Our uncomfortable Armageddon moment,

UNCOMFORTABLE truths have emerged in the past few weeks and they are about how unprepared the tourism industry has been in planning to emerge from the wreckage caused by the incompetence of the State imposed regional lockdowns as opposed to a containment strategy. The prevailing belief is that JobKeeper should be retained for as long as international tourists stay away.

This expectation is flawed. There is increasing evidence that international travellers are not going to return in adequate numbers for at least 18 months and this was confirmed recently when Warren Buffett of Berkshire Hathaway, the world’s largest investment house, dumped all his holdings in aviation and hotel stock worldwide saying “he thought consumer behaviour had changed for the long term” … hardly a vote of confidence in an early return to numbers of any consequence.

Our regional reliance on international visitation is well known accounting for 42 per cent or thereabouts of the total visitors but what is not well known is that the raw numbers were well in decline over some years before February 2020 pointing to structural issues that needed remedy post the GFC of 2007 but ignored. We have been driven by the incompetent Team Queensland mantra of Tourism Queensland to our considerable detriment for too long.

This is now our uncomfortable Armageddon moment when proactive industry and civic leadership is required to redefine our destination around the twin pillars of Australia’s northern international gateway to Australia and the Great Barrier Reef and Australia’s Tropical City.

It’s time to ditch the dreamtime expectation that Aussie taxpayers will continue propping up zombie operations in the absence of some serious scrutiny.

JobKeeper has served its limited well designed purpose and government interventions are now best focused in supporting those businesses with a demonstrated track record of previous success and capacity to recommence operations when the circumstances represent.

These will in fact form the cornerstone of the reconstructed tourism industry after the shakeout is complete and life returns to a degree of normalcy.

Key businesses that cannot survive the current situation should be assisted to hibernate or redeploy their assets until numbers of scale return as is the case in the resources, hotel and logistic sectors across this country. In industry jargon it is referred to as “care and maintenance ” and is part of operational planning.

This need is evident here with some marine operators who operate the larger and operationally expensive vessels and some transport, aviation and hotel operators. Those businesses who were marginal and relied on government handouts prior to 2020 need to examine their future prospects or cut loose.

Our destination and the tourism industry will not “snap back” to the start any time soon while ever we foolishly think that irresponsible state governments will not close down regions overnight and our international borders are effectively closed for the next 12 months.

Our best hope is that governments deliver incentives via policy fixes involving regional and remote taxation rates, insurance rebates, abolition of payroll

IT’S TIME TO DITCH THE DREAMTIME EXPECTATION THAT AUSSIE TAXPAYERS WILL CONTINUE PROPPING UP ZOMBIE OPERATIONS IN THE ABSENCE OF SOME SERIOUS SCRUTINY.

taxation, a relaxation on fees and charges regimes, remove the backpacker taxation impost and allow for accelerated depreciation allowances to encourage existing businesses to survive and thrive.

Alan Kohler best summed it up last week by commenting, “but surely it’s better to pay the minimum wage ($758 per week) for people to do something useful than to keep paying $500 a week for them to turn up each day and play Solitaire on the computer at a dead company walking”.

Kevin Byrne is executive manager of advocacy group Enterprise North