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Australia’s tourism and aviation’s flight path to recovery

Australia’s airlines, travel agents and tourism operators, restaurants and bars, hotels and caravan parks should expect a rush of hundreds of thousands of tourists with announcement of a new $1.2 billion support package from the Australian Government.

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

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 Australians, according to the Prime Minister.

“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,” the Prime Minister 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.”

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According to Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack, 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,” McCormack 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.”

Initial operations

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

From 1 April, discounts will be off the average fare and will be available on airline websites. 

Other new measures

The support package includes:

  • New International Aviation Support to help Australia’s international passenger airlines maintain more than 8,000 core international aviation jobs
  • Support for regular passenger airports to meet their domestic security screening costs
  • 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 so they can stand them back up when the market expands again.
  • The reinstatement of domestic aviation security screening cost rebates for more than 50 regular passenger airports

Expanding SME Loan Guarantee Scheme

The Australian Government will expand and extend its ‘SME Loan Guarantee Scheme’ as part of the $40 billion in lending to small and medium enterprises that it has committed.

Under the existing Scheme, more than 35,000 loans worth more than $3 billion have already been provided, aimed at helping thousands of small businesses get to the other side of this pandemic.

As the country moves into the recovery phase, the Scheme will be targeted and tailored to support those businesses that are affected and have been relying on JobKeeper during the March quarter.

The increased Government guarantee will benefit SME Recovery Loan Scheme rising from the current 50/50 split between the Government and the banks to an 80/20 split. The government hopes the move will encourage more banks to support small businesses.

The expanded Scheme will also increase the size of eligible loans, up from $1 million under the current Scheme to $5 million. Under the expanded Scheme, businesses with a higher turnover will also benefit with the maximum eligible turnover increasing from $50 million to $250 million.

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Maximum loan terms under the expanded Scheme will also be increased from 5 to 10 years allowing businesses and lenders with more flexibility.

In addition, the expanded Scheme will also allow lenders to offer borrowers a repayment holiday of up to 2 years.

Eligible businesses will also be able to use the Scheme to refinance their existing loans. This will allow SMEs to access the more concessional interest rates available under the program and to better manage their cash-flows through an extended loan term and lower combined repayments.

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.

According to Treasurer Josh Frydenberg, this latest package of measures was all part of the Federal 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,” Frydenberg 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.”

For his part, 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,” Minister 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.”

These programs to extend to 30 September 2021

  • Successful Domestic Aviation Network Support (DANS) and Regional Aviation Network Support (RANS) programs 
  • 50 per cent waiver of domestic air services charges for Regular Public Transport (RPT) and aeromedical flights
  • International Freight Assistance Mechanism.

The $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. This will help restart Australia’s business events sector.

The $94.6 million Zoos and Aquarium program will be extended by six months to support zoos, aquariums and wildlife parks 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. 

For more information on the Government’s COVID-19 support for aviation visit https://www.infrastructure.gov.au/aviation/index.aspx#aviation

For further information on the COVID‑19 tourism support plan visit https://www.austrade.gov.au/Australian/Tourism/Tourism-and-business

For further information on the Small and Medium Enterprise Recovery Loan Scheme visit https://treasury.gov.au/coronavirus/sme-guarantee-scheme

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