“Travel tax” $1b forecast riles industry all over again

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The controversial Passenger Movement Charge is causing an outcry in the tourism industry once again with the Federal Government to reap more than $1 billion through the “holiday tax” for the first time in the next financial year.

The $55 tax, which affects Australians traveling overseas to popular destinations like Bali and New Zealand and international visitors coming to our shores, was introduced in 1995 to cover the cost of border and security facilitation.

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TTF CEO Margy Osmond

A hike to the tax in 2012 sparked outcry throughout the industry prompting calls for it to be scrapped.

Now, this $1 billion forecast has renewed calls for the tax to be removed with the Tourism and Transport Forum (TTF) branding it a blatant “cash grab”.

“The $55 Passenger Movement Charge has now morphed into a $1 billion holiday tax on Australians and international visitors leaving the country that grossly outstrips the $247 million cost of processing passengers at the border,” TTF chief executive Margy Osmond said.

Osmond highlighted the 9.4 million Australians that headed overseas in the last year who would have been impacted by the charge.

“If you purchase a $300 one-way ticket from Sydney to Bali, $55 of that is now going to the Federal Government through its holiday tax,” she said.

“A lot of travellers would be questioning what they are getting for their hard earned money.”

And for the 7.4 million annual international visitors arriving into the country, the charge is a disincentive to choose Australia over its plethora of competitors, she continued.

“We should be growing our international visitations by cutting the cost of travel not increasing it,” Osmond said.

“We had over one million Chinese visitors spending $7.7 billion in the past 12 months – that is not something we should be jeopardising with holiday taxes.”

She called on the government to use the upcoming federal budget to confirm a freeze on any increase in the holiday tax and, furthermore, to outline its plan to reduce the cost of this tax on travellers.

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AFTA CEO Jayson Westbury

The Australian Federation of Travel Agents (AFTA) also weighed in on the debate, with chief executive Jayson Westbury describing PMC as “one of the worst over-collected taxation measures” ever put in place by the Federal Government and warning that the discrepancy will only increase with the forecast growth of outbound travel.

“Given the massive over-collection, Australians should be able to expect the world’s best experience on departing and arriving at international airports as they are processed by the government agencies and I am not sure any survey would come up with that result,” he told Travel Weekly.

“AFTA and our fellow travel and tourism industry associations are calling on the Federal Government to at least freeze the PMC at the current $55 in this year’s budget and for the next three years, but frankly believe that they should decrease the PMC to a level that is consistent with the actual cost of passenger movement – or change its name to the “Travel Tax” which is what it clearly has become”.

In a recent conversation with Travel Weekly, minister for tourism senator Richard Colbeck said the government is talking “pretty actively” to industry and the airports about some of the practical things that can be done to improve the visitor experience.

He highlighted PMC as still “on the agenda” as industry continues to voice its concerns over the levy.

“It’s certainly something we’re talking about, with the industry making very clear its view,” Colbeck confirmed.

Main image credit: iStock

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

afta agents holiday tax jayson westbury margy osmond pmc richard colbeck tourism ttf