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Australia’s border policy is costing it $319m a day

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
22 October 2020 2 minute readShare

Australia’s shutdown of domestic and international air travel has not only crippled the aviation sector, but has also caused harmful knock-on effects on tourism and hospitality, new research has outlined, putting the cost of the country’s harsh restriction at a towering $319 million a day.

According to new research carried out by EY at the request of the Business Council of Australia, the economic fallout from the shutdown of domestic aviation over the past seven months has topped $17 billion and $61 billion for international flights.

But not only has the aviation sector been crippled, Business Council of Australia chief executive Jennifer Westacott has warned of the knock-on effect on local hospitality and tourism.

“Every day flights remain grounded costs Australia $69 million or $2.1 billion a month. When you add in international aviation losses at $250 million a day or $7.6 billion per month, we are talking about an enormous hit to our economy,” Ms Westacott said.

The fallout includes widespread job losses across the aviation sector including airlines, airports, catering, and ground handling and transport services.

More than 34,000 people nationwide have been affected by job losses and furloughed positions, with the nation’s two major carriers laying off around 11,500 employees.

“The safety of Australians remains our number one priority, but states like NSW have put robust systems in place to manage this virus, so people can safely and freely get on with their lives,” Ms Westacott said.

“Our recovery will be stronger and faster if we can agree on a national timetable and transparent protocols for removing domestic travel restrictions.”

As such, the Business Council of Australia is urging the national cabinet to announce a plan for domestic travel before December and to begin mapping out the removal of international travel restrictions.

“We are not asking for a free-for-all — we need a highly targeted, careful and gradual reopening of the economy based on health advice with robust nationally consistent systems in place for departures and arrivals, quarantining, local containment, and digital tracking and tracing,” Ms Westacott said.

“Getting Australians flying again before Christmas would be a social and economic gift to the country, delivering an additional $3.3 billion.

“At the same time, we need to begin mapping out how we can gradually and safely remove international travel restrictions once health conditions allow.”

According to the council’s research, international aviation generates about $100 billion a year in export revenue and supports about 515,000 jobs across the country.

“Putting a nationally agreed plan in place for international travel will allow us to ramp up this critical sector once we get the green light,” Ms Westacott said.

Drawing attention to methods employed by other countries to open up their international aviation in a COVID-safe way, Ms Westacott urged the government to carefully consider the consequences of its approach.

“We can’t afford to be left behind and miss out on opportunities to establish safe travel corridors with other low-risk countries who have also managed the virus well. This would generate $20.5 billion for Australia over a 12-month period,” Ms Westacott continued.

“This is not a temporary problem for Australia. If we fail to begin carefully reopening, we will lose our international competitiveness and ability to attract investment and talent.”

The council’s analysis also showed how Australia is lagging other countries in recovering aviation activity, the impact on agricultural exports, the hit to regional tourism and the collapse of Australia’s business events industry.

Australia’s border policy is costing it $319m a day
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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