By: Joe Cusmano @straynomad.com
The Federal Government has indicated that the current ban on international travel out of Australia will be lifted from 01 Jan 2021, but numbers will still remain at low levels until 30 Jun next year, according to a budget update made last Thursday by Treasurer Josh Frydenberg.
The formal July 2020 Economic and Fiscal Update includes a range of key assumptions, including that between Jul and Dec 2020, only citizens, permanent residents, New Zealanders, and a small number of international students are assumed to be able to travel to Australia, based on announced policy to date.
However, the situation is forecast to change from the start of 2021, with the papers indicating that “from 01 Jan to 30 Jun 2021, it is assumed that the travel ban is lifted, but that a two week quarantine period is required of arrivals to Australia”. This would lead to the resumption of arrivals by temporary and permanent migrants, the update noted, but at lower levels overall than normal.
Although the budget papers confirm dramatic falls in the number of Australians travelling overseas since the beginning of the year, “it is likely that a share of the spending usually undertaken overseas will be redirected to consumption, including domestic travel”.
Other assumptions in the papers include expectations that the Victorian border with NSW and South Australia will be closed until 19 Aug, while “international travel is assumed to remain at low levels until the end of the Jun quarter 2021”. “Spending on travel should also improve as interstate border restrictions are expected to be gradually relaxed, although international travel will remain subdued for some time.
Considering some known facts, I personally think that these assumptions are somewhat correct although the situation is so volatile that it could change by the day. The following main facts need to be taken into considerations:
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There is no vaccine and it has been indicated that the earliest it can be made available will be by the end of 2021, however, it will take a long time until Australians can be vaccinated and travel thereafter.
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There are no indications as to when the 14 days quarantine will be lifted. This is of paramount importance as travellers will have to cover the cost of quarantine when they return “for a family of 4 that will be $6000”.
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Qantas has suspended its international operation until June 2021 and planning to start resuming services in July 2021, which means that most likely until June the international travel market will remain depressed and pending on the other impeding factors that tend to change by the day, a resumption is planned from July which means that it will take at least 6 more months if things remain under control for the international travel market to show some rebound.
I personally remain optimistic and hope that international travel will start coming back earlier at least with the planned travel corridors and without the 14 days quarantine when we arrive back in Australia.
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