Mike's Minute: So the borders are closed for 2021, now what?

Author
Mike Hosking,
Publish Date
Thu, 28 Jan 2021, 9:30AM

Mike's Minute: So the borders are closed for 2021, now what?

Author
Mike Hosking,
Publish Date
Thu, 28 Jan 2021, 9:30AM

A headline with no follow up questions, and certainly no answers.

Isn't that what we got this week with the announcement that the borders will be closed for the year?

It follows Brendan Murphy's assessment in Australia last week he doesn’t think they're going anywhere this year either.

So, the Chief Australian Medical Officer and our Prime Minister have decreed travel is off. This is a shame because it yet again shows a lack of willingness to keep trying, to keep pushing, and to keep exploring possibilities.

But, more importantly, the questions that didn’t come were, if the border is closed what happens to the hotels and the businesses that support international travel? What happens to the travel agents? The airlines?

And given the questions weren't asked, there certainly weren't any answers.

It has been shown here after pretty much a full year of tourism devastation that there is a gap of somewhere between $4 and $6 billion between the domestic boost we have given the industry, and the sort of money that flows when Americans and the Chinese roll into town.

There was a mismanaged fund for companies last year in which some got millions, others got nothing despite them seemingly doing pretty much the same thing. There was the wage support. And Air New Zealand got to tap into a mafiaesque type loan facility that runs at a rate of nine percent.

As we know, thank god, the better part of the economy has bounced back. Jobs are recovering slowly, spending is solid although not well spread.

The QE programme is working. Money is cheap, there is less pessimism around business, hiring, and investing.

But, one of the key components of our economy, tourism is as troubled now as it was last year. In fact, it might be a bit worse given last year no one had a clue. Whereas now, we do. You can write the year off.

So, what to do? Where's the help? What sort of help is it?

Can you honestly expect our national airline to borrow $900 million at nine percent? And then what? Does the government take a bigger stake?

How much of the tourism industry do you mothball? Given the original thinking was we need to support it for the bounce-back. Is that still the thinking? Or has it changed? Is there a bounce back? Do really hard calls need to be made to say, some businesses aren't coming back, and the tap needs to be turned off? Where do the banks and their lending facilities fit into this?

Where, once again we ask, is the plan?

 

Telling us borders are closed is easy, the follow up is the bit we, yet again, are waiting for.