Hundreds of thousands of cheap airline tickets will be offered by the federal government to encourage Australians to holiday in regions still reeling from COVID, as part of a new tourism package to fill gaps left by the end of JobKeeper.
A $1.2 billion package, to be formally announced on Thursday, will see new support aimed at the aviation and hospitality sectors, as well as an extension of a loan program for small and medium businesses that are being weaned off the JobKeeper wage subsidy.
With JobKeeper to end on March 28, the government has been under pressure to extend the program, or announce substantial support for sectors not yet fully recovered from the pandemic and associated lockdowns.
“This is our ticket to recovery,” Prime Minister Scott Morrison said.
Cheap flights to support tourism
The government says the “centrepiece” of the new plan, aimed at further supporting industries still hurting from COVID lockdowns and travel restrictions, is some 800,000 subsidised airline tickets to holiday regions.
Mr Morrison said Qantas, Virgin, Jetstar and some small regional operators would offer increased flights to 13 tourist regions including the Gold Coast, Cairns, the Whitsundays, Launceston, Broome, Merimbula and Kangaroo Island.
The government will subsidise a 50 per cent discount on those fares, in an effort to entice Australians to holiday at home, with those regions chosen specifically for their reliance on tourism.
According to advance material distributed by the Prime Minister’s office, ahead of the official announcement, it will be a “demand-driven” program with people able to go to an airline’s website and buy a cheap fare.
The program will run from April 1 to July 31, and the government expects about 46,000 discounted fares will be available each week.
“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,” Mr Morrison said.
“Our tourism businesses don’t want to rely on government support forever. They want their tourists back.”
The government says it may extend the number of discounted destinations.
The Labor Opposition had pressured the government to announce an extension of the JobKeeper program, or some continuing support, after its scheduled finish.
The aviation and tourism sectors especially had demanded ongoing support due to heavy hits from the pandemic, such as travel restrictions and border closures discouraging people from booking holidays.
Aviation support before borders reopen
Thursday’s package will also include further international aviation support funding to Qantas and Virgin, airlines that are still suffering from the closure of Australia’s borders.
With tourist jets overseas still largely grounded, the government will shell out payments to the carriers, to help them “maintain more than 8000 core international aviation jobs”.
Elsewhere in the package, money is allocated to help airports meet security screening costs, and training and certification fees.
The airlines are obligated to keep their equipment in “flight-ready” condition, awaiting the reopening of borders – which may not be that far away.
Despite international borders remaining tightly shut, pending further data from vaccine rollouts worldwide, the aviation support package will only run until October 31.
The New Daily understands that timing is because the federal government expects international flights to resume by that date.
Australia is still working to set up its first travel “bubble”, with New Zealand, before looking at further arrangements with countries that have their COVID situation well in hand.
Deputy Prime Minister Michael McCormack, the Transport Minister, said the package was about supporting carriers “so that when tourism takes off again and our borders reopen, our airlines are ready to go”.
Loans to wean businesses off JobKeeper
Despite the wage subsidy program coming to an end on March 28, the government will extend levels of support to businesses that still need it.
A ‘recovery loan scheme’ for small and medium businesses will be enhanced, with a new ceiling of $5 million up from the current $1 million.
It will only be available to companies that had been on JobKeeper between January 4 and March 28, but they will be offered loans with a 10-year period and a two-year “holiday” from repaying any interest or principal.
The government currently guarantees the loan 50-50 with banks, but the new loans will be supported 80-20 by the government, in an attempt to coax lenders into offering more.
Some 35,000 loans worth more than $3 billion had already been given under the scheme, according to Treasurer Josh Frydenberg.
“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,” he said.
Further extensions in bespoke programs for individual industries – such as an extra three months for a Business Events Grants Program to support conventions, and $94 million for an extra six months for a zoos and aquarium support – are also included in the announcement.
The Prime Minister is expected to officially unveil the program on Thursday.