Coalition keeps PMC pledge amid calls for review
The Coalition has confirmed its pre-election pledge not to increase Australia’s departure tax in the first full term of the current parliament.
Trade and Investment minister Andrew Robb, who is responsible for tourism, made the commitment today at a meeting of the country’s tourism ministers in Canberra.
He said freezing the $55 Passenger Movement Charge would make Australia more competitive and claimed it demonstrates the Coalition’s support of the tourism industry.
But while the move was welcomed by the Tourism and Transport Forum (TTF), it called for a review of the tax, arguing it should be reduced or removed altogether, not simply frozen.
Under Labor, the PMC soared 45% following two increases which “undermined” the sector, Robb said. The most recent increase under Julia Gillard saw the tax rise $8.
“The previous government saw the PMC and increases to tourism visa charges as an easy way to raise revenue with no consideration to its undermining effect on the competitiveness of our tourism sector,” Robb said.
“On top of this, Labor’s carbon tax reduced profitability and pushed up the cost of airfares. These tax burdens have made it more expensive to come to Australia and made international competitors comparatively cheaper.”
Freezing the PMC and scrapping the carbon tax is a “clear signal that this Australian Government greatly values the tourism industry”, he said.
Robb insisted that tourism is a “critical component” of his focus to increase export income, attract international investment and create more jobs.
The freezing of the PMC will not affect the Asia Marketing Fund or Tourism Industry Regional Development Fund.
The TTF described it as a "welcome commitment" but said a review of the tax was still needed.
"Originally intended to cover the cost of passenger processing, the PMC will net the government $890 million this financial year, while expenditure on passenger facilitation at international airports will be only $233 million," TTF chief executive Ken Morrison said.
"We believe a review will confirm it has a net negative impact on the Australian economy and that reducing it or removing it would deliver a significant boost to visitation and spending in the visitor economy."
While the World Economic Forum's Travel and Tourism Competitiveness Report ranks Australia 11th overall, it ranks us 137th when it comes to competing with rivals on price, Morrison added.
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