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The Great Recalibrate

There is no doubt that the combined economic impacts of COVID-19 and the bushfires have kept visitors at bay and left businesses across all sectors struggling, but there are few places this is more acutely felt than in Far North Queensland. As a region dependent on tourism where nine out of ten jobs are both directly and indirectly affected by the success of tourism, the picture is grim.

According to the Cairns Economy Impacts from COVID-19 report, commissioned to independent economic advisory firm .id Consulting by the Cairns Regional Council, pre-COVID-19 the Cairns economy was in a really strong position – Gross Regional Product (GRP) was above state and national averages (growing at 3.5% annually versus 2.2% nationally) and unemployment was well below state and national levels (4.3% regionally versus 6% state-wide and 5.2% nationally). In the four weeks preceding April, domestic travel dropped by 96%, international travel dropped by 99.9% and GRP for the June 2020 quarter is expected to drop by $386 million (16%).

“Cairns and the Far North region has around 10 million domestic visitors a year,” says Cairns Labor MP Michael Healy. “Six months ago, our unemployment figures were sitting around 4.3%, which is excellent. However, we’re forecasting the third quarter to hit well over 15%. There are 7,700 jobs lost without the support of Job Keeper, 21,000 that are supported. In a residential population of 167,000 the wide-reaching effects of this will be – if they aren’t already – devastating.

“Having said that, it’s not all doom and gloom – we are actively moving forward to open up the flow of people within the region. Currently, we’re two weeks ahead of the planned schedule. The safety and preservation for the lives of Queenslanders is absolutely paramount.”

Mr. Healy has revealed work is already going on behind closed doors to give the local industry a jump start.

“Behind the scenes, we’re working closely with some of the biggest employers in our region to make sure we have campaigns and great deals ready to go as soon as travel bans are lifted,” he said. “Domestic tourism and prolonged Government support will be crucial for Cairns as the city reels from the impact of COVID-19”. Recently, Mr Healy has flagged tourism projects including the Wangetti Trail and upgrades to the Cairns Convention Centre as crucial to getting the region back on track.

It is clear, however, that Governments will need to step in and deliver specific support for Cairns – including extending the JobKeeper program beyond the current six month timeline – as the harsh reality of the long road to recovery starts sinking in.  The Federal Government continues to back small business with the announcement that it will extend the $150,000 instant asset write-off for six months to 31 December 2020. Cairns and Far North Queensland businesses with annual turnover of less than $500 million will be able to take advantage of this extended timeframe to invest in assets to support their business as the economy reopens and coronavirus health restrictions continue to be eased.

The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided each costs less than $150,000.

Federal Leichhardt MP Warren Entsch said this extension is great news for local businesses and will give them additional time to acquire and install assets.

“Local businesses are the lifeblood of our economy and I want to do everything I can to assist them through this difficult time,” Mr Entsch says. “These measures are designed to support businesses sticking with investment they had planned and encourage business to bring investment forward to support economic growth over the near term. I know of several businesses that have already taken advantage of this program which is great to see because it has injected much-needed cash into our local economy.

“Economically, it’ll be quite a few years to catch up. From a health perspective, we’re on top of it. We are ready, medical resources are primed, we’ve only had a handful of cases in the north. We’ve had ongoing testing and plenty of medical supplies available. We are prepared, should there be a second wave. Let’s have the same achievements in relation to the economy. People have accepted so much so far, but now cabin fever is setting in.

“We are totally dependent on airlines, and we’re not going to see significant improvement until we open our borders. While it’s been the right decision to hold off up to this point, we do need to move a little quicker in reopening for tourism and for the airline trade. There’s been so much support from the government so far in the way of Job Keeper and Job Seeker, as well as building packages and loan relief. So now let’s get those planes in the air.”

Mayor Bob Manning holds a positive outlook regarding the road to recovery.

“As a community we have been tested before – by the pilot strike, the Global Financial Crisis (GFC) and natural disasters like cyclones,” he says. “We just need some Government assistance and we will do what we have done time and again, we will bounce back stronger than before.”

Cr Manning also believes the bounce back will be stronger with the support of the aviation industry. “We are heavily reliant on aviation,” he says. “While the drive-market works for some of the bigger metropolitan centres, the reestablishment of domestic flights into Cairns is vital to our recovery.

“We know that our product is good. We need to get the planes back, ensure there is strong investment in destination marketing for our region, and get our visitor numbers back to pre-COVID-19 levels.”

Whilst nothing in these times is ever certain, it is fair to say that the spirit of the Cairns and Far North region is indeed strong, and as we slowly start to shake off the shackles of COVID-19, Cairns will continue to push itself as the top domestic tourism destination, a strong agricultural and export industry region and the perfect place to relocate and set up that work-from-home office.

 

 

 

 

 

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