The Cairns economy is expected to take a $1 billion hit this year with nine out of 10 business impacted as a result of the coronavirus pandemic.
A detailed report* tabled at Council today outlined the impacts of COVID-19 on the Cairns economy.
Cairns Mayor Bob Manning said the report revealed the extent of the downturn and the need for government assistance to stimulate the recovery.
“We were fortunate that our economy was in such a strong position immediately prior to this crisis,” Cr Manning said.
“Our economic growth over the past three years was 3.5 per cent (above the State and National average of 2.2 per cent), and the unemployment rate was 4.3 per cent, well below the Queensland rate of 6 per cent.
“As a community we have been tested before, by the pilot strike, the Global Financial Crisis (GFC) and natural disasters like cyclones.
“We just need some government assistance and we will do what we have done time and again, we will bounce back stronger than before.”
Cr Manning said the tourism industry had been decimated.
“Domestic passenger numbers were down by 323,000 people (or 96 per cent) in April, there were virtually no international visitors (down 99.9 per cent) and occupancy levels in the city’s 10,400 hotel rooms were at 10 per cent, the lowest ever recorded,” he said.
A local business survey revealed nine out of 10 Cairns businesses have been adversely affected, with more than half (52 per cent) reporting a 50 per cent fall in sales and 49 per cent expecting to reduce staffing levels.
The unemployment rate is expected to increase to over 12 per cent. The report estimates more than 13,000 jobs in Cairns will be affected, with 7,700 (9.4 per cent) people losing their job and a further 5,700 (6.9 per cent) supported by Jobkeeper payments.
Cairns’ Gross Regional Product (GRP) in the June quarter is expected to be $386 million (16 per cent) lower than the average quarter experienced in 2018/19.
“This is significantly higher than the average falls in GRP in Queensland (12 per cent) and Australia (12.4 per cent) and highlights that Cairns is quite different from the rest of the country,” Cr Manning said.
According to the report, Cairns will be the second most impacted regional city in Australia for the June quarter, only behind the Gold Coast, in terms of unemployment and GRP losses.
“However, one can expect the Gold Coast will bounce back quicker than us as they tap into metropolitan centres that are just a drive away,” Cr Manning said.
“Our economy usually services almost 200,000 people – about 167,000 residents and more than 31,000 visitors – with the collapse of tourism those visitors are no longer here and people have lost their jobs as a consequence, which is why the impact is so severe.
“We are heavily reliant on aviation. The reestablishment of domestic flights into Cairns is vital to our recovery.
“We know that our product is good. We need to get the planes back, ensure there is strong investment in destination marketing for our region, and get our visitor numbers back to pre-coronavirus levels.”
Cr Manning said using the 2008 GFC as a guide; Cairns will likely take longer than most other places in Australia to recover, largely because of its distance from a metropolitan centre.
It took eight years for international visitation levels to return to pre-GFC numbers, and it took 12 years for the employment rate to return to the state average.
The report detailed the need for continued State and Federal support packages, such as JobKeeper and major project funding.
The report can be found at: https://www.cairns.qld.gov.au/council/covid19/recovery
*The report referenced information from multiple sources including Australian Bureau of Statistics, National Institute of Economics and Industry Research, Cairns Airport, Tourism Research Australia, Ports North, Tourism Tropical North Queensland and Department of Education Skills & Employment.
