Coronavirus: Bordering on collapse, businesses warn states of job losses

Businesses are pleading with the states to open their borders as the aviation industry warns of more job losses.

Victorian Premier Daniel Andrews. National cabinet is set to consider hotel quarantine arrangements in his state after clusters in Melbourne were linked to security contractors in two hotels. Picture: Getty Images

Businesses are pleading with the states to throw open their borders or risk a tsunami of job losses, ahead of a national cabinet meeting on Friday that will discuss the alarming coronavirus outbreak in Victoria.

After Qantas sacked 6000 staff on Thursday and kept 15,000 stood down, the aviation industry is now warning that there will be significant job losses in other parts of the sector unless the travel ­industry recovers soon.

Sydney Airport chief executive Geoff Culbert said it had been a “tough day” for the aviation industry, which had only reinforced the urgency of lifting border closures.

“There are real jobs and livelihoods on the line,” Mr Culbert said. “Extending JobKeeper will be important and appreciated, but the best stimulus the aviation ­industry can get is opening up domestic and international ­borders. Opening borders and restoring travel means we can turn the JobKeeper tap off and the jobs tap on.”

Canberra Airport managing directo­r Stephen Byron was also critical of the continued border closures, blaming them for exacerbated the downturn in tourism and aviation.

“Prime Minister, as you know only too well, the tourism and hospitali­ty industry is desperate — hotels, travel companies, airlines and airline support industries are on the precipice,” Mr Byron wrote in a letter sent to Scott Morrison and obtained by The Australian this week.

“We were desperate last week, and it is even worse this week. We need a circuit breaker on the state border issues.”

Queensland and South Australia are understood to be re-examining blanket reopenings of their borders in the wake of the Victorian outbreak, while Premier Daniel Andrews warned his state was on the knife-edge of a second wave of infections.

“We are not going to be lifting the borders if it’s going to set us back in South Australia,” SA Premier Steven Marshall said.

Queensland is understood to have favoured a July 10 opening for every state except Victoria, but if it is pressured to adopt an all-or-nothing approach it may delay the border opening entirely.

Mr Morrison said the outbreak was localised and needed to be kept in perspective, as it was “very modest’’ by global standards. He acknowledged that “these are very hard times” and said he had discussed extending the $70bn JobKeeper scheme with Qan­tas chief executive Alan Joyce.

Tailored support for the worst-hit sectors is expected beyond the JobKeeper cut-off, September 27.

Mr Morrison said he would feel comfortable visiting Victoria, where school holidays start this week, despite the COVID-19 outbreak. “I’d go to Victoria but I wouldn’t go to the hotspots,” he told Nine’s A Current Affair on Thursday night. “That’s the point. There’s a localised outbreak and they’re containing that and that’s what’s important.

“If you live in Wangaratta, you are as exposed as you are as if you live in Wagga. I think we need to keep this in perspective.

“These are very hard times. And those hard times are showing themselves with people losing their work, showing themselves with people losing businesses, showing themselves with people unable to connect in the way they have in times past with big family gatherings.”

National cabinet is set to consider outbreaks in Victoria and hotel quarantine arrangements, after clusters in Melbourne were linked to security contractors in two hotels.

 

Australian Chamber of Commerce and Industry chief econo­mist Ross Lambie said it was important to “reopen the economy as much as possible based on the health advice, or we risk the restart and recovery ­taking longer than necessary”.

Dr Lambie said many sectors faced cuts to employment over the coming months. While sectors such as hospitality and tourism have already been rocked by the virus, sectors exposed to discretionary business spending, such as professional services, will be particularly hard-hit as the JobKeeper payment winds down and firms rein in spending.

“The lag in effect to these sectors­ means employment may see a further deterioration towards­ the third and fourth quarter,” Dr Lambie said.

“We are very concerned how business owners who deferred a number of bills during this crisis will find the money when these outgoing costs catch up to them.”

Treasury is finalising its review into the JobKeeper program, the results of which will be presented as part of the government’s July 23 mini-budget.

 

Australian Industry Group head of policy Peter Burn said it made little sense in the context of the overall successful suppression of the virus to keep border control­s in place “when the benefits of opening them are so great”.

The pressing need to reopen the economy as swiftly as possible was highlighted by a new report by the Commonwealth Bank, which predicted the number of unemployed Australians was set to surge past one million for the first time in history by September.

That coincides with the Morrison government’s plans to end the $70bn wage subsidy program and boosted welfare payments.

CBA head of Australian econo­mics Gareth Aird said he estimated­ there would be an extra 400,000 unemployed over the coming three months, bringing the total number to 1.13 million.

Australian Bureau of Statistics figures released on Thursday showed a record 40 per cent collapse in job vacancies over the three months to May. Vacancies virtually disappeared in particularly hard-hit industries, such as the arts and entertainment sector.

With hundreds of thousands more people projected to join the unemployment line, business groups have urged the government to extend further “targeted” support to avoid a “fiscal cliff” that could lead to further business failures and lay-offs.

Labor’s industrial relations spokesman Tony Burke demanded that the Prime Minister release Treasury’s report before the Eden-Monaro by-election is held on July 4.