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Weary and wary: Businesses welcome newfound freedom but warn of cliff ahead

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Business has cheered the reopening of borders but warn of a “September cliff”’ when JobKeeper subsidies end and the zombie companies it props up will fail.

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After Premier Annastacia Palaszczuk on Tuesday announced easing of intrastate business restrictions, and changes to the border controls, the business sector appeared happy with any prospect of stimulus.

However, the Chamber of Commerce and Industry Queensland said there was a threat of a second round of closures when the payroll tax freeze and the JobKeeper stimulus ends.

It was supported by Adept Economics’ Gene Tunny who said it was early days in the recovery from the virus recession and there was always the possibility it could stall and the economy settled into an extended slump.

“It’s obvious the Federal Government will need to extend the stimulus in some way, such as via a more targeted JobKeeper and bumping up the standard rate of JobSeeker,” Tunny said.

“This is because the drop in Government support to the economy at the end of September will be huge and may lead to any recovery stalling in December quarter when we will likely see many of the so-called zombie firms shutting up for good.

With the possibility international travel won’t be back to normal until 2022, our economy, to which international tourism and international education made substantial contributions, certainly won’t be able to regain any semblance of normality for a while yet.”

Suncorp chief executive Steve Johnston was more positive, saying he did not have the negative assessment of the Queensland economy that a lot of people had.

“We should see a material increase in house prices and the economy will do well out of the domestic tourism resurgence,” Johnston said.

“With the borders open, to some extent, there’s good opportunities for the Queensland economy to pick up strongly over the next three months.”

CCIQ general manager of advocacy and policy Amanda Rohan said the reopening of the borders would allow businesses to begin to get back up and running, but it was not a magic bullet.

“State and federal governments need to be implementing further measures which include wage subsidies for apprentice and traineeships; support for reducing ongoing operating costs support such as electricity, rent and waste; and ongoing relief for permits and fees charges,” Rohan said.

She said the reopening of the borders was good news but businesses had been incurring big costs during the lockdown.

“Businesses have been incurring operational expenses during a time when there has been no money coming in, and there’s a long road to get them back on track,” she said.

The Queensland Tourism Industry Council (QTIC) responded with relief to the Premier’s announcement today about the State 3 easing of restrictions, specifically about the border opening.

“The Queensland Government has achieved a great result in controlling infection rates in Queensland and despite the unfortunate community transmissions in Victoria, the medical advice supports the announced staged return to some normality,” QTIC chief executive Daniel Gschwind said.

The QTIC applauded the State Government’s handling of the COVID-19 crisis, saying interstate tourism was worth $9.2 billion to the Queensland economy last year and employed about 240,000 people.

“This announcement by the Premier will bring back a new ray of hope to all those people and their families,” Gschwind said.

“We are confident as an industry that operators will provide a safe travel experience.”

He said larger hospitality venues would have no limits on numbers providing the one person per four-square-metre capacity rule was followed. For smaller businesses the four-square-metre rule would be relaxed, allowing up to 50 customers for a venue below 200 square metres in size, provided they keep a register of customers.

He said the tourism industry could take another step in its long road to recovery.

“The tourism industry has now been given the opportunity to tap into the interstate winter season and support Queensland in rebuilding its future,” Gschwind said.

“With all of Queensland’s destinations accessible again, we hope bookings will stream in, allowing tourism operators to get their businesses going again.”

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