Australia’s Federal Budget for 2022-2023, delivered by Treasurer Josh Frydenberg on Tuesday, offers little targeted support for businesses in the accommodation and travel sector, but investment in trainee programs and efforts to reduce the cost of living for Australians give some hope.

“The budget will help the economy, people and households and is a good step forward,” Accor Pacific CEO, Sarah Derry, told HM.

“We urge the Government to do more for our cities to help return them to prosperity and to support the skills shortage.”

Tourism Accommodation Australia (TAA) Chief Executive Michael Johnson was optimistic about the flow-on effect that this year’s budget could have on the industry but shared his frustrations about areas that have been ignored.  

“We were hopeful that we would see a reduction in the beer excise — we haven’t seen that which is disappointing,” Johnson told HM.

“We were also hopeful of some support with FBT in food beverage and accommodation and that hasn’t gone through either. From that perspective, it’s been a little frustrating.”

International workers

The budget has allowed for an additional 11,000 Working Holiday Maker visas — good news for the accommodation industry, which has been crippled by a labour shortage as a result of border closures.

Accommodation Association of Australia (AAoA) President, Leanne Harwood, welcomed the move.

“Our sector more than most is struggling with the loss of skills and people across all levels,” Harwood said.

“While the Accommodation Association continues to invest in developing our own strategies to attract, retrain and retain people, we applaud the increase of country caps for work and holiday visas by 11,000 places. Working holiday makers make up an important part of our workforce, filling 250,000 jobs prior to the impact of COVID.”

Both the AAoA and TAA agreed, however, that it was disappointed that the Working Holiday Maker visa rebate scheme, which is due to end on April 19, will not be extended.

“[TAA has been] asking for an extension of the incentives for Working Holiday Makers and international students put in place this year to make Australia a more attractive destination,” Johnson said.

“We’re still working with government on that and hopefully we will have some success.”

Hilton APAC Area Vice President and Head of Australasia, Paul Hutton, echoed the need for more action from government on labour shortages.

“Our team members are at the core of all that we do, and the availability of labour is the single biggest challenge for our industry right now,” Hutton said.

“The industry as a whole has been impacted by the pandemic and retaining and re-hiring strong talent is absolutely critical to our recovery.

“Although the relaxation of working visa laws is welcome, we need to see investment in our industry and encourage the Australian Federal Government to do everything they can to expedite visas for hospitality professionals, international students and backpackers.”

The low number of international workers in the country has driven the rate of unemployment down to 4.4%, and it’s likely to drop even further in the coming months.

Skills boost

In an effort to address the nation’s skills shortage, the budget included $365.3 million for the creation of an extra 35,000 apprentices and trainees — an extension of the Boosting Apprenticeship Commencement wage subsidy.

Johnson said this will be critical in surviving the labour crisis.

“I think the increased focus on skills [in this budget] will assist us. There’s a lot of indirect assistance that will flow through to industry,” he said.

Frydenberg also announced $1.6 billion in tax relief to support businesses with annual turnover of less than $50 million to go digital and upskill their employees.

“[AAoA is] currently working our way through the detail of various small business incentives, including the ability to instantly write-off assets which is in place until 30 June 2023 along with the opportunity for business with annual turnover of less than $50 million to benefit from a range of initiatives under the Digital and Skills Tax Boost package,” Harwood said.

The budget’s $146.5 million allocated for tourism includes the previously announced $75.5 million for travel agents and tour providers and $60 million for marketing to bring back international tourists, while $6.8 million will go towards the government’s Thrive 2030 strategy, which launched on Friday.

Johnson pointed to additional funds for Tourism Australia as a major win.

“That is critical and something that was in our pre-budget requests,” he said. “They need that additional funding in such a competitive international arena. That’s certainly been positive.”

Harwood welcomed these tourism initiatives saying they will “help Australia stand out”.

“The challenges our hotels, motels and accommodation providers face are not disappearing any time soon, and the sooner we see tourism normalise, the better,” she said.