OSMOND, Ms Margy, Chief Executive Officer, Tourism and Transport Forum [by video link]

[10:03]

ACTING CHAIR: I welcome representatives from the Tourism and Transport Forum. I invite you to make a brief opening statement before the committee asks you questions.

Ms Osmond : Thank you for the opportunity to speak today. I think there has never been a more critical time for the tourism industry than right now. We thought COVID was bad last year, but this year is in fact much worse in the sense that we no longer have JobKeeper to support the industry, which has been a critical prop to the industry. We're now in a situation where, by the end of September, we will have lost 610,000 jobs from the industry. We normally have about 1.1 million jobs, so over half of the industry has literally disappeared, in terms of jobs. The September school holidays will be the fourth set of school holidays that have been a no go for the industry. Essentially, that equates to nearly $22 billion just for those four sets of school holidays. So the industry is in a fairly dire situation and suffering some fairly significant structural problems as a result of the loss of staff.

Before this latest set of lockdowns, the economy was doing very well and unemployment was very low everywhere except in our sector. Unfortunately, for many people it has been a case of 'we no longer see a career within the tourism industry, so we'll take our skills elsewhere'. What I'm saying, I suppose, is that they're not coming back in a hurry.

In terms of the aviation sector specifically, Australian tourism completely relies upon aviation. We're a long-haul destination and within Australia just about everything is a long-haul destination, so the aviation sector is incredibly important to us. We're now facing a situation because of the uncertainty around state borders in the first instance, so let's talk about domestic borders first. Australians have always been terribly famous for booking a holiday months in advance. Not anymore. Because of the constant worry about borders being closed, the uncertainty associated with that and the complete pain that is trying to get a credit or having your holiday cancelled and having to explain it to the kids et cetera, people now book at the very last moment. This, once again, makes it structurally impossible for the industry to plan and cope and understand what its forward bookings are going to look like. Let's take Christmas as an example, because we've got no certainty about Christmas. How many flights do you put on to the Gold Coast? How many people do you employ? What kind of food do you put in place? What kinds of provisions do you make available to people who might be coming, and where are you going to find the people to deliver that anyway? This problem of late booking has now become endemic in the Australian culture and is a real and genuine problem.

From the aviation sector's perspective, the problems around that are in fact compounded now, both domestically and internationally, by the fact that the rest of the world is starting to open up. As a consequence, the international airlines here in Australia are under immense pressure to send their aeroplanes and their specialist staff to other parts of the world where they can start working again. That's a real problem, because it doesn't mean they'll automatically come back. One of the things that's going to be critical in the next few months—and I say few months because these things have six-month lead times—is very significant route re-attraction funding from both state and federal governments to get those airlines and routes back here.

Let me give you an example. Sydney airport has normally got 42 international airlines flying into it. It's only got 12 now. We're going to have to get those airlines back. Is that just about tourism? No, it's not. The vast bulk of our high-yield, perishable agricultural produce goes out in the guts of a passenger plane. The vast majority of our high-yield manufacturing componentry comes into Australia from other parts of the world in the guts of a passenger jet. So the state of the aviation sector, both domestically, here in Australia, and, critically, internationally, has a bearing on a much wider group of industries than just the tourism sector, whether that be leisure or business tourism. If I just ask you to think beyond the dotted line on that, that, therefore, has a massive number of impacts on regional communities and manufacturing sectors all around the country.

That's probably as much as I need to say to start up. I hate to be Madam Doom and Gloom, but there are some very significant issues and problems for our sector. I live in considerable concern that, without a revision and reinstitution of something that looks a bit like JobKeeper for the industry, we will lose another 150,000 jobs between now and the middle of next year. I note, Senator, that you did mention with the previous speakers the issues around uncertainty, and I have to say that Australian travellers now are far more concerned about the uncertainty factors of borders being snapped shut than they are about COVID itself.

ACTING CHAIR: You're quite right. I'm in Cairns at the beginning of this week and there's not a city that's been so terribly impacted by COVID and shutdowns. My heart goes out to all of your members and workers in the industry. It has been terrifically difficult. We're probably looking at a generation of small business operators who provide the tourism experiences, accommodation and restaurants who would now be seriously thinking about, as you say, staying in the industry or exiting. Who, then, is going to fill those incredibly important roles?

I'm going to throw to Senator Sheldon to start questions and I'll come back to you when he's complete.

Senator SHELDON: Thanks again for joining us this morning. We very much appreciate it. I just want to go to a few matters. Thank you for your evidence so far. It has been very thought provoking. I'm just looking at a slightly different thing: under the government's initial vaccination plan, four million people would have been fully vaccinated by March, when JobKeeper ended, and international borders would have been opened by October. Do you think the premature end of JobKeeper was tied to those milestones and that the program should properly now be extended as those milestones are being pushed out?

Ms Osmond : I don't think there's any doubt about that. I think the issue for us is—and I've said this on a number of occasions publicly—that the government cannot keep asking us what the answer to the problem is and then ignore the answer. The answer is: a new version of JobKeeper. It's critical because what it does is link the employees to the businesses, so it gives us some sort of structural capacity to be able to continue. I think it is possible that the government made decisions on this based on a whole lot of projections and assumptions. But that didn't come to pass, and if there's one thing that COVID tells us it is that you need to be agile. You need to be thoughtful about this process. Now, JobSaver, which the New South Wales government have put in place, has great merit, but unfortunately it doesn't hook the employees to the businesses in the same way that JobKeeper did, and there are a range of complexities that we were able to deal with via JobKeeper because we had the time to do it that made it a much better tool. In addition, it's one that industry recognises and understands.

There are precedents of other countries having extended jobkeeper, specifically—and let me say that: specifically—for the tourism and hospitality industries. For example, in New South Wales the thresholds have been lifted from $250 million to a billion dollars for assistance specifically and only for the tourism and hospitality sectors, because New South Wales recognises we're a special case. Countries like Singapore put in place a wage subsidy scheme at about the same time that Australia did. Theirs was due to finish at about the same time, around March this year. They extended theirs automatically for six months because they could see that while they had border issues the industry was effectively in perpetual lockdown.

It's not that we think the industry just deserves a handout; that's not what this is about. We know, on the basis of our research, the number of businesses that are going to fail between now and Christmas, and it's substantial. From our perspective, it's a case of: if you want a tourism industry to be here, with the kind of content and staff that makes it a world-beating industry, or has made it so in the past, you're going to have to invest. Now, on our calculations, if you were to apply a version of JobKeeper—son or daughter of JobKeeper; whatever you want to call it—to businesses that were 50 per cent down on revenue from the same period in 2019 and if you were to apply it at the original level of JobKeeper, it would cost about $280 million a month and it would cover between 22,000 and 25,000 businesses and an enormous number of concomitant staff that would be part of that exercise. But, most importantly, it would ensure that, once demand returns and capacity and access returns, the businesses that make the industry what it is would actually be there.

Senator SHELDON: I just want to go to this question about the pressure that's on businesses now and what your thoughts are on the effect on businesses directly and how many have collapsed as a result of existing border closures due to COVID. Could you also just outline the number of businesses that have raised issues around the ability to assess the government backed SME loans? Have your members provided any feedback around this issue?

Ms Osmond : Can I say to you that, from the very beginning, in terms of our advice to government, we have made it quite clear that loans are not an option. The problem for most of the industry is that, after last year's COVID activity, they all have such huge burdens that the prospect of taking out yet another loan or of finding a bank, even with the 20-80 percentage arrangement, that is willing to in fact lend the money or of the businesses themselves being prepared to accept further risk is not realistic. It never was.

From our point of view, the process that's been put in place for Qantas is highly appropriate, but it should be extended to the wider industry. It worked! As I keep saying, there's no point asking a question about what's going to fix this and then ignoring the answer, and the answer is: a version of JobKeeper. The wage subsidy piece was got right the first time round, and it dealt with some of the issues to do with aggregated entities under single ABNs and all sorts of complexity because of the mechanism via the ATO et cetera, which made for an infinitely easier process. And it was uniform across the country. From the perspective of international businesses or national businesses, that uniformity is really important.

The other thing to remember is that the disaster payments, as they're currently arranged, apply to lockdown situations, as does JobSaver in New South Wales. They apply to the lockdown. The problem with that is that these industries are going to need support beyond the lockdown, and, if you're not in Victoria and New South Wales but in Far North Queensland, and [inaudible], you might as well be, because all of the travellers were coming from New South Wales and Victoria. So this is why the issue needs to be rethought; it needs another look, even for the big end of town. And I think this is the problem—that people perceive this as just a small business issue. It's not. It covers the smallest to the largest within our sector, and, for some of the biggest companies who've managed to hang tough up to this point, keep their staff and do whatever, that time is running out now. Given the number of jobs that we've already lost within the sector and the number of businesses, I would have to say to you that some of those bigger companies are actually going to be the structural saving of the industry, because they've got the capacity to survive. But they need some help, and that, unfortunately, once again, comes back to JK.

Senator SHELDON: You have raised those concerns with government. What has been the government's response to you and the organisation, regarding JobKeeper and those loans concerns that you've raised? Do you feel you're getting anywhere?

Ms Osmond : Well, obviously, conversations with government are confidential, but the issue for us is that we don't think the loans are a go, and we've said that from moment one, but they're still there. I had the very clear sort of sensation from government that they think the time for JobKeeper has moved on. I would argue that it has most definitely not moved on, and, for our industry, it is both appropriate and urgent.

Senator SHELDON: On the particular issue of the government's response: Qantas outsourced 2,000 workers. I understand that over $2 billion was given to Qantas without the appropriate strings attached. I'm not making an observation so much on what Qantas's outsourcing problem was, but on the irony that those 2,000 workers who were outsourced were not getting any assistance, but now—now that the Federal Court has found that they are insourced—they do get assistance for doing exactly the same job. Is that ironic to you?

Ms Osmond : I'd have to be honest and say I don't have much time for irony anymore. I'm watching an industry fail around me. From my perspective, and not to dwell on Qantas, but, given the problems we're going to have with international airlines, available planes, available pilots and available crew, whatever helps us keep those people in place so that we've got some capacity internationally, I am all for. But the bottom line is that you can't walk away from the fact that other countries have chosen to specifically support this industry with an ongoing wage subsidy scheme, and it is what's necessary.

Senator SHELDON: A number of the pilot unions and ones that are giving evidence today have raised this question about pilots and assistance to airlines to keep pilots connected, and, again, we're talking about Virgin and Qantas particularly, but we know the aviation industry is a lot larger than them. They've raised the concern that it goes to existing engaged workers, but, for those who have fallen out of the industry and have gone and worked somewhere else because they couldn't afford to stay connected to the companies—they have huge costs in upgrading their licences and retraining, and it now becomes almost impractical. Often people go into lower paid jobs, but they are better paid than no pay. Do you think the impact in the case of the pilots is one of the areas of concern? There is quite a large cohort, as I understand, of pilots who aren't actually now connected with their airlines and won't be able to get their skills and retraining done.

Ms Osmond : That's quite a specific question. I'm not certain that I could give you any direct feedback on that, except to say this issue of pilot capacity is a global problem. I had a small group of my opposite numbers in the US, Canada, Singapore and a couple of other places. They're all facing the same problems. It's not just pilots within our sector, to be honest. In a wider sense, it's a huge range of other skills within the industry that are in amazingly short supply just about everywhere in the world. That's why it's going to add such complexity to rebuilding the industry, because it's not going to be as simple as just saying, 'Well, we'll get them from other countries.' I would say, though, that at this point in time—probably less so for the pilots on the ground who are currently not engaged with an airline; I'm not an expert on that particular space—there may very well be within the industry a need to have specialised visa capacity and skills bubbles to bring particular skills into the sector to get it going again, because we've lost so many people. It's not just about the basic housekeeping type activities within companies. Backpackers are nice, and I'm sure we'll get those back, but it's a whole range of other skills that we can't lay our hands on at this point in time. Sorry I can't be more specific on the domestic pilots who are currently unemployed or unconnected to the aviation sector.

Senator SHELDON: Back to you, Chair. You have been very indulgent and supportive.

ACTING CHAIR: Thank you. Senator McCarthy, do you have questions for Ms Osmond?

Senator McCARTHY: No, I think Senator Sheldon was able to cover a fair bit for us. Thank you very much.

ACTING CHAIR: Thank you. Ms Osmond, you may have heard me asking the previous witnesses about vaccinations. How is that going broadly across your industry? Have you done surveys? What's the appetite for people to be vaccinated and take up vaccines?

Ms Osmond : We're working very closely with the New South Wales government and with the feds on the process around a vac pass. There's no doubt that the vast bulk of employees within the tourism industry would have a jab in a heartbeat. They see that as a critical part of getting on with business. Clearly, going forward, if you look at what's happening in different parts of the world now, there are two parts to this puzzle. If you're going to have vaccinated people attending events and going to museums and restaurants and goodness knows what else, you have to have vaccinated staff to go with that, because you can't really have one without the other. So it's really critical that we recognise that. In France, they have the pass sanitaire and the TousAntiCovid app, which is now accepted for people from the UK and wherever else. It crosses over with the EU pass. So there's a lot of that going on at the moment in the European environment. In the US, for example, if you want to go to a football game, all the players have to have been vaccinated, all the staff working for the company staging the event have to be vaccinated and everybody in the stadium who might work with them has to be vaccinated, and that's before you even get to the customers. That's definitely the kind of head space where this is going.

From our perspective, there is a huge amount of work now being done on the vac pass, which will make it possible for people who are vaccinated to enjoy a whole range of things that we used to think were terribly normal. What we're hoping is that that same process also might be applied to domestic travel so that even if there are lockdowns—which, it would seem, will probably, in some shape, form or fashion, be in our future for a while yet—people may be able to travel if they have proof of vaccination. There's quite a bit of that sort of stuff happening domestically, and I think there's a high level of receptivity both in the community and within the workforces to see that happen specifically so we can get on.

From an international perspective, we're facing a completely different set of issues. Home Affairs are doing a huge amount of work with their international colleagues at the moment on a digital stamp that will go on your passport, which is your proof of capacity to travel, in terms of vaccination. It is unlikely that we will see much in the way of bubbles from this point onwards; it will simply be a case of countries only accepting people who are vaccinated. That's all there is to it.

From our point of view, that then begs the question: what vaccines are you going to accept? Our biggest market up until now has been China, which has Sinovac, so are we going to accept Sinovac? Our biggest potential market is India. Which vaccinations from India are we going to accept? At this point in time the EU, for example, won't accept AstraZeneca that's made in India. Will they accept AstraZeneca that's made in Australia? We don't know that yet. So there's a whole range of issues to do with the international vaccination piece, and much of the work associated with people being able to come into the country will happen as a combination of the various Home Affairs departments as well as the aviation sector, which will largely have to manage this process on the ground at both ends.

There are some other aspects of this that will roll out for the aviation industry which governments are going to have to be very cognisant of, and that is that when places like Heathrow reopen for 'freedom travel'—'Let's all get on an aeroplane'—it is currently taking between five and six hours to check in at Heathrow Airport. I'm sure you've all been through Heathrow; it's not great, but it's never been this bad. That is largely to do with the fact that the processes are that much more complex now, as they rightly have to be. Do you have enough border staff on the ground? Do you have enough of what it's going to take? So the whole process of providing aviation services is going to be more expensive for both governments and the private sector, and the route attraction piece is going to be critical in the future. Sorry, I veered off the point a bit there, but the vaccination piece domestically and internationally is going to be crucial.

ACTING CHAIR: You've actually raised some really interesting points that I had not considered about which vaccines would be acceptable to different countries and what's our consideration in that place.

Ms Osmond : Where do you promote Australia? Where do you spend your promotion dollar on getting people to come to Australia if you don't know which vaccines from which countries you're going to accept?

ACTING CHAIR: Goodness! As a senator—and I'm not sure if my colleagues are having the same experience—I find that my inbox is filled with messages from people saying that they don't want a vaccine passport. They demand to have the same sort of freedoms that they have enjoyed previously. How is the tourism and transport sector going to deal with people in that case? Have you formed a view? The Prime Minister is saying that there's not going to be compulsory vaccination but that we're encouraging Australians to get to the 70 per cent level, but what is your industry's view on how they manage people's concerns—even people who will be vaccinated but don't want to carry proof? How are governments going to deal with those things?

Ms Osmond : I think governments are attempting to make this as easy as possible. In fact, the minister responsible in New South Wales had his happy smiling face posted on Instagram this morning with the first mock-up of what the vac pass will look like. Essentially, if you check in with a QR code, which you pretty much have to do everywhere you go now, it will double-loop back into the government system; so it will shake hands with the federal system and your vac pass will literally be two ticks on the one face of your phone.

From the point of view of my industry in its widest sense—pubs, clubs, cinemas, restaurants, hotels, aeroplanes, business events, Harry Potter and the Cursed Child and Hamilton; you name it, across the board—everybody is willing to run the processes that will be necessary for their businesses to do the check on the double pass to get their businesses open again. It's also quite important to understand what a potential driver reopening those businesses may be as to the next level of vaccination, because 70 per cent won't cut it. We've got to get past 80 per cent for us to open internationally. You only have to look at what's happening in places like Israel, where they are the most vaccinated place in the world, and they're already into the booster phase and looking at potential lockdowns in a range of places because they have to.

For us, there are issues around a vac pass. While they may not be long term—and we certainly hope that they are not, that they are going to be short to medium term—they will allow industry to open. It is about safety. The most important question you can ask your staff when you ask them how they think about vaccination is: how do you feel about working with people who aren't vaccinated? Uniformly, across the board within the lifestyle industries, when that question has been asked, the vast bulk of people have said, 'We would prefer to work only with people who have been vaccinated.' The same will apply to people going to pretty much everything from the cinema or the theatre to an art gallery or whatever else. I think there's a desperate hunger to get open and get up and running, and if this is the way to get there, then so be it.

We're in the early days, though, and I do take your point, Senator, that there will be exceptions and there will be other things that will need to be considered as part of that process. I'll give you an example. What if it's a Wiggles concert? Who's going to be vaccinated at a Wiggles concert? Hardly anyone! So we're going to have to think that process through as well, not to be frivolous in any way about those people who quite legitimately can't be vaccinated, but it's early days and we are looking at all of those issues. In fact, this week I'm running six or seven industry workshops specifically so we can dive down into the specifics of what the practicalities of a whole range of different industries would look like.

ACTING CHAIR: Thank you so much. We are out of time. I'm very grateful for the time you've spent with your presentation today, Ms Osmond. Please go with the committee's thanks.

Ms Osmond : Thank you very much. Everybody take care.