Other headline measures include bigger loans to JobKeeper-reliant small businesses — including a two-year repayment holiday — and direct assistance to help Qantas and Virgin keep workers employed and planes ready to fly overseas again.
The measures will see taxpayers subsidising flights to and from destinations such as the Gold Coast, Cairns, Alice Springs and Launceston as closed international borders and intermittent state border closures keep tourists away.
Prime Minister Scott Morrison told Today the tourism package would help the country’s pandemic-hit industries and regions get “over the next hump” of economic recovery.
“We have got to get tourists on the ground and that’s what is going to keep people in their jobs,” Mr Morrison said.
“Just like we have seen in many states where people have been getting in their cars and going to those tourist destinations, we need to get fights to far-flung areas in Cairns, Gold Coast and northern Tasmania and ensure those visitors are getting there.”
Mr Morrison said every dollar spent on a ticket in the air would equate to about $10 spent on the ground in the region.
The Federal Government stresses demand will drive the number of tickets but expects to subsidise about 46,000 airfares a week, to a total of 800,000.
The offer applies to 13 destinations, but Mr Morrison said the government was open to adding more locations to the package.
However, he admitted the benefits of the package could be hindered if states decided to close their borders.
But the prime minister held high hopes “2021 is different to 2020”.
“In 2021, what is appropriate with state borders I think is completely different, particularly with the vaccination program rolling out,” he said.
“Both of the airlines have said pretty plainly that for this to work best, the states have to keep their borders open.”
On top of the obvious benefits to airlines, tourism operators and travel agents, the plan is designed to support accommodation and hospitality businesses in the hardest-hit regions when the JobKeeper subsidy runs out on March 28.
But of all JobKeeper recipients not working or working only a few hours a week, about 20 per cent are employed in cafes, restaurants, travel agencies, tour operators or airlines, according to government figures.
Mr Morrison said while the economy had recovered 85 per cent of its pandemic slump, the package was designed to help the worst-affected to bridge the gap back to normal.
“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.”
Qantas CEO Alan Joyce spruiked the $1.2 billion tourism package as “great news for Australian tourism”.
“This is great news for Qantas, but particularly for Qantas employees, who have suffered pretty badly over the last year,” he said.
Mr Joyce said the discounted tickets would “stimulate demand” across the 13 travel destinations.
“That’s good for the local tourism in those states – tourism that’s been devastated,” he said.
“We have been worried about the ecosystem of those little tour operators, the hotels that are there and making sure that they can survive until we can get international tourists back as well.
“That ticks the box in helping them. It also means we activate more aircraft.”
Tourism and aviation support at a glance
- To run from April 1 to July 31
- 50 per cent discount on domestic fares – travel to and from the locations will be subsidised
- Routes are based on being reliant on tourism for Gross Domestic Product and particularly dependent on aviation for tourism during April to July
- Demand drives number of tickets and locations the flights will depart from, but estimated average of 46,000 discounted fares per week
- Tickets available from airline websites from April 1
- Any air operator who has operated the routes in the previous two years will be eligible, but mostly Qantas, Virgin, Jetstar and some others
Package comes with plea to keep borders open
The changes to small business loans tighten the SME Loan Guarantee Scheme to apply to only businesses receiving JobKeeper in the March quarter but given an increase to the maximum size of a loan from $1 million to $5 million.
The turnover cut-off for eligible businesses also increases, from $50 million up to $250 million, and the government has pledged to guarantee 80 per cent of each loan, up from the current 50/50 split with banks.
The government says the direct airline assistance will last from April 1 until October 31, when international flights are expected to resume.
It’s designed to keep 8600 international airline workers in jobs and planes ready to take to the skies again, in exchange for an assurance from Qantas and Virgin that they will maintain a set level of international flight readiness.
The Tourism & Transport Forum had called for a $7.7 billion package stretching to the end of the year, to get the industry back to 75 per cent of 2019 levels.
Queensland Premier Annastacia Palaszczuk, whose state is home to several of the nation’s most tourism-reliant regions, had also called for a JobKeeper extension.
She warned Cairns in particular, one of several Queensland regions targeted in the new package, had 10,000 businesses on JobKeeper “concerned they are going to fall off a cliff” at the end of March.
Announcing the new package, Tourism Minister Dan Tehan took the opportunity to reiterate government calls for states to find more consistency on border closures.
“Our government’s support package will help get more Australians into those tourist areas most impacted by border lockdowns,” he said.
“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 warns these may change depending on airline negotiations and demand:
- Adelaide – Gold Coast
- Melbourne – Gold Coast
- Sydney – Gold Coast
- Canberra – Gold Coast
- Avalon – Gold Coast
Tropical North Queensland (Queensland)
- Melbourne – Cairns
- Sydney – Cairns
- Darwin – Cairns
Whitsundays and Mackay region (Queensland)
- Sydney – Proserpine
- Sydney – Hamilton Island
- Sunshine Coast (Queensland)
- Sydney – Maroochydore
- Melbourne – Maroochydore
- Adelaide – Maroochydore
Lasseter and Alice Springs (Northern Territory)
- Adelaide – Alice Springs
- Sydney – Uluru
- Brisbane – Alice Springs
- Melbourne – Alice Springs
- Perth – Alice Springs
- Sydney – Alice Springs
- Brisbane – Uluru
- Melbourne – Uluru
Launceston, Devonport and Burnie (Tasmania)
- Melbourne – Launceston
- Sydney – Launceston
- Brisbane – Launceston
- Melbourne – Devonport
- Melbourne – Burnie
Broome (Western Australia)
- Darwin – Broome
- Sydney – Broome
- Melbourne – Broome
- Gold Coast – Avalon
- Sydney – Avalon
Merimbula (New South Wales)
Kangaroo Island (South Australia)