The Morrison government is designing a support package for the tourism sector that might include consumer incentives to take holidays in some Australian regions to offset the loss of revenue from international visitors. In an interview with Guardian Australia’s politics podcast, the tourism minister, Simon Birmingham, said the sector was a special case because it was hit first by the catastrophic summer bushfires and then by the public health measures invoked to flatten the curve of Covid-19 infections. He said the government’s objective in developing the assistance package was crafting stimulus measures to offset the revenue loss from overseas visitors given the international border was likely to remain closed for some time. Birmingham noted that Australians spent $65bn on overseas holidays last year, and international visitors spent $45bn in Australia. He said if Australians spent two-thirds of what they spent going overseas on domestic travel “you would have the same level of expenditure happening in Australian businesses”. “Now whether we can actually get people to do that, whether it is in the right places and the right regions and the same business is part of the challenge, and what we are working through right now.” The north Queensland MP Warren Entsch, whose electorate relies on tourism, has called for the jobkeeper wage subsidy to be extended beyond September. He says it is unlikely the sector will recover before next March. While arguing tourism was a special case, Birmingham suggested if jobkeeper were to be extended in the sector, it would not be in its current form. There is concern in the government that the wage subsidy creates an incentive for businesses to suppress their turnover in order to qualify for the payment, which goes to the balance sheet of the business, and for employees to decline shifts. Birmingham said income support for the next phase of the crisis needed to provide an incentive for people to return to work and “any future support is going to have to be more targeted, more proportionate and more carefully structured”. The looming assistance packages for sectors such as entertainment and tourism, and the unwinding of the fiscal support offered to Australians during the pandemic, were discussed by cabinet and the expenditure review committee this week, but the government is yet to reach a decision. The prime minister told reporters on Thursday he was not going to be rushed into any decisions, but he gave a broad hint workers were more likely to be given income support through a welfare payment than a wages subsidy once the transition was executed. Birmingham said the best way to drive economic recovery in the tourism sector was to try and normalise trading conditions and that was becoming more possible with the reopening of state borders. He said some tourism businesses would not survive the shock of the pandemic and the government should not be in the business of propping up unviable businesses. Birmingham also holds the trade portfolio, and this week opened negotiations on a free trade agreement with the United Kingdom. Australia is also pursuing a trade deal with the European Union. Europe has flagged it will use the free trade agreement to cement Australia’s support for emissions reduction targets agreed to under the Paris accord. The EU has flagged it wants the “respect and full implementation of the Paris agreement” underscored in the text of the agreement. The UK is also a pace-setter in global climate talks. The energy minister, Angus Taylor, contends signatories to the Paris agreement, including Australia, agreed to hit net zero “in the second half of the century”. But scientists say that signatories will need to hit net zero by 2050 to meet the central Paris goal of keeping global temperatures rises to below 2C above pre-industrial levels, and to pursue efforts to limit the temperature increase even further to 1.5C – a commitment Australia adopted in 2015. Taylor says it is not Australia’s policy to achieve net zero emissions by 2050, despite signing up to the Paris agreement, because the Morrison government will not adopt a mid-century target in advance of a plan to achieve it. Asked whether climate was likely to become a flashpoint in the trade talks, Birmingham said that wasn’t his expectation. “In both cases I would expect that we will make some commitments around environmental measures, and in the main, those commitments will be restating existing commitments that Australia has made as part of other international obligations,” he said. “I don’t see this as an obstacle at this time.” Birmingham said there might be shared technology opportunities to explore in newer fuel sources like hydrogen. He said Australia did not as a matter of principle settle domestic policy through trade agreements. “We will talk about [our international climate commitments] and if there are areas that align with trade policy that we can reach agreement on … we do so, and sometimes that involves restating commitments that we’ve given in other international instruments to acknowledge that we are equally committed to those other instruments, but it is not the case that we suddenly sit down and start negotiating the Paris accord as part of the Australia/EU free trade agreement.”