Northern Territory border closures extended for a further period of 18 months

August 26, 2020
Editor(s): Emily Hartley
Writer(s): Melanie Suriarachchi, Yash Shewandas, Vickram Mehtaanii

As the Northern Territory’s election approached, Mr. Michael Gunner, the Chief Minister of Northern Territory, declared that their border would remain closed for at least 18 months, onwards from August 11, 2020 (Brown, 2020). This travel ban to the Northern Territory would be indefinite for Victoria as well as, potentially, Greater Sydney. The measure was classified as “conservative” by Mr. Gunner, who went on to hint that more places were likely to be added to the banned list. While the decision to close borders for such a long period has faced criticism, Mr. Gunner has also been accused of taking advantage of the ongoing crisis to retain government. Regardless, such a huge step will surely have a massive impacts on the overall economy, as well as the residents of the country, some of which are explored within this piece. 

The validity of the decision to close borders and hindering effects on other states

Taking such a major political step is bound to divide opinions, with it being common for individuals to point fingers when they, themselves, do not have to be mindful of, or control, an entire territory. While it may be extremely challenging to accept that one cannot re-enter the Northern Territory if they cross the border for Christmas and other celebrations, it is critically important to understand that there is a public health emergency, a deadly virus that has already killed almost 500 Australians (Australian Government Department of Health, 2020), as depicted in the below table derived from Google. Sadly, this number has been increasing at a higher rate than ever before and does not seem likely to change in the near future (Groch & Lewis, 2020). Therefore, it is very crucial to appreciate that this decision has been taken, given it takes into account the long-term welfare of Australian people. This means that people would be able to cross borders freely for the rest of their lives should they play their part in eliminating the virus by adhering to this new change. Conversely, disobeying this ruling would result in the pandemic remaining in place for a much longer time than 18 months, consequently killing thousands of people (Precel, Ward & Levy, 2020).

Source: Wikipedia via Google

However, while it is suggested that the Northern Territory border closure is a positive step towards the fight against Covid-19, it certainly affects people to varying extents. Some may not be able to meet their family, while some may not be able to work towards the smooth functioning of their business. Thus, it could be a worrying sign for many others if other states followed suit. It is believed that other states will implement a similar border closure if the Michael Gunner government wins the Northern Territory elections, whereas the opposite will be expected if they fail to retain the government (Clennell, 2020). All eyes were on the results of the Northern Territory elections on August 22, as shown below, especially with the Queensland elections taking place subsequently at the end of the month, on August 31. These elections have never been as important, with the outcomes deciding the future of other states. 

Source: Wikipedia

Welfare of Territorians

Northern Territory’s (NT) debt is set to hit $8.2 billion this financial year (Zwartz, 2020) and it is rather unsurprising to fathom why Territorians are in distress. Although the 18-month timeframe serves as a “conservative estimate”, according to Chief Minister Michael Gunner, Territorians are being warned that they should cancel their Christmas plans. This is just a small insight into how much of a toll has been taken on individuals. Perhaps the pandemic has been the world’s biggest psychological experiment and has foiled the plans of many, as evident in the Marshall family. Their daughter, who is currently studying at the University of Canterbury in New Zealand, will be unable to return back home to NT. The reality is, it is separating families and has caused heightened states of anxiety, panic and depression. Nonetheless, it’s important to acknowledge there are others who are in situations ten times worse, however, the matter of fact being that the extended border closure is close to a ‘breaking point’ to some.

On the other hand,  a concerned tourism operator claims that Northern Territory’s borders should remain closed because having them open is putting lives at risk, as earlier touched upon. With a soaring 7.5% unemployment rate (Australian Bureau of Statistics, 2020), there have been generous benefits given to provide Territorians ongoing financial and wellbeing assistance support, crisis accommodation and peer support. However, in Peppimenarti, the welfare payments have been misappropriated and expended onto alcohol. Local politicians and health groups say they are seeing this issue across the Northern Territory and this will continue to persist should the border remain closed for 18 months. A controversial decision like this has, thus, left NT in turmoil, with indications that this may have detrimental effects (both economic and political) on the state and country as a whole. 

Impacts on the Tourism Industry within the Northern Territory

Each year, the Northern Territory attracts masses of tourists from both international and domestic populations eyeing to catch a glimpse of the wonders of Kakadu National Park or witnessing the marvel that is Uluru. Given this, it is no doubt that the tourism industry is an important economic driver that aids the functioning of NT year-round. In the 2018-19 financial year alone, tourism contributed approximately $1.2 billion to the Northern Territory’s gross state product, equating to roughly 4.2%. In addition to the revenue that the industry earns, the tourism sector plays a major role in the employment of many Territorians, directly employing about 8400 individuals in the 2018-19 financial year with the addition of indirect employment which accounted for approximately 7600 people. With the emergence of Covid-19 earlier this year, the tourism sector saw drastic changes with international visitors from the top five international markets; United States of America, Japan, United Kingdom, Germany and China* all plummeting. From this, the decrease in visitors from China represented the largest drop, with tourism from the associated countries decreasing by 28% in the year ending March. While holiday visits were decreasing (by approximately 8.2%), visits with the purpose of visiting family and friends, as well as business related visits, increased by 16% and 33% respectively. The claims of Northern Territory Chief Minister Michael Gunner of the likelihood that the Northern Territorian borders would potentially be closed for the next 18 months due to the rise of Covid-19 cases in Metropolitan Melbourne as well as Metropolitan Sydney will be a cause to alarm for tourism operators as well as those employed within the sector. With a decrease in visitors in both the top end and central Northern Territory within the March Qtr. 2020 (15% and 29% respectively), it begs the question, with decreased revenue from the lack of international visitors, will the Northern Territory survive 18 months with a loss of revenue from not only the international market but also the domestic market? Both of these markets inevitably contribute not only to the tourism industry but also to the retail and agriculture industries. Thus, it is highly likely that significant detriment may arise. 

Kakuda National Park
Source: Wikipedia

*China includes Mainland China, Hong Kong and Taiwan.


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The CAINZ Digest is published by CAINZ, a student society affiliated with the Faculty of Business at the University of Melbourne. Opinions published are not necessarily those of the publishers, printers or editors. CAINZ and the University of Melbourne do not accept any responsibility for the accuracy of information contained in the publication.

Meet our authors:

Emily Hartley

Hi everyone! My name is Emily and I am a current penultimate year student studying Bachelor of Commerce with majors in Finance and Economics. As a digest writer at CAINZ, I am able to tie together my childhood passion for writing and the qualitative and quantitative aspects of finance and economics. I am excited to deliver to you a range of articles throughout my time as a writer.

Melanie Suriarachchi
Yash Shewandas

Yash is a first year Bachelor of Commerce student, intending to major in Economics and Finance. His interests include macroeconomic variables and policies, global inequality, and trade globalisation. Outside of uni, Yash loves exploring different cuisines, playing football (soccer), and is a hardcore Liverpool fan.

Vickram Mehtaanii