Monday, 22 February 2021
Private Members' Business
The tourism sector has been hit the hardest by the COVID-19 pandemic induced economic downturn, as borders have closed, non-essential activities have been discouraged and international tourism has dried up within the blink of an eye. The 40,000-odd travel agents across the country have copped the brunt of this downturn. The business model for travel agents is unique, many of whom are small businesses, and they have complex cashflow strategies. When booking and organising trips, they take their cut off the top, but it also means that when those trips are cancelled, as they have been during this pandemic, it's up to them to stump up the cash for the refund in the first instance before that refund can then be claimed by the holiday operator, tour company, airline or hotel. In usual times, this isn't a huge concern, as cash flow is enabled by further future bookings, but in this instance, of COVID, where no-one is travelling and no-one is planning to travel any time soon, that cash flow has completely dried up.
Early in this crisis, travel agents were under the pump, cancelling trips. They were also bleeding money, as more and more refunds were issued, leaving them with less and less cash for themselves or to pay their staff. Now even that work has dried up and many travel agents across the country have had to close altogether. The situation for travel agents is absolutely dire, and, until the global circumstances surrounding COVID stabilise, they have no hope of getting anywhere near back to normal. Their work is completely stalled, and through no fault of their own. They were the first to be hit by the pandemic, in many respects, and indeed they will be the last to recover.
And now the lifeline that they had been relying on in order to try and survive, JobKeeper, is about to be withdrawn by the Morrison government too. Travel agents need support—and I'm not talking about the grants package already introduced by the Morrison government that is, shamefully, not fit for purpose. We must provide an urgent lifeline to travel agents on the brink of collapse, instead of that inadequate loss-carryback scheme for which the vast majority of travel agents appear to be completely ineligible anyway. Travel agents and other industries are still suffering. They need tailored economic supports that will keep their heads above water.
Treasury expects that 1.3 million Australians will be on JobKeeper by the time that measure is withdrawn at the end of March, in 34 days time. That's about 10 per cent of the nation's workforce. On top of that, Treasury's own figures expect that around 100,000 of those people who have a job today will lose that job upon JobKeeper being withdrawn at the end of March.
There is so much growing anxiety and uncertainty about JobKeeper being cut, from the tourism sector and much more broadly across the nation. Yet we still haven't seen a good plan for secure, well-paid jobs to replace it. This withdrawal of support is coming far too early. Workers, small businesses and entire communities—like those up in Cairns who rely so much on international tourism to keep afloat—are hurting badly. We can't afford to lose our tourism sector and the travel agents who are such great ambassadors for it and a necessary part of enabling it.
Surely this must be starting to get personal for the Prime Minister. How else is he going to get his next beachside international holiday during a crisis if he can't get access to travel agents! We know how good some travel agencies have had it under some of the ministers of this government. Surely it's time for this government to start repaying travel agents a favour!
The vaccine rollout has now slowly—and albeit delayed—begun, and that is a good thing. But that doesn't mean that the crisis is, by any means, close to being over. Travel agents, the live events industry, tourism, cinemas, hospitality and accommodation are all struggling, and will be until we can get our borders open, get vaccination throughout our community and make sure that our economic recovery is affecting not just some parts of our community but all of our community.
Many of these sectors and many others still require JobKeeper. It is too early to withdraw such necessary financial support—financial support that is not just for business but for the employees who rely on those businesses. We need to continue to support those sectors, to make sure that the support continues, before it's too late—before those small businesses, come the end of March, get thrown into a wall by this government. The government is leading them along with breadcrumbs of hope coming to the end of March, but with no firm plan—no clarity around who will get supported or who won't get supported after March. Will anyone in the small business sector actually end up getting support after March? We don't know. Small business doesn't know. Those 1.3 million people relying on JobKeeper to hold their job don't know. And the government must fix it.
I also rise to acknowledge the dire financial situation facing many in the travel and tourism industries as a result of closures of international borders, unpredictable domestic travel arrangements and, of course, the COVID-19 pandemic. Like many members here, I expect, I have a number of travel agents in my own electorate who've been doing it incredibly tough these last nine months. Not only have they been not doing any new business themselves, but most of their time has been spent having to process refunds for previous bookings and businesses for which they've also needed to return the commissions. So, for many of them, if it were not for JobKeeper and other government programs of assistance they'd be cash-flow negative. Nonetheless, devoted as they are to their clients—and many of them have been in the industry for a few decades or more—they've kept their doors open. They've, by and large, kept their staff on. They've kept helping their clients—including people who've been seeking to return home to Australia and have had a hard time getting on flights—and doing their best, basically, to stay optimistic and stay positive.
We have, of course, provided support to the travel industry. We've had a large amount of money go to the travel and tourism sector under JobKeeper. I know from my own constituents that they've been very grateful for the support that JobKeeper has provided in allowing them to keep on their own employees. I'm conscious, as many are, that there is a degree of anxiety amongst that sector about the ending of JobKeeper at the end of March and what's in front of them. I know, having had discussions with the executive about this, that there is a recognition that this is one of the sectors that is going to have a hard time recovering after COVID-19 and will be slower coming back. Thought is being given to how we can assist this sector. I'd encourage those internal conversations to continue.
I do want to, of course, mention the consumer travel support program that was announced on 1 December, which provides grants from $1,500 to $100,000 to help travel agents continue to operate and process refunds for consumers. Under that program, which has been a $128 million program, already $60 million has been paid. As at 1 February, 1,541 travel agents have received payments and another 1,033 are being processed. I've been contacted by a number of travel agents, as I'm sure many here have been, about the revenue test that's being used for eligibility for that and whether it's total transaction revenue or the item you put at B1 on your BAS. I believe those issues are being worked through now, and I wanted to assure travel agents who might be watching that those concerns have been heard.
I am conscious, though, that this is still going to be an industry and a sector that will be very slow to recover. International tourism will take some time to be restored, and a large part depends upon how the vaccination program proceeds, not only in Australia but also globally. I've been encouraged by the vaccination results in Israel—where almost 60 per cent of the population has now been vaccinated and it's seeming to have a significant impact not only on hospitalisation but also on transmission—but also in the UK and the US, where the vaccination program is being rolled out at speed, and, of course, in Australia, where the first vaccinations were given yesterday and we are now rolling out vaccines for some time.
Equally disruptive, though, have been the domestic border closures—these are the state border closures—because, as many people would know, a lot of people had their domestic travel plans interrupted over the summer and earlier. If they were intending to travel to Queensland from my own state of New South Wales or Tasmania, border closures which were not always, frankly speaking, driven by the evidence or the best health advice have had a dramatic impact on the tourism sector and have also had a chastening effect on consumers who've been, as a result—once bitten, twice shy—unwilling to make further arrangements.
I was contacted recently by Sue Francis. She's the Director of the Travel Industry Club, a travel agent in Paddington, and happens to live on my street in Paddington. She's been in her current business for 25 years and in the industry for 40 years. She explained that, like many local travel agents, she's worked to pivot her business to domestic sales but this has been very hard, given the state border closures adding to the uncertainty, the stress and the financial strain of the travel and tourism business. I've also heard from many others—including Wentworth Travel, in my own electorate—who've got staff who've worked in the industry for their entire lives in many respects. They'd like to keep their jobs and they'd like to keep their industry, but they're concerned about what the future holds.
So I do want to speak in favour of the industry, urge them to keep their heads up and let them know that help is on its way.
I rise in support of the motion from the member for Adelaide. Before COVID, Australians travelled across Australia and around the world. The Central Coast, home to my electorate, is known for its beaches, waterways, valleys, mountains and coastal communities. People come to the Central Coast to enjoy our way of life. In 2019, before the onset of the pandemic, the Central Coast welcomed 1.94 million visitors. These visitors added over $692 million to the local economy.
But the pandemic has hit regional coastal communities like mine hard. Those driven by retail, hospitality and tourism have shouldered the burden of the economic impact of COVID-19. People in the travel industry are facing, as many have said, an uphill battle, as tourism was one of the first industries to be hit and will likely be one of the last to recover. This includes people like Lee-Anne Talbot from Travel Managers Australia. Lee-Anne has been in the travel industry for over 30 years and has owned and operated her own travel business for the past 10 years on the coast. In 2018, Lee-Anne rebranded her business, investing $15,000 on repositioning a new website and changing her travel offering to a budget list of luxury holiday markets. Given this investment, Lee-Anne's income dropped in 2018-19, but in the 2019-20 financial year Lee-Anne's hard work and investment was starting to pay off and her sales figures tripled. Then COVID hit. I spoke to Lee-Anne on Friday and she said that everything that she'd worked for had been annihilated.
When the government announced its COVID-19 Consumer Travel Support Program, Lee-Anne was optimistic. She worked with her accountant to apply and got together the necessary application paperwork, but on Monday last week she was told her claim was declined because she was assessed on the 2018-19 financial year instead of the 2019 calendar year, as stated in the government's own policy. This meant Lee-Anne was assessed on her earnings based on her 2018-19 BAS report and, when the GST was removed, those earnings fell below the threshold to be eligible for a grant. Lee-Anne has asked repeatedly to be assessed on statements prepared by her accountant or on an average of the 2018-19 and 2019-20 BAS returns, which showed the increase in her earnings after rebranding. This was declined. Lee-Anne has been told she can appeal, but she has to wait until she receives the formal letter from Services Australia declining her claim, which, when I spoke to her on Friday, hadn't arrived. This is the part that really hit me: Lee-Anne told me that she received no empathy from the department during any of this process. It's easy to see why she feels this way. Lee-Anne is receiving JobKeeper, but, when the government stops the payment at the end of March, what will this mean to Lee-Anne and to people like her?
Like Lee-Anne, Michelle Thomas of Norah Head contacted me. She's been a successful sole trader travel agent for over 10 years—a business that she built from scratch. With the onset of COVID-19, Michelle had to take a second job to be able to pay her mortgage. Michelle now has to work through credit and client refunds, like many travel agents are doing, for free while dealing with the unpredictable nature of border closures. This is time-consuming due to the different rules and regulations that Michelle has to go through, and she does this willingly on behalf of her clients for free, absorbing the costs. She can't leave the business because she still has clients with outstanding credit and is hoping to rebook their holidays.
The tourism industry faces enormous challenges if the government follows through with the cuts to JobKeeper in March. Tourism will not be back on its feet in the next five weeks. As I said, it was one of the first industries hit by this health and economic crisis and it's likely to be one of the last to recover, whether that's for domestic tourism in communities like mine on the Central Coast or international tourism, as others have spoken about. We know that, despite the vaccine rollout starting today, the Secretary of the Department of Health, Dr Brendan Murphy, has suggested that international travel is unlikely to begin this year, even if the majority of Australians have received the vaccination. He said:
I think that we'll go most of this year with still substantial border restrictions, even if we have a lot of the population vaccinated.
International tourism, particularly inbound tourism, is the lifeblood of tourism in Australia, and, for travel agents, international tourism fuels their business. Tourism and Transport Forum CEO Margy Osmond summed it up when she said:
Make no mistake, while international borders remain closed, we have no hope of recovery.
Travel agents like Lee-Anne and Michelle, who are hardworking people in my community, and those in communities across Australia, particularly regional communities, deserve better support from the government. In my community at the peak of COVID, there were 4,902 businesses supported through JobKeeper, keeping 18,734 employees connected to work in their industry. That is now at risk. Travel agents like Lee-Anne and Michelle deserve better. People in my community deserve better from this government.
I believe that everyone in this chamber understands and will be well aware that the tourism industry in this country, and indeed across Moncrieff, has suffered significant damage due to the pandemic. Job losses and business losses from that impact have been severe. It means that many families have been impacted and they've been less prosperous. Morrison government support has been required, through JobKeeper 1 and JobKeeper 2 help, and it's much appreciated on the Gold Coast. Pre-pandemic in 2019, tourism provided one in six jobs on the Gold Coast, so it's a key economic pillar for us, particularly in Moncrieff. The impact was immediate. I'll reel off some numbers for you. Total visitor numbers in the three months to March 2019 slumped by 34 per cent. In the three months to September 2020, compared with the same period the year before, we saw a 56 per cent reduction in total overnight-visitor numbers for my region. Total visitor nights were down 76 per cent. Total overnight-visitor spend dropped 68 per cent. That means there were lots and lots of lights off in those hotels on the Glitter Strip, as it's known—Surfers Paradise, the Gold Coast. It's been absolutely decimated by the COVID-19 pandemic.
The Morrison government has rightly provided significant support to the industry with JobKeeper, the cash flow boost and investment in lending incentives, and tourism has been one of the greatest beneficiaries of the $1 billion COVID-19 Relief and Recovery Fund. It includes $308 million worth of assistance for regional airlines, which impact the Gold Coast, and $100 million for tourism related infrastructure through the Building Better Regions Fund. There were some tourism-specific measures from the Morrison government, apart from the $128 million extra that went to travel agents—I must say, I wrote a letter to the Prime Minister around that and was primary in delivering that for travel agents, particularly in Moncrieff. In my electorate, I have many of them who are hurting. There was also $94.6 million supporting Australia's exhibiting zoos and aquariums, and $5.7 million of that went to Gold Coast zoos and aquariums. In my electorate, that includes Sea World, which actually received $3 million to help feed their dolphins. As I've said before in this place, it's $1,000 a week to feed one animal at Sea World, which is very, very expensive, and the Morrison government continues to support them.
The $50 million Business Events Grant program is actually still open until 30 March 2021. The program has already had 190 approved events, including 22 Gold Coast based events. Tourism Australia's new domestic business events campaign, which is called 'Event Here This Year' will dovetail into the Business Events Grant program. That campaign complements the Holiday Here This Year—or Holiday There This Year, on the Gold Coast please!—a campaign from Tourism Australia in which the Gold Coast features heavily.
The Gold Coast has been allocated $10 million under the $50 million Recovery for Regional Tourism grant program as well, so that will help us on the Gold Coast to recover. That's more support from the Morrison government, of course. Tourism event industries are grateful for the support they have received. The scale of the problems are such that the difficulties do continue.
Earlier this month, the federal Minister for Trade, Tourism and Investment visited my electorate of Moncrieff, hearing directly from stakeholders in the tourism and event industries, along with local Gold Coast ministers the member for McPherson and the member for Fadden, at a round table meeting that I organised at The Star. The Star is one of the Gold Coast's largest employers and of course bleeds across into tourism significantly. The roundtable focused on what's now needed to adapt to the current circumstances. There were a plethora of stakeholders there, including the Gold Coast Airport, Study Gold Coast, the three universities on the coast, RDA, Village Roadshow, Ardent Leisure, Currumbin Wildlife Sanctuary, Major Events Gold Coast, Sports Gold Coast, small business operators and the city were all there at the table putting their case forward to the minister. Those participants made it clear that the state border closures have actually had a massive impact on Gold Coast tourism. Locking out the Victorian market to us on the Gold Coast damaged us and our confidence greatly, and that's what we need the most: confidence. State governments need to put in place best-management practice for outbreaks—can I say New South Wales is the gold standard, as it's received four times the travellers into quarantine than Victoria with only a quarter of the COVID-19 cases—and that means the states should be able to deliver that with the COVID-19 vaccine rollout.
I am very pleased to support my good friend the member for Adelaide in his motion calling on the government to acknowledge the dire situation in our tourism sector, especially around travel agents, and to call on the government to do more. Most specifically, the No. 1 call for the government is to continue with JobKeeper.
Let's go back a second. We started this pandemic urging the government to support wage subsidies for Australian workers, and of course the government, including the Prime Minister, shut that down. Obviously, he realised that he needed to do it and then reversed his position and created the scheme called JobKeeper. Fast-forward just over a year. We now find ourselves in the situation where businesses, through no fault of their own, are going to be forced to let people go and forced to close their doors, because this government is refusing to support them throughout this pandemic. We started this pandemic with a simple principle: if you as a business are required to make sacrifices in order to help manage this pandemic, then the government is going to support you with wage subsidies. If you're forced to close your doors, if your revenue is down, the government will support you and support the jobs to make sure that they're there at the end of this pandemic.
But this government has completely forgotten about this principle. They are completely forgetting about the businesses that still rely on JobKeeper—businesses that are not affected by the restrictions of state governments but by the restrictions of this federal government. It is a federal government decision to shut the international borders—which I support; it is unsafe to have international visitors right now in Australia. But what this government is choosing to do to businesses who are affected by the government's decisions, businesses who prior to this pandemic had good and sustainable business models, means that those businesses are now going to be forced to lay off jobs and lose people throughout this pandemic.
The travel agents are the perfect example. These businesses make their money from international travel. They make it from the packages, the flights, the hotels—all of the big international products that they have to offer. And they've worked hard. But, throughout this pandemic, with all of the international travel being cancelled, the work hasn't stopped for our Australian travel agents; they've had to continue to work to support those people who are already engaging in their businesses. They've had to work for refunds. They've had to work try to corral money from airlines, hotels and a range of different stakeholders. Travel agents do not get paid until you've gone on your holiday. If you're an Australian and you go to one of your travel agents, and they organise a wonderful trip for you, it's not until you get on the plane that that money then flows into our local small businesses.
As you can imagine, these businesses have been around for decades. They are great Australian, hardworking businesses. They're local businesses, small businesses and businesses in my electorate, like FBI Travel, Travelcall, Goldman Travel, Albert Park Travel, Aurora, TravelManagers, G.E.T Educational Tours, Leisure Options, Magellan Travel and many, many more. These are great local businesses. These are businesses who I've met with. From the way in which they talk about their staff and their industry—they love it. They love the fact that they're able to organise and be a part of people's travels and holidays and adventures. It's a source of pride. It's also a source of pride that many have had staff with them for 10 or 20 years. People come into these industries and they are part of a good, functioning Australian economy.
What are they faced with now? They're faced with a federal government who have made decisions affecting the way in which they can do business and are walking away from supporting them, so that their businesses may not exist at the end of this pandemic. If you want to know the mindset of this federal government, when asked about pulling JobKeeper, they say: 'Well, the total number of jobs are going be moving up anyway. Don't worry about these businesses, because we're going to have more businesses and more jobs arising in the economy.' Well, tell that to a local travel agent in my electorate. Own up to the fact that you're happy as a federal government to see businesses shut their doors.
On this side of the House, in the federal Labor Party, we are not. We are going to stand with these small businesses and fight for their survival.