Government to subsidise domestic fares to get Aussies travelling

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Michelle Grattan, University of Canberra

Nearly 800,000 half-price air tickets for travel to and from holiday areas will be provided under a $1.2 billion program to support aviation and tourism announced by the Morrison government.

The measures are designed to assist these industries, still hard hit by the effects of the pandemic, after JobKeeper finishes late this month.

The cheap fares will run from 1 April to 31 July.

The loan guarantee scheme that operates for small and medium sized businesses is also being expanded and extended for enterprises that leave JobKeeper in the March quarter.

While this is an economy-wide measure, the government says those eligible will be especially in the tourism sector.

Thirteen regions have been designated initially for the cheap flights – the Gold Coast, Cairns, the Whitsundays and Mackay region (Proserpine and Hamilton Island), the Sunshine Coast, Lasseter and Alice Springs, Launceston, Devonport and Burnie, Broome, Avalon, Merimbula and Kangaroo Island.

The number of tickets will be demand driven, as will the places the flights depart from, but it is estimated there will be about 46,000 discounted fares a week over 17 weeks. A return ticket counts as two discounted fares, the government said.

Under the loan initiative, the maximum size of eligible loans will be increased from the present $1 million to $5 million. The maximum eligible turnover will also be expanded, from $50 million to $250 million.

Maximum loan terms will go from five years to 10 years, and lenders will be allowed to offer borrowers a repayment holiday of up to two years.

Eligible businesses will also be able to use the scheme to refinance their existing loans, so benefitting from the program’s more concessional interest rates.

The government says more than 350,000 businesses which are on JobKeeper are expected to be eligible under the expanded scheme, for which loans will be available from the start of next month and must be approved by the end of December.

For international aviation, there will be support from April until the end of October, when international flights are expected to resume. The assistance across both airlines will help them maintain their core international capability, keeping 8600 people in work as well as planes flight ready.

Among the assistance for aviation, several existing support measures are being extended until the end of September, including waivers for air services fees and security charges.

There are also extensions for the business events grants program, the assistance for zoos and aquariums, and the grants to help travel agents.

More than 600,000 people are employed by the tourism sector with domestic tourism worth $100 billion to the economy.

Tourism has suffered severely from the closed international border and from the state border closures and restrictions.

Scott Morrison described the package as “our ticket to recovery … to get Australians travelling and supporting tourism operators, businesses, travel agents and airlines who continue to do it tough through COVID-19, while our international borders remain closed.

“This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

Will the subsidised airfares be enough to get you travelling again? Are you concerned about being stranded by snap lockdowns?

This article is republished from The Conversation under a Creative Commons licence. Read the original article.

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Written by The Conversation



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