CHIEF EXECUTIVE'S UPDATE | FEDERAL BUDGET 2020
Federal Budget 2020 - Response
Dear Members,
The Federal Government’s budget delivered last night by Treasurer Josh Frydenberg has a lot to like in it for tourism.
Strong support for regions, additional budget for Tourism Australia, support for tourism on the Great Barrier Reef and an attractive tax loss carry back initiative which will allow business to invest in their own recovery.
Personal tax cuts will hopefully lift domestic demand and encourage people to move beyond the capital cities and explore further afield.
The budget assumptions are optimistic and reliant on domestic borders reopening, an effective vaccine developed and delivered, and the tax breaks given to people being spent.
These are not however guaranteed, and time will tell if the optimism is warranted.
Although there is a lot of positive news in the Budget, we were hoping for more on three major issues.
- With international borders projected to stay closed until 2021, regional tourism businesses, especially those more than a four-hour drive from a capital city really need further support.
- Many of these businesses have been closed an extended period of time and those in the north of Australia will need to wait till at least March 2021 for their season to start. JobKeeper has proven itself to be vital for these businesses, however the budget hasn’t recognised this.
- The tax loss carry back initiative is excellent for those tourism businesses that are operational and have the capacity to invest in their business. However, many are not. All business is trying to manage COVID restrictions, but a large number of tourism operators are also trying to recover from bushfires, drought and floods. It will be an enormous challenge for tourism businesses to now find further resources in order to take advantage of this initiative.
The domestic recovery for regions close to capital cities has been welcome, but travel behaviour has changed compared to pre COVID times.
Domestic travellers generally do not take part in the same number of tourism activities that international tourists do. This means that accommodation occupancy rates can be healthy but tour operators delivering services like dive trips, 4x4 adventures, kayaking and whale watching simply don’t have the pre-COVID numbers.
This decline is amplified by the COVID social distancing requirements greatly reducing the number of people allowed on each trip. These activity-based tourism businesses need ongoing support until international markets re-open and operators can return to pre-COVID levels.
Regionally based tourism is the backbone of many communities throughout Australia.
It supplies sustainable employment, investment and in many cases is the glue that can hold a community together.
These businesses need to be supported through the recovery phase so they are in a position to rebound.
Kind regards,
Rod Hillman
Chief Executive