With the Australian dollar recently reaching a 27-year high, not seen since the currency was freely floated in 1983, heavy costs are expected for local tourism and export industries.Cairns was hit hard by the global financial crisis due to its high reliance on international tourism, and local businesses are still struggling to recover. Early indications of a strengthening economy in the north have just started to show yet these are now overshadowed by the sky-rocketing dollar bound to deter international expenditure in the region.
Interest rate rises are being viewed as too much too soon while local property markets are still finding their feet, and of longer term concern is the slowdown in residential development. It is the hope of local business leaders that the reserve bank decides to leave interest rates at current levels or lower for the time being with political figures calling for it to be allowed to free-fall like in the time of the Keating Government after the early 1990’s recession (Courier Mail Article).
Australian Tourism Export Council director Ron Livingston said Cairns had suffered because its tourism industry was predominantly based on leisure tourism, rather than business tourism. "If you add the fact that Australia has a high wage base compared to, say, Southeast Asia, we get crucified on hotel costs and tour costs," Mr Livingston said (The Australian Article).
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