Interview on 4CA, John MacKenzie

  • Transcript, E&OE
Topics: Dire circumstances of tourism in far north Queensland.
16 March 2020

John MacKenzie: Yes, I’ve got Tourism Minister, Simon Birmingham, in studio. Good morning and thanks for joining us in north Queensland.

Simon Birmingham: Good morning. Great to be with you.

John McKenzie: And it's incredible timing given that what we saw yesterday really is, in the view of some people, almost a death knell for tourism for the next several months. Now I’ll just read from page one of The Australian today: Australia has effectively closed its borders, mandating international airport arrivals be forced into 14-day self-isolation as the coronavirus response is ramped up in an effort to slow the spread of the disease after a 20 per cent jump in cases on Sunday and a fifth death. When indeed you have the situation with international airport arrivals going into 14-day self-isolation, that fundamentally cuts off people coming into Australia, wanting to come into Australia, does it not. How does that leave the airlines themselves?

Simon Birmingham: Well John, effectively it does. Now first and foremost our government's plan is about how we protect Australians so that we can reduce the number of people who will die as a result of coronavirus. And so all of the measures we've taken, right from the outset in terms of the restrictions on Chinese travel to Australia initially, subsequent travel restrictions through to the decision taken this weekend have been about the safety of Australians. And, compared to other parts of the world, we have managed to slow and contain the entry of the virus to Australia. And indeed if other countries perhaps had done the same things initially that Australia did, we may not have seen the type of spread out of China of the virus that has now created the global pandemic situation we face.

In terms of airlines, and the travel sector, and the impact of yesterday's decision — first thing we've got to be mindful of is that travel bookings were down enormously, dramatically. In markets like the United States the data I was seeing was that bookings were down by more than 90 per cent compared with the same time last year, before this decision.

So, in a sense, visitor numbers were plummeting and falling off the cliff regardless, but of course this decision will further impact that. We don't underestimate at all the impact this has for tourism businesses, especially in regions like Tropical North Queensland. And that's one of the reasons why last week's $17.6 billion economic stimulus package the government rolled out contained $1 billion specifically set aside in my portfolio to try to deal with internationally exposed tourism and trade sectors in regions like this one.

John McKenzie: Simon, you know, for us here trying to get a handle on this - we had of course back in ‘89 — you were very young I presume then — a similar crisis in that it started and we thought it will be over next week, it will be over next month. It went for month, after month, after month, you know, people said it lasted, whatever it was — 10 or 11 months. It lasted, really, years here in Far North Queensland. Can you put this into some sort of context for us. I mean as far as seriousness is concerned? How it's going to impact not just on the health of people but on people in tourism who are already on their knees. What awaits them?

Simon Birmingham: Well look, this is going to go on for some time and I fear it will get worse before it gets better, in terms of we're already seeing the pain and the impact of international travel we're now going to see, I suspect, impacts on domestic travel over the next period of time in terms of people's confidence to move around Australia. So those impacts are dire.

I can't say that there won't be business closures, there probably will be. I know there are already job losses that exist. The government has already put in place out of that $17.6 billion measures that will see between 2000 and $25,000 dollar payments being made to small and medium sized businesses right across the economy, right across the country to try to help them survive, to help them keep people in jobs. We've put in place a range of other measures to stimulate consumer spending in terms of household payments to pensioners and other categories of people, in terms of incentives for businesses to pay as well.

So we're very conscious that there's a huge economic response required in addition to the big public health response that is underway and is driving all of this, and that we will have to continue to adapt as we go. But the budget is coming down at the start of May and we will be looking at what else is necessary depending on how this unfolds in the lead up to that budget.

John MacKenzie: Now I presume you've got a panel of advisers that you rely on. Their job would be to stay in touch with, relatively speaking, remote places like us — remote from Canberra. So you'll have that information but it's my job here with this talk show to make sure you know exactly what's happening at our coalface. And this is good- very timely indeed. I've got the Blazing Saddles Adventures owner, and he’s a former Member for Barron River, Michael Trout, on the line. Michael, you're talking to Simon Birmingham the Minister. What have you got to say?

Michael Trout: Good morning Minister. Yeah, so aware that you've heard the briefing from TTNQ this morning. We've just come through the last two weeks the worst trading figures of my 28 years in the tourism industry. And as they would have made you aware that we are an aviation destination, we have to rely on the airlines to get people here, particularly this time of year. And it has absolutely dried up and I've got staff that are- it's a very casualised industry, the tourism industry, and they're getting less than 10 hours per week. And we need to retain our staff because in this day and age you just cannot employ someone and the next day they're working in this industry. And I just urge that you have taken that on board we've got staff that cannot have enough hours to even support themselves.

Simon Birmingham: Thanks Michael and I really appreciate you taking the time and being so open and honest about the difficulties that you're facing. I've been out and about, as you obviously know, with Warren Entsch this morning, meeting with Tourism Tropical North Queensland and their board and we're meeting with a broader range of businesses that they represent during the course of the day, starting out at the Cairns Aquarium. And as I said before, people have already told me about job losses, about loss of hours, about the pressure on their businesses, and I know that that is only going to continue. There's no silver bullet that we can fire that's going to get planes full of people coming back into the region again quickly. We have to plan for the recovery because the recovery will come and we need to make sure that critical tourism businesses are still here and still operational when that recovery comes, and that we get planes back and visitors back and that we have, of course, the experiences for them to enjoy.

But right now, it is about understanding what else we can do to try to sustain businesses through these unprecedented difficult times that they are facing. And so, yes, as I outlined before, we’ve already got those up to $25,000 dollar payments going into small and medium sized businesses. But I am here listening to try to understand, of the extra $1 billion that we've set aside to support those regions and the sectors who are most dramatically affected, of which Far North Queensland clearly is one of those regions, how do we deliver those funds most effectively in ways that will save the greatest number of businesses and save the greatest number of jobs.

John MacKenzie: Have you got another point, Michael?

Caller Michael: Yeah. Minister, the biggest issue is that for small businesses that are in tourism and around tourism, we've got no cash reserves. We've just come through a very quiet summer. Our Chinese New Year was absolutely flat lined, and then we came into March, which is normally a Japanese university student holiday time, and that has been extremely flat as well. And I guess I'd like to draw your attention back to the Howard days when we had Cyclone Larry that just completely decimated this area for some months, and they put out a wage subsidy for businesses, and [indistinct] I’d like to bring to your attention is the drought subsidy. There's a blueprint already for that over the last number of years, and I believe that companies that do take a low doc loan are serious about staying in the industry. And we cannot go to our banks. Our banks are not going to extend our overdrafts. They're not going to extend another loan. And that we're in a situation where our numbers will come down to single numbers per day. And we need- we have a responsibility. We've got a great reputation around the world and we need to come out with as many operators as there are.

So, I'd just like to make that point of the drought subsidy and also the Cyclone Larry issue back in John Howard's time.

Simon Birmingham: Thank you. And look, the experience of some of the measures that were applied under Cyclone Larry was raised with me earlier this morning already and I was teasing out with those operators as to how that applied, to how it worked, so that we can look at some of those lessons and whether there is anything that we can replicate out of that, that comes on top of the payments that are already going to flow through to small and medium sized businesses.

So, yes, looking back at some of those past experiences, the action we took last week, one of the principles that was at the forefront of that was how do we make sure that in getting money out to small and medium sized businesses, we do it in ways that are efficient and quick and automatic. And so, that's why we're using the pay-as-you-go tax system that, basically, payments back to businesses will be automatic, dependent upon the size of their payroll. So, that that is really about trying to help those who employ more to keep more people on and sustain those businesses. But we can certainly explore out of this $1 billion fund, other avenues on top of that, and those Cyclone Larry lessons may well help with that.

John MacKenzie: Do you need one more point, Michael?

Caller Michael: Yes. My last point is that I think it's absolutely pertinent that the Prime Minister does talk to the CEOs of our large banks to make sure that they are acting responsibly, to make sure that we are in hardship times, that potentially, if our loans or our mortgage payments are delayed or deferred by six months, we’ve still got to pay off those loans at the end, and that would be a massive big help to us as well.

Simon Birmingham: Michael, we are doing that and the key message for the banks at present is: there's little point foreclosing on a tourism business in a region like North Queensland at present because who's going to buy it and how is the bank…

Caller Michael: Correct.

Simon Birmingham: … going to recover their loan? We know that things are so dire right now. The best thing banks can do is to show some leeway. And I think, in credit to the banks, post the royal commission as they were dealing with the drought, they have shown some leeway to date and I want to make sure that they do that through these circumstances as well. But we also have to be realistic. They have balance sheets that are going to come under unprecedented pressure themselves. And so, working through realistically with them what is going to be possible, how we deal with those stressed businesses, but businesses that when we get to the recovery will still be viable. This is, as some have put it to me, like farmers keeping hold of their breeder stock during the drought. You need those breeder stock to be able to recover at the other side. And we, as a country, in terms of the tourism industry who employs, across this nation, around 1 in 13 Australians, need to make sure that we still have viable businesses, viable attractions, viable accommodation properties at the end of it, so that when we seek to recover and can get the tourists back, there's actually businesses to provide them with the experiences to continue to make this country worth visiting.

John MacKenzie: Michael, we have to move on, I’m sorry. But thank you. Michael Trout there, Blazing Saddles and former member for the state seat of Barron River.

I know you’ve got to go, Simon Birmingham. Just a moment- and of course, your focus in on tourism, we understand that, that’s why you’re in here today. However, I presume each day there would be a hook up with all you ministers with the Prime Minister, and you’d talk about the various aspects of this monumental crisis. We’ve got a lot of elderly people in town, like everyone has, they’re particularly fearful of various things. For a start, number one, infection. But also number two, they’re worried about getting their sustenance, getting their food, some of them don’t get out all that well that effectively. What do you say to them?

Simon Birmingham: I want to reassure people that supply chains for food and basic services and medicines and so on, we have great confidence that they are and will be sustained into the future. I know that there’s a degree of panic out there right now, that panic is not justified. We warmly welcome the fact that companies like Woolworths have made announcements overnight that they are going to have a dedicated one hour a day, initially for the disabled and the elderly to come and do their shopping, which means it’s at the start of the day, straight after the supermarkets have been cleaned, so they can have greater confidence in their safety of going there. But also they get priority to get in and to do the shopping. But everybody, don’t be silly about the way in which you engage in supermarkets. For god’s sake, don’t pursue or engage in the ways we’ve seen where people are literally fighting over toilet paper, be mindful of your neighbours and your friends and everyone else, that if you take everything off the shelves. Well, that is what’s creating the shortage of some things at present, that people are hoarding unnecessarily so, and putting pressure on the system. But also please, reach out to the elderly and loved ones and make sure that you’re in contact with them; it may not be able to be personal contact depending on how this evolves.

But we will have to be mindful that older Australians are the at-risk category and that we need to keep some social distance from them on the way through, but don’t leave them feeling isolated. As the PM said, you can leave a bowl of food on their front doorstep, if you can give them a buzz, if you can make sure they know how to use Skype or FaceTime or other means to keep in touch. All of those things are going to be really important in the months to come.

John MacKenzie: I presume you’re getting medical updates every day. If you had to give an estimation, what do you think would be the duration — are they saying to you three months or five months or seven months, give me a bit of a hint.

Simon Birmingham: This, John, is the unfortunate trade-off that we have. You know, every effort we’re taking at present is to try to flatten the peak that occurs, that by reducing that peak in the incidence of coronavirus, you spread out how long it goes on for. What people need to understand, particularly those who are saying: well, this is causing the economic harm, it’s driving my business into the ground or threatening my job, is the reason we’re flattening that peak, is that no health system in the world, if you let it run naturally, can cope with the number of admissions into intensive care, and it then would be necessary. And that’s why we’re seeing such a high death rate in Italy at present. That’s what we are keen to avoid in Australia, so essentially by stretching it out we try to minimise the number of deaths that occur in Australia by ensuring access to those intensive care services.

And so everything we’re doing as a government, our cabinet discussions and leadership discussions at present, are about first and foremost making sure our health system is prepared as possible, that the decisions we’re taking are about reducing the spread across the community, but of course as an economic minister I’m also here firstly listening to businesses trying to understand, as we’ve been discussing, what else we can do to help save jobs and get people through it economically as well.

John MacKenzie: Who’ve you met this morning and who will you meet for the rest of the day in Cairns?

Simon Birmingham: So we started out at the Cairns Aquarium, and of course they’re a business already under the pinch and who have seen a number of their casuals lose hours, lose shifts, lose jobs to date, and they’re under that real pressure. And so they’re unique as well in that the things that businesses like that one are saying is: we still have to operate at least a core level of staff to be able to maintain the water filtration, to be able to maintain the species. So even if we don’t have visitors coming through the door, we can’t just mothball the place. So talking to those sorts of operators, Tropical Tourism North Queen- Tourism Tropical North Queensland, their board. I just spent more than an hour with- going around the table from accommodation providers to tour operators to those representing sole operators and sole traders out there who we’re very mindful of. So really trying to get as broad a feel for business and industry as we can today, and we’re talking later to the restaurant, hospitality sector as well, knowing that it flows right through every part of the supply chain.

John MacKenzie: Yes. Yes, yes, yes. Really appreciate this. By the way, we’ll stay in touch if that’s alright with you. I presume there’s going to be developments- well, certainly, maybe even daily, but certainly weekly I would imagine emanating from your office, so we’ll stay in touch. Really appreciate your time in studio today.

Simon Birmingham: Thank you very much. Thanks for the time.

John MacKenzie: Your Australian Tourism Minister, Simon Birmingham.

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