Labor has questioned why 13 regions to benefit from half-price flights to boost tourism include marginal seats in Tasmania and Queensland while neighbouring areas miss out.
The Morrison government on Thursday unveiled its $1.2bn tourism and aviation rescue package combining discount flights with business loans – but the scheme has already been labelled “second-rate” by the two sectors that warn it is an incomplete replacement for jobkeeper wage subsidies.
An estimated 800,000 government subsidised tickets will be offered over the scheme’s duration which includes the Easter and winter school holidays.
Return flights to 13 eligible locations will receive a 50% discount between 1 April and 31 July.
Initially, the government has listed Gold Coast, Cairns, the Whitsundays and Mackay region including Proserpine and Hamilton Island and the Sunshine Coast in Queensland.
Lasseter and Alice Springs in the NT, the Tasmanian towns of Launceston, Devonport and Burnie, Broome in WA, Avalon near Melbourne, Merimbula in NSW and SA’s Kangaroo Island are also included.
Margy Osmond, Tourism and Transport Forum chief executive, said the package “will not be enough” and that without ongoing support for non-aviation businesses across the sector, hundreds of thousands of jobs were still at risk.
“From accommodation producers and tourism operators through to transport companies, attraction operators, business event organisers and cultural organisations, many businesses are at the wall.”
Osmond repeated calls for a “dedicated and targeted wage subsidy” for the industry after jobkeeper ends, and said she planned to lobby the government to introduce “improvements” to the package in the coming days and weeks including more cash and less reliance on debt.
The Australian Chamber of Commerce and Industry executive chair of tourism, John Hart, said the package was “narrowly targeted” and “disenfranchising for many hard-working operators in the tourism industry whose plight is being ignored”.
He argued the package failed to boost struggling CBDs such as Sydney and Melbourne, to provide immediate cash support and failed to set out a timetable to reopen to international visitors.
Graham Turner, the Flight Centre founder and chief executive, does not believe the government’s tourism support package will “save many jobs at all”.
Turner told the Guardian that while airlines had indicated they intend to distribute the half price flights to be booked by travel agents, that regional focus of the initiative meant it would only have “a fairly small positive impact on tourism”.
Turner said the key to the industry’s strength would be state borders remaining open, but he also called on the government to reopen international borders by July when older and vulnerable Australians were due to be vaccinated.
Airlines and the Airports Association cheered the announcement, but Virgin’s chief executive, Jayne Hrdlicka, told staff it still intended to complete its “business reorganisation” including measures to remain “cost competitive”. More than 10,000 jobs have been lost in the aviation sector since the start of the pandemic.
The government announcement did not explain how the eligible regions were selected, but said the final destinations were subject to discussions with the airlines.
The Labor leader, Anthony Albanese, said the package was a “selective aviation package” that did nothing for tourism operators.
Albanese told reporters in Geelong the government “always looks at the electoral map” when allocating grants and economic support. He noted the two marginal seats in northern Tasmania would be supported, but not southern Tasmania.
“In the Northern Territory, Darwin gets nothing, but of course Alice Springs and Uluru in the seat of Lingiari, gets support,” he said.
“If you are in Cairns, the marginal seat Leichhardt is included in the package but if you are in Gladstone or some other areas of Queensland that also rely on tourism, then you get excluded as well.”
At a press conference in Sydney, Scott Morrison said areas such as regional New South Wales including Dubbo and Orange had been overlooked because they had benefited from “internal travel”.
“What we’re focused on here are those areas in particular that are heavily dependent on international tourists, and on planes coming in to support that tourism,” he said.
The discounts will be off the average fare and available on airline websites from 1 April.
But Albanese called on the government to explain how it would ensure airlines did not hike prices, noting that an increase in costs could wipe out any benefit to the flying public even while taxpayers pick up half the bill.
Earlier, in a statement, Morrison said the airfares would help Australians support tourism operators, businesses, travel agents and airlines doing it tough during the pandemic.
“This is our ticket to recovery,” he said.
“This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard.”
Qantas, Virgin and a handful of smaller regional carriers will be the main beneficiaries. Airlines that have operated on the routes for the past two years are eligible for the discounts.
Business loans of up to 10 years with a two-year principal and interest repayment holiday will be available between April and the end of the year for small and medium firms that graduated from jobkeeper this year.
The maximum loan will be increased from $1m to $5m and businesses with turnover of $250m will be eligible.
Hart said that CBDs were the gateway for international visits and had lost more $22bn in the past 12 months, with businesses in the tourism and accommodation sector only kept alive by jobkeeper.
“The hotels will not pick up even when office workers start coming back, they need tourists and, in particular, international tourists,” he said.
The chief executive of the Accommodation Association, Dean Long, said that in Sydney and Melbourne “80% of the market is from international and corporate markets which are still not operating due to government restrictions”.
“The lack of support in this package will result in a loss of jobs and slow our recovery once borders are open,” he said. “Our hotels in these two major international gateways currently have a forward booking rate of less than 10% for the next 90 days and desperately need immediate support.”
Stephen Ferguson, Australian Hotels Association chief executive, also criticised the package’s lack of support for hospitality businesses, particularly those in capital cities.
“Hospitality businesses were the first to close a year ago … We need to remember most hospitality and accommodation businesses are still heavily impacted by a wide range of restrictions such as international border closures.
“With jobkeeper winding up on 28 March, we are still very concerned at redundancies in our businesses which have been left out of this new plan.”
Ferguson said “the last thing” most venues would need is “more loans and even more debt”.
Morrison said tourism businesses “don’t want to rely on government support forever. They want their tourists back.”
The package also includes support to keep 8,600 international aviation workers employed between April and the end of October, the earliest prediction for flights overseas to resume.
In return, airlines will need to assure the government every month that planes will be ready to take off when needed.