The people have spoken. They wanted out of the European Union. But how will the vote change the way Australians travel and trade with Britain?
By Robyn Ironside www.heraldsun.com.au
The people have spoken. They wanted out of the European Union. But how will the vote change the way Australians travel and trade with Britain?
Will Australian holiday-makers need a visa to visit the UK or the EU as a result of the Brexit vote?
IT is very early days yet but the expectation is that within the next year, Australian travellers will need to get an extra stamp in their passports when visiting the UK and the EU. Currently Australian holiday-makers don’t require a visa for entry to either the EU or the UK, and can travel relatively freely between countries after being processed at one entry point. Any changes will depend on how tightly the UK secures its borders in the wake of the decision to separate from the EU.
A Leave EU supporter wears Union flags anda Union flag hat as the results come in. Picture: AFP
Will the Brexit result have any impact on travel between the UK, Europe and Australia?
No fewer Australians are expected to travel to the UK and Europe as a result of the Brexit result. It could even trigger an increase in visitors because of exchange rate fluctuations expected to favour the Australian dollar. But on the downside, longer customs queues are expected at major airports like Heathrow because EU residents may have to be processed like Americans and other international travellers. They are currently sent through a separate line without any restrictions. Heading in the other direction, there is a risk a possible recession in Britain and the pound’s plunge could shrink the number of visitors to long-haul destinations like Australia. The UK is currently our third biggest source of overseas visitors so of great importance to the Australian economy.
Foreign currency exchanges in Australia expected to rise as Britain voted to exit the European Union. Picture: AAP
What will the Brexit result mean for airspace restrictions?
Under the Single European Sky laws, carriers based in the EU can operate freely throughout the continent. The UK’s decision to separate from the EU means airlines like British Airways, Ryanair and EasyJet will have to renegotiate their bilateral agreements with the EU to continue flying into Europe. Additional charges may even be imposed forcing up the cost of fares. Travellers could also pay more in taxes to visit and leave both the UK and the EU.
A trader checks his screens at investment bank Saxo Banque in Paris as Britain votes. Picture: AFP
How will Brexit affect trade between Australia, the UK and Europe?
There will be an impact for Australian traders with the UK economy almost certain to be hit hard by the referendum result. Prime Minister Malcolm Turnbull today acknowledged there will be a period of uncertainty and some instability but he said negotiations towards a free-trade agreement with the EU would continue. Economists are predicting an immediate fall in Britain’s AAA sovereign rating, and a likely fall into recession as a result of the British Government’s inability to fund its large current account deficit due to the pound’s decline. A recession would have a flow-on effect for Australia because the UK is our leading EU trading partner and our seventh largest two-way trading partner. In 2014-15, the UK imported $8.6 billion worth of goods from Australia, including gold, alcohol beverages, lead, pearl and gems. Australian investors in the UK may also seek to pull out if economic instability continues. At the end of 2014, total Australian investment in the UK was $304.54 billion, making the UK Australia’s second most important foreign investment destination.