The federal budget’s spending and forecasts are built on some far-reaching assumptions about when international travel will resume and the vaccine rollout will be completed.
The budget assumes inbound and outbound international travel will “remain low through to mid-2022”, even if the vaccine rollout finishes by the end of this year.
They are two significant expectations that have significant consequences for businesses reliant on the flow of international arrivals for their staff and customers.
How certain are the dates?
The budget assumes that the whole Australian population will be vaccinated by the end of the year and that international borders will start to operate by mid-next year. However, those dates don’t appear to be definite.
Treasurer Josh Frydenberg told the ABC those assumptions “are difficult to make the during the middle of a pandemic”.
“It’s quite a conservative, cautious assumption that international borders will gradually reopen from the middle of next year,” Frydenberg said.
What does it mean for tourism?
While international borders remain shut, the federal government has continued its support for parts of the tourism industry reliant on overseas visitors.
Earlier this year, the federal government announced a $1.2 billion support package for the tourism and aviation sector, including 800,000 half-priced air fares.
There’s also a further $274.6 million for the extension of three tourism schemes, including the Business Events Grants, Zoos and Aquariums, and COVID-19 Consumer Travel Support programs.
Speaking to SmartCompany, Felicia Mariani, chief executive of the Victorian Tourism Industry Council, noted the announced funding will not go far enough to support the industry while borders remain shut.
“An ongoing closed border is going to seriously affect the tourism industry,” Mariani says.
“If we think that we can survive off the back of domestic tourism alone, we’re kidding ourselves.”
Mariani says interstate tourism has not offset the loss of international visitors, and the uncertainty of when international travel will resume makes it impossible for businesses to plan with certainty.
“There’s no guarantee that they’re even going to upon by June next year. It’s very unclear,” she says.
What the tourism industry wants to see is a roadmap that will give business operators some level of confidence and hope, she says.
“The budget does not provide any level of certainty or consistency that the industry desperately needs,” she says.
“There’s no roadmap, there’s no timeline, there’s nothing we can work with to try and plan around, and also to work with our international wholesalers and distributors who are keen to understand when they can book travel to Australia.”
What does it mean for skills shortages?
The number of international students and backpackers has dramatically dropped since the government shut international borders early last year.
This has caused industries, such as hospitality, tourism, agriculture and IT, to suffer from skills shortages.
The federal government has responded, changing the rules on international students visas to allow students to work more than 40 hours a fortnight in hospitality or tourism.
The government is also expanding the COVID-19 pandemic event visa to include tourism and hospitality.
The visa, which is currently open to workers in critical sectors such as agriculture and health care, allows workers already in the country to extend their stay another 12 months.
Mariani says those measures will certainly help the tourism industry, but the shortage of skilled workers remains a “big issue” while borders remain closed.
“Our industry has been incredibly reliant on international students, backpackers and visa 457 visa holders,” she says.
“We’re staring down the barrel and that’s not really changing in any significant way for at least another year.”