While the Morrison government rails at the states to end border closures and pressures Daniel Andrews to reopen Victoria, its own international border closure is costing hundreds of thousands of jobs and tens of billions of dollars in lost export revenue.
The economic damage inflicted by Morrison’s international border closure is invariably absent from the extensive media commentary on and reporting of yet more efforts by the federal government to “ramp up” pressure and “turn up the heat” on state governments over border closures, but is far greater than limits on who can enter Western Australia or Queensland.
The biggest victim is the tourism industry, which employs around 700,000 people. With partial reopening of the economy and Australians prohibited from leaving the country, greater domestic tourism by Australians blocked from holidaying overseas will partly offset the loss of 9 million international visitors.
Consequently, disentangling the impacts of domestic tourism versus international tourism is thus difficult, but Margy Osmond of the Tourism & Transport Forum Australia recently told a Senate inquiry that international tourism normally accounted for around $4 billion a month, and that:
…at any given time there are probably about 700,000 direct jobs. According to our projections at the moment, we’re sitting at only about 230,000 employed. So the jobs are 65% down. Even at our best moment, which would conceivably be next January, after the Christmas holidays, and with a bit of a domestic boost if some of those borders open up, we’re still looking at being 40% down on the normal job load. It’s a devastating impact.
That’s around 280,000 jobs still missing while the international border remains closed (the 700,000 jobs estimate is one backed by the ABS; other tourism bodies claim up to 900,000 people work in the sector).
International tourism also generated around $22 billion in exports in 2019, according to the government’s own figures, making it the sixth largest source of Australian exports, though tourism imports have also been severely curtailed by the travel ban.
Tourism employment is often located in more economically marginal regional areas, meaning the job losses and lost revenue from visitors has a greater impact than in large urban centres.
Higher education has already lost thousands of jobs as foreign student arrivals collapse: 3000 jobs had been announced by universities at the end of July. It’s expected that 21,000 higher education jobs will be lost by year’s end, reflecting a sector that the federal government has not only refused to support, but which it has attacked with funding changes designed to deter students from choosing humanities courses requiring critical thinking.
The financial impact on the sector, according to Universities Australia, is likely to be between $3 billion and $4.8 billion this year, and $16 billion over the next four years. The sector also generated $40 billion in export revenue in calendar 2019, making it the fourth largest source of exports.
To these numbers should be added at least some of the job cuts announced by Qantas — 8500 so far — which reflect the shutdown not merely of international aviation but much of the domestic aviation industry as well. (Virgin is also shedding 3000 jobs as part of its administration process.)
These are only the direct costs of Morrison’s border shutdown. Potentially much larger are the indirect costs: to jobs created by servicing the additional demand generated by foreign students; to businesses unable to secure temporary migrant workers, to the construction sector facing a dramatic slowdown in demand for residential construction as a result of a massive cut to migration, to businesses that supply food and other services to the hospitality and tourism sector.
KPMG — a firm that works assiduously to help multinationals avoid tax, thus inflicting their own economic damage on Australia and the rest of the world — estimates that a long-term border closure would cost $117 billion over a decade in lost GDP, primarily from lower migration in the absence of a vaccine.
Apart from the travel agent sector and right-wing economists, few people are arguing for an immediate end to the international border lockdown, even to countries like New Zealand or China that have got on top of the virus.
But when it comes to state border closures, we seem to go through the looking glass, and emerge into a world where, at least according to the federal government and much of the media, the economic costs of sealed borders are horrendous and the risks of infection trivial.
Three hundred thousand Australians who’ve lost or are losing their jobs might disagree. So too might economists watching a solid chunk of $60 billion worth of exports vanish.
Should the government be talking about how much the international border closure is costing? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say column.
Scotty From Marketing’s creed :- “Politics Before Honesty.”
Nah, he doesn’t do 3word slogans – just “POLITICS!” suffices to describe SmoKo’s M.O.
Ironically the staff cuts will undermine universities’ ability to deliver STEM programs even more than the arts’ programs because of the larger amount of infrastructure and personnel required to support laboratories, workshops, clinical programs etc
Successive LNP governments who have undermined and undervalued the role of science in policy for so long now, must be having a wonderful time trying to express the value of these programs in managing a pandemic or sustaining industry now. It seems our only remaining government-subsidised export is sending Tony Abbott to work for the UK government. Perhaps Scotty could mine a whole seam of such valuable assets from his own party and put them on a plane…
That would be fun, however I will point out that Abbot, who was a useless PM, actually made a few relevant comments about the crises mentality in Victoria today. Wish he’d come back and shirt front Andrews.
Perhaps if he had applied the same, considered manner in governing Australia that he has upon his departure, his legacy might be a more cohesive and harmonious society. Nah, he nurtured the hate and division that exists in this country today. He had a long history of doing so and he was rewarded… and now he leaves with his pension-for-life, his Queen’s Birthday Honour and looking forward to assuming his new role in the “Mother Land”. Shonkseer, you and Tony are we welcome to leave at any time. Just shut the door on the way out.
Wish him all he wishes us. Perhaps if he serves his motherland well he’ll get the knighthood he so nobly gave to Prince Phil.
Just for accuracy, Morrison does not rail about state borders being closed. he rails against Labor state borders being closed.
Tasmania’s borders have been closed for months and will remain closed until Christmas, but not a peep from the slugs running this country.
It is true that Tas. is tiny, but tourism makes up a huge portion of our economy.
I am in favor of border closures, however, I am not in favor of the cheap partisan politics being shoved down our throats by the government and it’s cheer squad of the ABC, Nine and News.
I keep laughing at Nine’s strapline that no one tells them what to publish, they cannot even tell original lies anymore.
A really valid point that makes a mockery of Scomo’s politicking aimed at states and until science can grasp the impact asymptomatic carriers have and how to combat this ,opening borders would be lunacy.
Just imagine how different this scenario might be if we had a cashed up and independent of primarily science for profit CSIRO right now.
Thanks Bernard,hadn’t thought of that.
I would have though it eminently sensible that if you’re trying to put out a bushfire…. it’s probably a good idea to stop planting new trees and adding more potential fuel… at least until you had said bushfire under some level of control.
I’m glad you have so much faith in our governments ability to pat its head while rubbing its tummy, by keeping the pandemic at bay locally while bringing in throngs of visitors from virus ravaged countries.
The ruby princess and victorian hotel quarantine seem to me to indicate the governments around the country can’t even pat their head without poking themselves in the eye- let alone rub their tummy to give the economy a tiny bump.
Which brings me to point 2, the tiny bump.
You’re basing the level of economic damage being caused by the international border closure off of traveller and student numbers when there isn’t a pandemic sweeping the planet. Ie pre the dumpster fire that is 2020.
You can’t honestly think that if we threw the international border open today, we’d be met with 100% of the usual numbers of tourists and students?
How many students do you think are desperate to get here given there are no jobs for them to support themselves and they are explicitly excluded from every welfare payment possible?
How many tourists do you think are desperate to leave their home countries for a little getaway on the back of exploding global unemployment and economic carnage?
The supposed flood of wealth that scotty is supposedly holding back is most likely but a trickle in demand in september 2020.
Not every economy is trashed, not everyone is poor. While it might not be like it was, I can guarantee if the country was open, even just for foreign students, there would be people lining up to come.
Really?
Those who failed to impose appropriate restrictions on their populations not only have obscene levels of infections and deaths, but have economies which may never recover.
We, in Western Australia, have almost unlimited movement within the State’s borders.
Eventually, this State could find itself independent from the national economy – even becoming the lynchpin on which the whole country can recover a modicum of sensible trade and money movement.
Had the right-wing influences here kept the borders open and internal movement unrestricted as they demanded at the beginning of this pandemic we would be in a worse situation than even Victoria.
We would have become a pariah State.
Newsflash rolly, people probably won’t even move to WA if it’s the last virus free place on earth. Something about the mentality.
I can guarantee that too. I didn’t say there would be zero demand from students and tourists. But it would be but a fraction of usual numbers.
The increased costs involved in screening arrivals, quarantining them properly and dealing with the inevitable increase in virus cases via more contact tracing, testing and enforcing of isolation… not to mention the increased costs to the healthcare system.
Those tourists and students that do come wouldn’t spend enough to even cover the cost of them being here- let alone actually having the country make a profit of their visit.
If they arrive virus free, then they caught it off us. Not much risk of increased costs.
Not much risk of increased costs?
For starters, no travellers would be able to get travel insurance that covered a hospital stay or any other medical costs if they caught covid here.
Every insurer on the planet would now have in place covid exclusion clauses.
Of course foreigners aren’t covered by medicare, so who’s gonna pay their medical bills if/when they decide to go back home without paying for their treatment once they have recovered?
A: our hospitals and doctors.
Agreed. Where else could they go where their are 23 people in ICU. Only NZ maybe.
How many students will come if there is a risk that the program they are studying will be under-resourced or the institution put in risk of closure?
They will come in droves. Even if only because the same risks exist where they are with local courses. Zero sum game.
I know several Americans who would love to come to Australia for the next few months.
I’ll bet! They might baulk at the 10 grand economy plane ticket and a few more grand self funded 2 week quarantine upon arrival though!
They won’t have much cash to splash into our economy once that is all paid for I would expect!
Also they’d be pretty dumb for wanting to come here in the first place so we don’t necessarily want the dumb ones. Like volunteering for prison.
I’d gladly do a house swap .
For god’s sake don’t encourage the Americans. Look at the dreadful mess they’ve made of their own country.
Surely the point is that if Morrison (to the accompaniment of his media lynch mob) has settled on this excuse and is politicking and slagging the (Labor) states for closing their borders : he could at least cough up to doing the same thing, drawing similar attention to his own actions?