Leadership 2020 – Tourism, Aviation and Transport Summit Webinar

  • Transcript, E&OE

Australia Tourism and Transport Forum

Topics: Tourism industry in Australia post-COVID; Holiday Here This Year campaign.
30 July 2020

Margy Osmond: We would now like to welcome the Minister for Trade, Tourism and Investment Simon Birmingham who’s been one of the great warriors on behalf of the industry, always, but in particular over the last six months. I’m sure many of you will have questions for the Minister. So, let those fingers go. The Minister will be talking today about getting the tourism industry obviously back on its feet and what are the larger implications from the trade point of view, because we tend to lose sight what might be in the belly of those passenger jets when they’re coming in and out. So, our connection to both the manufacturing and the agricultural sector are critically important. David, over to you.

David Speers: Thank you for joining us this morning. Let’s dive right into, you know, an issue that’s obviously been on the minds of many in the sector and that’s these travel bubbles. Give us a sense, as the Minister responsible here, where talks are at with- well, you can tell us which countries that prospect the travel bubble.

Simon Birmingham: Well, hello David and good morning everybody. Firstly I just want to extend my thoughts to you and everybody in Victoria at present who’s doing it pretty tough, but also to TTF and the membership, I just want to throw a big thanks out there for what are enormous sacrifices being made across the tourism industry in particular; businesses suffering, individuals suffering. But it is to keep Australians safe and as we see what's been transpiring in Victoria, I think the rest of the country can see, as they have, even worse from what's happened overseas just that those sacrifices are worth it.

Now, a big part of those sacrifices are precisely related to the question you asked and that's about international travel restrictions and the fact that one of the first decisions we made as a Government was to close the border with China. That spread to other nations as COVID spread and ultimately saw us essentially sealed off the international borders. And it has been a real key in keeping Australia safe. You can see by the failure of quarantine and what it's meant in Victoria just how important those border restrictions have been overall and how much worse things would have been if we had unregulated flows coming in.

That means the reopening process is not an easy one. As the Deputy Prime Minister said before, we shouldn't expect widespread re-opening anytime soon. The work is underway in terms of how we might get to a New Zealand travel bubble and how we might handle discrete categories of individuals like pilots of international students coming back in. But even those are complicated by what's happened in Victoria. So, in terms of the New Zealand travel bubble, Home Affairs and the airports have all been working carefully to put in place the necessary safeguards to make sure that Kiwis coming in and indeed Australians travelling through would be kept safe and kept isolated from other flights returning from other parts of the world that might pose higher risks. So there's logistical issues there and there are a range of other practical considerations.

I think we do also in terms of New Zealand have to be realistic right now, as Australians look at it from the perspective of New Zealanders and know that what has unfolded in Australia over the last few weeks obviously slows down their decision making and sees them take a higher degree of caution and that's entirely understandable. Clearly, they're not going to want flights in and out of Melbourne any time soon just as Australian states are showing nervousness around what's happening in New South Wales. That will be a natural extension of nervousness to New Zealanders and it means I think we're going to have to continue to show a degree of patience about exactly when we're going to see that open up.

I still hope that it can be achieved this year, whether it is to all of Australia or whether it may be that our quarantine in Victoria extends to something that enables a travel bubble to open up from New Zealand to perhaps the rest of Australia. That's something that we'll just have to see. They’re of course about to go into a caretaker period for an election as well, so that may pose some challenges in terms of just narrowing down the timing and the details too at this point.

David Speers: So, a number of challenges there. So just to pick up on what you said about your hope that by the end of the year, we could see some travel arrangements with Australia and New Zealand. But from what you’re saying, is there a willingness on the part of the Australian Government to carve out Victoria and allow other states to have travel arrangements with New Zealand? You are willing to do that?

Simon Birmingham: David, we've acknowledged the importance of the quarantine in Victoria and we're supporting that with military personnel along with the New South Wales border, along with the South Australian border and of course, those personnel are also supporting a range of other activities within Victoria. So in that sense, if we came to pass where New Zealand is ready to move and the rest of the country in Australia was ready to move but we had this quarantine still in place around Victoria, well then that's an idea I think it is worth us exploring and entertaining and seeing if we can manage to work it out with the Kiwis where they have confidence where they can travel safely to Sydney, to the Gold Coast, to Adelaide or Perth.

David Speers: So, that's essentially a yes, as long as it can be done safely and both sides are happy with it, you’d be willing to let travel without allowing Victorians. I remember the PM saying months ago, you know, you're going to have to be allowed to travel in Queensland before Queenstown. So, has there been a shift thinking, given what's happened in Victoria?

Simon Birmingham: Well, the Government has demonstrated our support for the quarantine arrangements of Victoria. So, the decision around Victoria is one that has been taken jointly, if you like, in New South Wales, Victoria, Federal Government, South Australia collaborating and working there in that regard of supporting the quarantine for Victoria. So, it's a different scenario to what have been some of the more ad hoc decisions perhaps that we've seen by some of the states and territories, and we still see some vast differences there. I do think there are failings in some of those decisions of other states and territories in not taking a proportionate approach in terms of opening up their borders. I understand the concerns. I understand the motivations, but the idea that Western Australia still won't open up to people from Tasmania or South Australia despite very successful management of those states is a concern and it does of course dampen the ability to recover in the aviation sector and the ability for a number of tourism operators to recover.

David Speers: Just on that point, you know, this is obviously a hugely popular move though for Mark McGowan in WA; his popularity ratings are stratospheric. But your view is that this is not good for the national economy and not even necessarily on a health basis, to maintain those sort of interstate border closures.

Simon Birmingham: I don't think the blanket approach is proportionate to the risk that is being managed and that’s obviously the key consideration. So the decisions – and you can contest the proportionality in these ways, but the decisions that other smaller states and territories and taken in relation to New South Wales have been graduated to different extents whereas WA has maintained this blanket approach to the entire country including jurisdictions that have shown no community transmission and barely any cases of COVID in- in recent times.

I think that lack of proportionality that particularly concerns me. We were headed, I hoped, July 20 was looking like a magical date when we were going to see much of the country reopen to one another. That was the date that the South Australian Premier earmarked to open up to everywhere if it was safe to do so. Queensland appeared to be on track to do so. The NT, Tasmania, and WA was the holdout there. Now, obviously, those states have revisited that clearly in relation to Victoria understandably and with Commonwealth support around the quarantine there. They've revisited in relation to New South Wales to various degrees too, but they are behaving at least in a way where what they're doing has an argument around proportionality to it and that they are managing the risk.

David Speers: What about Queensland’s announcement yesterday that it's going to say- it’s going to stop any travelers from greater Sydney from Saturday?

Simon Birmingham: I understand the decision of the Queensland Premier there. It concerns me that what we will see as a result of the on again off again approach on these things is a real denting of confidence when it comes to consumers making forward bookings in the future. That's a real challenge and problem for the industry, and so when you do get to a point that that decision is again reversed, and hopefully New South Wales continues to manage to stop the community spread and it does get to a point where Queensland and SA reverse their current restrictions on New South Wales. But will New South Welshmen, will Sydneysiders have confidence to then make a booking to travel to Queensland, or will they only take last minute trips. And so, I think there are lasting repercussions of a decision like that one that will take a little bit longer to overcome.

David Speers: I’m assuming you can’t put any sort of dates around when- all this will reopen. I mean, it’s impossible- as you say, this was hoped to have been done by July, there was a three-stage roadmap the Prime Minister held up. You can’t do that anymore, can you?

Simon Birmingham: There’s no clear certainty in that regard. You reported the indications from Victoria as to just how dire things are potentially looking there in terms of today's stats. Obviously, that is impossible to predict now when other states could open up to Victoria. Everyone is just watching with bated breath and enormous hope that New South Wales, who have some of the best contact tracing systems in the country, if not the best, and doing an exceptional job, and we just wish them every success as we do Victoria to get us back to where we were and the very hopeful scenarios that we had.

David Speers: Just back on the international front, we talked about New Zealand. What about other countries in the region, Singapore, and indeed you didn’t talk about some restricted access for students as well. What’s happening on that front?

Simon Birmingham: So, we have agreed to consider pilots in relation to the entry of students. One of the complicating factors stemming from what's happened in Victoria has been that we've seen the limit on international arrivals into Australia now put in place by some of the states and territories to manage the numbers of people passing through quarantine. Unfortunately, community confidence around quarantine has in some ways been dented as a result of that. So, there's going to have to be additional, I think, belts and braces approach to safeguards around international students. That was always a model considered on the basis of, of course, because they're here for years, 14 days quarantine is a reasonable consideration in that regard. We haven't changed our willingness to look at pilots if the states present a clear well-argued and safe approach for those pilots, but it is a matter for-

I know that some of the states are working on different options, but I don’t think any have reached that final point of: here is the detailed proposal that has got all the I’s dotted and T’s crossed at this stage. In terms of other business related travel to other markets, if we can manage to overcome some of these first hurdles of how we manage it with New Zealand and how we manage perhaps other targeted piloted managed arrivals, then there might be scope for us to have a look at other lanes of arrival for very targeted business travel purposes or the like. Of course, there are exemptions to deal with those that are really necessary in terms of investors, in terms of people coming in to take up senior executive positions for overseas firms that we've been practically working through, but there are a very tiny number. In the end, we are largely I think waiting still for the big breakthrough, and that will be what's necessary to get true opening up of borders.

David Speers: Can I just get a sense of whether there’s the prospect of anymore government support for the tourism sector given all of this and the uncertainty around what you’ve just laid out there. You know, as we approach the Budget, is there thinking, is there planning to give more help to the sector, and in particular around that confidence – you’re bang on – what does it do to the sector when people are so reluctant to plan a big trip if it’s going to called off because the borders shut. I know there’s an insurance option that governments can work on here, to give a bit more confidence to tourists even domestically to plan ahead.

Simon Birmingham: So, we are incredibly conscious of the impacts of the tourism sector. Everyone would have seen in the lead up to the decisions around JobKeeper that when the PM was questioned or any of the other senior ministers, often we would single out the tourism industry for acknowledging it faced some of the earliest challenges of the crisis and was probably going to be one of the last sectors to truly recover. We are seeing increasingly an industry now that is a tale of many different circumstances, that in those states that have successfully reopened in terms of their domestic activities, there's almost a mini tourism boom that's come about in intrastate travel for parts of regional Australia and so on. A lot of anecdotal feedback from the recent school holidays that across Western Australia and South Australia, many of the regions were enjoying some of their best winter school holidays they've seen in years. That's fantastic news for those operators. And it's a shock- a sign, I think, that there is a willingness by Australians certainly to get out there in terms of drive tourism, and to get out there and experience parts of Australia. Our battle is, of course, will that translate to a willingness to travel across the country, will it translate into booking some of the tours and experiences that traditionally have been more in the domain of international visitors, whereas Australians like to go and relax by the beach and have a bit of a quieter time in some ways. So, how do we sort of help to shape the tourism market in Australia where of the $65 billion that Australians spent last year leaving the country and spend overseas, how can we get more of that spent in ways of higher value tourism and activities across the country and-

David Speers: So a campaign focus on regional tourism you know, it almost writes itself. You can’t go anywhere else, so why not come to regional Australia?

Simon Birmingham: Well, you know, we will- Tourism Australia's been doing some great work as to how we scale up the Holiday Here This Year campaign when the time is right. We built that campaign post the bushfires as a statement of support for Australia. You're right. Australians now don't have any choice but to holiday here if they choose to take a holiday and are in the financial and health circumstances where they can. But you know, it's the type of holiday that will now matter as well to the industry in terms of just how much we can get people and say, back onto those planes, undertaking different types of tours and experiences. And of course, there are those parts of the sector and the industry that we know are feeling real ongoing impacts. Regions like Central Australia and North Queensland who are more reliant on international visitors and on flight based travel. We know that, of course, in the business and the conference and the events sector in the capital cities, there's enormous pain across the big hotels and all of the businesses that rely on them from laundry services to audio visual suppliers and a whole range of others. So we’re very conscious of that.

Your earlier question – will there be more for the tourism industry? Well we've just made the big decisions around extending JobKeeper but we will now double back down through my consultations with the tourism industry and others to assess what can be done, consistent with our principles of support being targeted and proportionate and time limited. But what can be done to get this industry through the crisis and back on its feet, knowing that there will be some lasting structural adjustments that I expect we'll see too.

David Speers: Conscious of the time here. Just to be clear on this, you are looking at further support for those who are weighing up how long they can stretch to get through this crisis, it’s a message of hang in there, there could be more coming?

Simon Birmingham: Our desire to stimulate economic activity across the country is still there. Our desire to make sure that we simply maintain business survival is still there. So we'll be having a look, whether it's in this year's budget or in the lead up to the end of the JobKeeper program about the status of the sector and the economy overall and what's necessary at those junctures.

David Speers: Sorry, look, it’s such a fascinating period, very difficult period, I know, for a lot of the sector. The same transition going on with the benefits for regional tourism as well, it's just fascinating. So thank you very much, Minister, for talking to us. I’ll hand back to Margy now, who’s’ going to have a few more questions for you.

Simon Birmingham: Thanks David.

Margy Osmond: Thank you for joining us this morning, much appreciated. I know this was a session everyone was very keen on. So, just talk to me a little bit about, and I said before, the Government has been terrific at realising the critical issues that face the tourism sector and its linkages back to trades and all sorts of things. I’m just curious too, that sometimes a bit of the invisible sector in the industry, is the travel agents market, the distribution lines. They have some pretty unique challenges at the moment. Do you see sort a process where they might be supported into the future because it is such a pivotal part of the structure, and yet so geared towards international in many instances?

Simon Birmingham: It is Margy, and we do need to be mindful that in terms of the challenges we face in recovering when we reopen those borders, is the highly competitive environment we’ll face to getting international flights back on. The fact that airlines are facing balance sheets that have been smashed to smithereens, will be very cautious about which routes they commit to and in what frequency they make those commitments. So outbound tourism is, of course, a key part of that and travel agents are a big part of the story for facilitating outbound tourism, whilst also, hopefully, as many of them are trying to do, pivoting in supporting domestic tourism and as I was just saying to David – I think those travel agents can play a very important role in getting Australians to scale up what they’re doing in the domestic tourism market. It doesn't take much for an Australian to go online themselves and book their accommodation and work out where they're going to stay. But if we do want them to go out with quality tour operators and undertake experiences in adventure or nature based or cultural aspects, then that's where the travel agents with their skills and background and knowledge can hopefully help to encourage a bit more of that. Obviously, the structure of JobKeeper and those sorts of supports is there to help travel agents through just as much as it is city hotels or other affected parts of the sector. But I'm very mindful in terms of options for what we do in the future, is seeing are there ways to help the travel agent sector. And the special role I think they can apply to make sure that if we succeed in getting Australians to spend more domestically; how is it that we can make sure they spend it in ways that really sustain some of the product that we need for our ultimate international recovery too?

Margy Osmond: And I think also the aspect there too is that for many Australians, we don’t know our own country well enough. So, it seemed to me, that some of those travel agents have a terrific opportunity and almost responsibility to open our minds to some of the things that we might not have thought of doing here at home.

Simon Birmingham: I have said that if there's a silver lining, I hope that can come out of all of this it's that Australians end up as much better informed and passionate ambassadors for Australian tourism as a result of getting out and seeing a bit more of our great country.

Margy Osmond: Absolutely and I do think it’s a moment for a bit of a renaissance for Indigenous tourism and some of those sort of, perhaps less focussed on areas for locals. But can I just ask you a question, I might make this a last one because I am conscious of the time. We did talk a little bit before, when we were talking today about are there special groups that legitimately we might be able to let into the country like students and so forth. But I would’ve thought with your, you know, trade hat on as well, from an agricultural point of view, the working holidaymakers piece, it’s quite an important one. I’m not certain what the answer is but they do, for a whole lot reasons, need to be considered as a special group, I think.

Simon Birmingham: They are a special category and it is something that I think we will have to look through. There are pressure points that we see, you know, you heard the DPM speaking earlier about the demand for certain jobs in regional parts of the start of the year and working holidaymakers fill a number of those jobs in the agricultural sectors, they do so equally in the tourism sectors. There's probably less demand from tourism for some of those working holidaymakers and at present, the system is probably still working through the adjustments in the economy and the numbers that are in Australia right now.

But it's a sector that I'm very mindful of the special role they play, that particularly from a lot of key markets, you know working holidaymakers come or with the money they’ve saved, they spend the money they earn while they’re here and they probably ask mum and dad back home to send a little bit extra to spend while they’re here too. So, they’re great income generators for the Australian economy, but we do have to juxtapose the jobs they're doing with the reality of an Australian economy facing much higher unemployment and the need for us to also get Australians out there filling some of those jobs too. So there's a balancing act, but I know they are a special category, as you say, and one that as we look at how we manage arrivals back into Australia, if we can, I'd love to see us be able to do that some point down the track.

Margy Osmond: Minister, thank you so much for joining us this morning and for giving us your time. As I say, continuing to staunchly fight on behalf of the industry and we look forward to continuing to work with you on that. So thank you again.

Simon Birmingham: Thanks Margy. Thanks everyone, stay safe, stay strong.

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