Transtasman bubble ‘offers $4b’
Report reckons relaxing border could mean 50,000 jobs by year’s end
Atranstasman bubble could see a $4-billion-dollar “turbocharge” boost by the year’s end, according to a report by Ernst & Young Australia. That scenario is based on the border opening as of today, and the “business as usual” Australian tourism spend here of about $2b being doubled due to an increased propensity for travel.
But a leading epidemiologist warns against viewing economic and health impacts in isolation from each other, and calls for New Zealand to continue its cautious approach.
A transtasman bubble has been on the cards since May, and tourism operators, business associations and the air travel industry have all been busy lobbying for it to happen as soon as safely possible — particularly as the ski season gets under way.
Prime Minister Jacinda Ardern yesterday said that being able to do so safely remained the key factor, citing the recent outbreak in Victoria as putting the brakes on the idea.
With most other Australian states having largely pursued and achieved a form of elimination, the door was open for state connections, but the “ball is in Australia’s court” as to how fast that could occur, she said.
“If Australia chooses to allow stateto-state travel that is their decision, and that will determine the speed of any transtasman bubble,” Ardern said at yesterday’s post-Cabinet media conference.
Having a form of quarantine-free travel between the countries — and any others — would depend on having similar elimination targets, being free of community transmission and for how long, a high standard of testing and contact tracing, and a good flow of information along with border management. “But ultimately number one is safety,” Ardern said.
New Zealand Aviation Coalition co-chairman Kevin Ward said it was interesting to see the Ernst & Young report, and the scale of the economic benefits of travel between the two countries.
The report looked at three scenarios:
● Business as usual.
● Keen and eager, where half the tourism expenditure lost during the border closure is recovered along with normal tourist spending.
● Turbocharged, based on propensity for travel doubling as seen in shopping figures post-lockdown.
New Zealand tourists spent $2.3b in Australia for the year ending December 2019. Meanwhile, Australians spent close to $4b here in the year to September last year.
EY estimated different scenarios of spending, were the borders to open right now. Under business as usual, it estimated Australian tourists would spend just over $2b by the year’s end, with an increase of more than 22,000 full-time jobs.
This would be doubled to $4b under a “turbocharged” scenario, with nearly 50,000 fulltime jobs.
New Zealand tourism spend across the ditch could be $1.3b and $2.5b for those scenarios respectively.
Queenstown mayor Jim Boult said it was “enormously important” to reopen travel with Australia as soon as it is safe. The snow was falling, skifields were open, and, while many Kiwis were flocking to the slopes, they normally made up only about half their visitors — the bulk of the remainder coming from across the ditch.
“[The transtasman bubble] is hugely important, and could mean the difference between businesses failing and people keeping their jobs.”
The region appreciated how Kiwis were travelling in droves postlockdown. They also appreciated the ongoing wage subsidy, which was keeping unemployment numbers relatively low, and recent Government support for migrant workers slipping through the cracks.
Auckland’s Heart of the City chief executive Viv Beck said spending in the central city was down 20 to 30 per cent, with a large chunk of that from the 19 per cent usually made up by international visitors. “[The report] really shows the benefits of opening the border, and we would certainly be keen to see that as soon as is safe.”
The EY report closely follows another, released last week by Sir Peter Gluckman, former Prime Minister Helen Clark and former Air New Zealand chief Rob Fyfe, which said an extended delay in opening the borders would cause huge damage to the country’s economy and social wellbeing.
“Nobody is saying open the borders today . . . but at some time in the near future we have to have a strategy in place of gradually opening the border, because we cannot [keep it closed] indefinitely,” Gluckman said.
University of Otago epidemiologist Professor Michael Baker said the EY report looked at only a “small part” of the equation.
“I assume they are meaning when travel is back to a pre-Covid level with no restrictions, and that is not a very practical option.”
Nobody is saying open the borders today . . . but . . . we cannot [keep them closed] indefinitely. Sir Peter Gluckman