Regional economy
- Australia’s tourism sector was already in trouble, but it is now set to come under even more pressure from renewed strength of the Aussie dollar. The Australian dollar rose to near 21-year highs against the Euro this morning while also lifting above US93 cents.
- The tourism deficit (excess of departures over arrivals) is at record highs and poised to go higher. Over a million more Aussies travelled overseas for holidays in the past year than foreign tourists visited our shores.
- CommSec has found that passenger numbers on seven of Australia’s top domestic tourist air routes fell by 6.2 per cent in 2009/10 and were down almost 11 per cent from the highs reached in the year to January 2009. In comparison, passenger numbers on the Sydney-Melbourne route rose 12.2 per cent in 2009/10.
- Regional Australia is particularly vulnerable to the high Aussie dollar, especially northern NSW, North Queensland, Tasmania and the Northern Territory. And apart from tourism, manufacturers and exporters will come under renewed pressure from the strong Aussie dollar.
- A high Aussie dollar depresses economic activity while at the same time capping inflationary pressures, thus reducing the scope for the Reserve Bank to lift interest rates.