Targeted travel boost a good start

Being carefully targeted, the Morrison government’s new support package, bankrolling 800,000 half-priced airfares and providing cheap loans to small and medium businesses coming off JobKeeper should produce a good bang for taxpayers’ bucks. When one dollar is spent on an airline ticket, around $10 is spent on the ground and what the tourism industry needs is tourists, Scott Morrison said when announcing the measures. Travellers will enjoy 50 per cent discounts on domestic fares to ­13 tourism-dependent regions, ­such as the Gold Coast, Cairns, the Whitsundays, Alice Springs, Broome, Kangaroo Island and Merimbula. Qantas and Virgin will also receive retention payments to partly subsidise the wages of 8600 international aviation employees and ensure planes are flight-ready in anticipation of overseas travel resuming when the vaccination rollout finishes. That could be further away than late October, unfortunately, with the program already well behind schedule. On Thursday, Health Department secretary Brendan Murphy blamed the slow start of vaccinations on roadblocks put up by European Union countries.

Airline chiefs, for good reason, have emphasised that state ­governments need to back the tourism industry rescue package by not continuing to close borders in the event of COVID-19 outbreaks. Australians have been deterred from travelling interstate, spooked by snap border closures and the prospect of being forced into hotel quarantine at their own expense and inconvenience. As Qantas chief executive Alan Joyce says, the fixation with “zero COVID cases” needs to end. Provided state borders stay open, the multiplier effect on businesses, jobs and communities in regions that depend heavily on tourism should be significant. Targeting the airline industry makes sense, Australian Tourism Industry Council executive director Simon Westaway pointed out: “We need to have a sustainable aviation sector — it’s going to help drive recovery.’’

As with most stimulus packages, the downside is that it has put noses out of joint in spheres that are not direct beneficiaries. Bus companies, hotel operators in capital cities, especially in Sydney and Melbourne, regional centres not in the group of 13 and attractions that cater to day trippers are all demanding more support. Other towns and cities would be added to the initial list of 13 destinations, Deputy Prime Minister Michael McCormack said.

Some criticisms of the package are missing the point. NSW tourism operators, for example, claiming it is unfair that airfares to five Queensland centres and just one in NSW are to be subsidised when NSW has kept its borders open, ignore the fact that government support needs to be targeted to areas that need it most. Aviation is one such sector. It is a national concern, as PwC chief economist Jeremy Thorpe pointed out. Federal support targeted at CBDs, he said, would risk “crowding out” tailored measures from state and local governments geared to promoting city fringe and regional areas.

Domestic tourism businesses, which pump more than $100bn into the economy and employ about 611,000 people, continue to rely heavily on JobKeeper ­payments. The new support package is geared to helping many of those businesses, after JobKeeper ends on March 28. The coming months will tell how effective the package proves to be. According to the Tourism and Transport Forum, which has called for a dedicated wage subsidy until the resumption of international travel, the airline package is a “good start” but nowhere near enough to save wider tourism jobs. It anticipates job losses of more than 300,000 this year, after the industry lost 506,000 full-time positions during 2020 because of COVID-19.

The bottom line, however, is that taxpayer largesse cannot be unlimited. It is growth, investment and business activity, ultimately, more than government handouts and intervention, that will stimulate travel, especially business travel between major cities.