Federal Government set to subsidise flights in tourism support package to replace JobKeeper

The Australian Government is expected to subsidise 800,000 domestic flights, help the nation’s two main airlines and offer cheap loans to small operators as part of $1.2 billion package to support tourism following the ending of the JobKeeper allowance at the end of this month.

The support package for tourism businesses still struggling with international COVID border restrictions is due to be unveiled by Australian Prime Minister Scott Morrison before the end of the week.

Seeking to prop up the industry when the JobKeeper subsidy scheme ends this month, the package will see the Federal Government pay 50% of the cost of flying to 13 destinations between 1st April and 31st July while international borders remain closed.

With airlines agreeing to provide additional flights to those places, the Federal Government will provide financial support to Qantas and Virgin Airways between 1st April and 31st October - when international flights are expected to resume.

With the Federal Government in the process of finalising the details of the new support for areas suffering ongoing downturns in tourism activity, Australian Deputy Prime Minister Michael McCormack said the program would hinge on making sure there are regular domestic flights, as well as support from state and territory leaders, telling the ABC “what we want to see as the vaccine is rolled out, I think, (is that state) Premiers should be less inclined to hit the panic button and to bring about border closures.”

Deputy Prime Minister McCormack said Australians needed to have confidence that when they booked a holiday they would be able to make the trip and then return home.

The program is expected to also include loans of up to $5 million to tourism businesses with two-year repayment holidays.

With the JobKeeper wage subsidy set to wrap up on 28th March, the number of people on the scheme continuing to fall.

Figures from the Australian Taxation Office (ATO) showed 1.54 million people collected the subsidy between October and December, down from 3.6 million between April and September.

While some industries, have bounced back from the Coronavirus recession better than others, tourism operators - particularly in areas that usually receive large international visitors - say they need more help.

Tourism is one of Australia’s biggest industries, worth more than $60 billion and employing about 5% of the country’s workforce. However, the industry was crippled when the country shut its international borders in March 2020 to curtail the spread of COVID-19 - leaving tens of thousands of people on the country’s wage-subsidy scheme.

Images: Cairns is relying on support after JobKeeper (top) and Virgin Australia, alkong with Qantas, will provide additional flights under the new tourism support package (below).