian dollar background

After much anticipation, the federal government has finally released the details of its new $1.2 billion support package for Australia’s tourism industry.

Prime Minister Scott Morrison said that while Australia’s economy had recovered 85 per cent of its fall from COVID-19, the next step in the government’s National Economic Recovery Plan would target the businesses, workers and regions still doing it tough.

Morrison said the package’s mix of half-price airline tickets, cheap loans for businesses and direct support to keep planes in the air, and airline workers in their jobs, would be a bridge to a more normal way of life for Aussies.

“This is our ticket to recovery – 800,000 half-price airfares to get Australians travelling and supporting tourism operators, businesses, travel agents and airlines who continue to do it tough through COVID-19, while our international borders remain closed,” he said.

“This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard.

“That means more jobs and investment for the tourism and aviation sectors, as Australia heads towards winning our fight against COVID-19 and the restrictions that have hurt so many businesses.

“Our tourism businesses don’t want to rely on government support forever. They want their tourists back.

“This package, combined with our vaccine roll-out which is gathering pace, is part of our National Economic Recovery Plan and the bridge that will help get them back to normal trading.”

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the measures would work hand-in-hand to boost interstate tourism and aviation in key regions significantly impacted by the loss of tourists.

“The new Tourism Aviation Network Support (TANS) Program will give Australians clear incentives to travel to key domestic tourism areas,” the Deputy Prime Minister said.

“Discounts will be offered on tens of thousands of fares per week across an initial 13 key tourism regions.

“We’re working with airlines to increase the number of flights to these tourism areas, giving travellers the flexibility needed when organising dream holidays to destinations such as Tropical North Queensland and Kangaroo Island.

“In a big win for local communities, especially in regional Australia, we will continue to financially support flights which are so key to health services, employment opportunities and social activities.

“We’re also backing the workforces of our international airlines and the teams and infrastructure they need so that when tourism takes off again and our borders reopen, our airlines are ready to go.”

The half-price ticket program will initially operate to 13 key 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.

Flights, routes and the total number of tickets will be driven by demand and are subject to final discussions with the airlines. The discounts will be off the average fare and will be available on airline websites from 1 April.

Image source: iStock/anilakkus

Other new measures in the support package include new international aviation support to help Australia’s international passenger airlines maintain more than 8,000 core international aviation jobs.

Furthermore, there is support for regular passenger airports to meet their domestic security screening costs, and a new Aviation Services Assistance Support Program to help ground-handling companies meet the costs of mandatory training, certification and accreditation to ensure they maintain their workforces until the market expands again.

The government will also reinstate domestic aviation security screening cost rebates for more than 50 regular passenger airports.

The government’s ‘SME Loan Guarantee Scheme’ will be expanded and extended as part of its commitment to support up to $40 billion in lending to small- and medium-sized enterprises.

Under the existing scheme, more than 35,000 loans worth more than $3 billion have already been provided.

The new-look ‘SME Recovery Loan Scheme’ will be targeted and tailored to support those businesses that have been relying on JobKeeper during the March quarter.

It will benefit from an increased government guarantee, increasing from the current 50/50 split between the government and the banks to an 80/20 split.

The expanded scheme will also increase the size of eligible loans, increasing from $1 million under the current scheme to $5 million.

Businesses with a higher turnover will also benefit under the expanded scheme, with the maximum eligible turnover increased from $50 million to $250 million. Maximum loan terms under the expanded scheme will also be increased from five to 10 years.

The expanded scheme will also allow lenders to offer borrowers a repayment holiday of up to 24 months. The scheme will also be able to be used by eligible businesses to refinance their existing loans.

More than 350,000 current JobKeeper recipients are expected to be eligible under the expanded scheme. Loans will be available from 1 April 2021 and must be approved prior to 31 December 2021.

Treasurer Josh Frydenberg said this latest package of measures was all part of the government’s National Economic Recovery Plan.

“We know there are sectors and regions across the country that are continuing to do it tough, which is why we will continue to support the economy with proportionate, timely, scaleable and targeted assistance,” the Treasurer said.

“Our support for the aviation sector will not just keep planes in the air, but will also provide a boost to domestic tourism while our international borders remain closed.

“This SME Recovery Scheme is part of the next step in our plan to help small businesses stand on their own two feet as the economy recovers from COVID-19.

“The expansion and extension of the loans will back businesses that back themselves, and will help businesses who continue to do it tough build a bridge to the other side of the crisis and keep their staff employed.”

Minister for Trade, Tourism and Investment Dan Tehan said the government was also extending temporary, targeted measures for parts of the tourism sector impacted most from border closures.

“The thing our tourism operators want more than anything is tourists, so we need Australians to do their patriotic duty and book a holiday this year, because every dollar spent on an Australian holiday is a dollar that supports a local job and a local business,” Tehan said.

“Our government’s support package will help get more Australians into those tourist areas most impacted by border lockdowns, and we need states and territories to do their part by agreeing to a nationally consistent approach to using border closures and lockdowns as a last resort on medical advice.”

The government has also extended the Domestic Aviation Network Support and Regional Aviation Network Support programs to 30 September 2021, as well as the 50 per cent waiver of domestic air services charges for regular public transport and aeromedical flights, and the International Freight Assistance Mechanism.

The government’s $50 million Business Events Grants Program will also be extended by three months to support Australian businesses to hold multi-day business events, covering up to 50 per cent of costs incurred in participating business events during the 2021 calendar year.

The $94.6 million support program for zoos, aquariums and wildlife parks will be extended by six months to maintain their animal populations where their tourism revenue has been affected by travel and social distancing restrictions.

The COVID-19 Consumer Travel Support Program will also be extended for three months beyond 13 March, with the Tourism Minister confirming that an additional $130 million will be added to the dedicated relief fund for travel agents, tour operators and wholesalers.

Support package draws mixed reactions

Australian Federation of Travel Agents CEO Darren Rudd said the industry body was grateful that the government “has heard and acted on our increasingly desperate pleas that ongoing support is critical”.

“We look forward to continuing to work closely with the Morrison-McCormack government on the details of implementation so that this historic support goes to those travel businesses who most need help.

“The ongoing refinement of the COVID-19 support package to ensure equitable distribution of funds across the breadth of our sector is continuing as a priority, and AFTA will keep on working daily with Austrade to make sure support gets to where it is so desperately needed.

“This is our major priority.”

Airlines for Australia & New Zealand chairman Professor Graeme Samuel said the support package offered a vital lifeline to stem the loss of critical skills and experience from the sector’s workforce.

“More than 34,000 airline employees, including pilots, crew and engineers have been impacted by stand-downs or redundancies over the past year, where the COVID-19 pandemic saw international travel plummet by 98 per cent, and domestic by 86 per cent,” he said.

“The inconsistent state border restrictions and closures have left Australia’s domestic market below half its pre-pandemic levels, lagging behind the rest of the world in its recovery.

“In order to be ready to stand workers back up when demand picks up and international travel eventually resumes, airlines need this support for retraining and recertification requirements.”

However, aviation unions appealing for the government to reverse its decision not to extend JobKeeper beyond 28 March and introduce ‘Aviation Keeper’ for all aviation workers with strict conditions capping executive salaries, banning bonuses and dividends and banning outsourcing.

The Transport Workers’ Union’s national secretary, Michael Kaine, said JobKeeper had been a vital lifeline in helping workers pay their bills and support their families.

“The federal government is ripping away a vital support to the aviation industry at a critical moment,” he said.

“Domestic aviation is poised to make a comeback, but it is not there yet. The Australian taxpayer has effectively paid the wages of thousands of aviation workers for almost a year.

“Stopping that support at the final hurdle makes no sense and amounts to a scandalous waste of hundreds of millions of dollars spent to date.”

Qantas Group CEO Alan Joyce said the stimulus package will bring the company’s domestic crews back to work faster and help them ramp up their hours closer to pre-crisis levels.

“We have around 7,500 people in our international business who have already been out of work for a year and will unfortunately stay grounded until at least the end of October,” he said.

“The targeted support from the federal government is about helping people stay connected to aviation despite the extended period of time they still face on the ground. It helps preserve the skills and experience we’re going to need when long-haul flying restarts.

“In a country like Australia, that capability has taken years to build and is absolutely crucial for the nation’s future.”

Qantas Group CEO Alan Joyce

Joyce said the targeted support will go directly to Qantas and Jetstar employees to help them meet their cost of living while they wait for international flying to return.

“It’s not a subsidy for Qantas,” he said.

Meanwhile, the Accommodation Association has vented its frustration over the lack of government support for hotels in capital cities.

“For Sydney and Melbourne, where 80 per cent of the market is from international and corporate markets which are still not operating due to government restrictions, the lack of support in this package will result in a loss of jobs and slow our recovery once borders are open,” Accommodation Association CEO Dean Long said.

“Our hotels in these two major international gateways currently have a forward booking rate of less than 10 per cent for the next 90 days and desperately need immediate support.”

The Australian Hotels Association (AHA) and Tourism Accommodation Australia have welcomed the government’s targeted regional tourism plan, but have called for a “fairer deal” for struggling capitals and more regional areas.

“While it is great to see government assistance for battling tourism areas like far North Queensland and the entire aviation industry, we need to ensure all businesses still affected by the pandemic are looked after, especially with a ‘job cliff’ coming,” AHA chief executive Stephen Ferguson said.

“Hospitality businesses were the first to close a year ago. We are proud of the role we have played in keeping the community safe, but we need to remember most hospitality and accommodation businesses are still heavily impacted by a wide range of restrictions such as international border closures.

“With JobKeeper winding up on 28 March, we are still very concerned at redundancies in our businesses which have been left out of this new plan.”

Simon Westaway, executive director of the Australian Tourism Industry Council, expressed disappointment that direct, targeted and short-term assistance for tourism enterprises had no part in the multi-pronged package.

“We are on the cusp of a national vaccine rollout bringing future confidence to domestic travel, yet the package doesn’t address at-risk tourism jobs in our cities and regions,” he said.

“Fundamental to our industry’s sustainability is the state of tourism businesses and reliant jobs in our capital cities, where interstate and international visitors and major events have evaporated.

“This package isn’t going to provide the benefit, nor directly tackle the dire predicament facing tourism enterprises and our visitor economy, which is closely aligned to capital city gateways.”

Featured image source: iStock/alfexe

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