Budget 2021: Industry hopes for a new lifeline left on the runway

The budget has delivered a reminder to the tourism and aviation industry of how much government assistance they’ve received to date, but little in the way of new funding.

Qantas’s hopes of resuming long haul international flights from October 31 have been all but dashed by the federal budget. Picture: Getty Images

Tourism operators and airlines hoping for an extension of federal government support in the budget have been left with nothing but a reminder of how much they have already received.

Despite the Treasurer’s admission international borders were unlikely to reopen “until the effective containment of COVID-19 both here and abroad”, calls for further assistance to protect jobs and businesses were ignored.

Instead, budget papers highlighted that total support for the sector during the COVID-19 crisis had reached a hefty $4.5bn, encompassing a wide range of assistance measures since March 2020.

The sum included a $1.2bn package announced two months ago, designed to stimulate domestic travel and help airlines retain their operational readiness for overseas flights.

Extending to the end of October, the package was thought to be timed to coincide with Qantas’ planned resumption of international services on October 31. But the budget all but put paid to that, with several references to the reopening of international borders “over 2022”, against a backdrop of ongoing overseas outbreaks and the slower-than-expected pace of the vaccination rollout.

The lack of new measures for the industry was expected to be poorly received by tourism leaders, who had lobbied vigorously for an emergency wage subsidy for 71,000 of the worst-affected workers, and a tax rebate for domestic holiday activities costing more than $1000.

Market analyst IBISWorld chose budget day to release a grim report for tourism and aviation, warning “the longer borders remain closed, the more enterprises will exit the industry”.

“Revenue across the tourism industry declined by 20.9 per cent in 2019-20, and has declined by a further 38.1 per cent in 2020-21, to $71.2bn,” the report said.

“Ongoing fears surrounding the pandemic, Australia’s cautious approach to easing international border controls and the downturn of the global economy are all forecast to limit the industry’s recovery in the short term.”

Hospitality and hotel industry heads had also been hopeful of a lifeline in the form of a reduction to the fringe benefits tax or a stimulus package to aid capital city tourism operators.

While they missed out, there was a commitment to extend the $94.6m package supporting zoos and aquariums for six months, to help maintain animal populations in the face of reduced revenue due to social distancing requirements.

The Great Barrier Reef Marine Park Authority was another “winner”, scoring $14.1m over three years to support tourism and review its charging structure.

Emerging aviation technologies will be funded to the tune of $32.6m over two years, benefiting regional economies and communities, and more than $3m will go towards the burgeoning drone industry to help with the automatic detection of rogue aircraft and regulation. Another $28.3m was earmarked for the Civil Aviation Safety Authority to establish its drone registration and regulation system.