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15 May, 2024

Lack of budget spend will hit international visitor recovery, says Australian Tourism Industry Council

The Australian Tourism Industry Council has expressed disappointment in the 2024 Federal Budget that rejected a submission advocating for a major funding increase for Tourism Australia to recover international tourism.

“The Federal Budget 2024 has not invested in our international tourism recovery,” ATIC said in a response to Federal Treasurer Jim Chalmers decisions.

ATIC members, which include the Victorian Tourism Industry Council, NSW Tourism Industry Council (NSW Business Chamber), Queensland Tourism Industry Council, Tourism Industry Council South Australia and Tourism Industry Council Western Australia, will continue to advocate for a real funding increase to recover international tourism in the run up to the Federal Election in 2025.

The most recent March arrivals data shows that the critical international holiday-maker market was down -27 per cent YTD compared to pre-Covid. International tourists and working holiday makers are critical to small tourism businesses and regional destinations, ATIC said.

Featured image: iStock/honglouwawa

Federal Budget impacts on tourism businesses

Tourism Australia budget funding decreases from the current $173m to $170m in 2024-5.

“There is no substantial increase in future years to achieve the recovery of international visitors which remain 23 per cent below pre-Covid levels in 2019,” ATIC said in response.

But Austrade will receive $8m over four years to restart the Approved Destination Status (ADS) scheme to support Chinese group guided tours to Australia in guided groups.

“Importantly there is a commitment to $2.5mpa past the four year forward estimates to maintain the ADS scheme in the long term,” ATIC said.

But there is no funding change for Export Market Development Grants for tourism businesses, with funding forecast to decline from $158m 2024 to $110m in future years.

Eligible small businesses, including those in tourism, will receive a $325 rebate on electricity bills over 2024-25. The instant asset write-off will be extended. Small businesses with annual turnover of less than $10m will be able to immediately deduct eligible assets costing less than $20,000 until 30 June 2025.

For events and venues, the Revive Live program will provide $8.6m in 2024-25 to support Australian live music venues and festivals.

In other Budget decisions, a pre-application charge of $25 will apply for Work and Holiday 462 visa for China, Vietnam and India from 2024–25. These visas are capped and already oversubscribed.

The Government will reduce the work experience requirement for the Temporary Skill Shortage (subclass 482) visa from two years to one year for all applicants from 23 November 2024 onwards.

Infrastructure, national parks and remote airstrips

In tourism infrastructure and National Parks, the last $4m of the National Tourism Icons program, secured by ATIC in 2019, to develop major tourism attractions in each state will be finalised in 2024-5.

There will be $102m over five years from 2024/25 to extend the Remote Airstrip Upgrade Program and the Regional Airports Program for two additional rounds.

In addition, $11.4m will be set aside over four years from 2024/25 to continue delivery of priority remediation projects in the Jabiru township located within the Kakadu National Park.

The Great Barrier Reef Marine Park Authority is set to get $5m in 2024/25 to engage tourism operators to conduct reef monitoring, protection and other stewardship activities to protect the Great Barrier Reef.

The Great Barrier Reef Marine Park Authority will get $5m to engage tourism operators to conduct reef monitoring.

Revenue from Tourism

Despite the challenges, the Federal Government will increase the Passenger Movement Charge (PMC) to $70 per head from July 2024. This measure is expected to generate around $6.8 billion over the four years from 2025 to 2028, with most of it exceeding Government costs for passenger facilitation, ATIC said.

Additionally, tax revenue from tourism products (even during the COVID-affected year of 2022-23) summed to $5.7 billion. Total taxation revenue from tourist spending in Australia is expected to exceed $30 billion in the next four calendar years.

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Australian Tourism Industry Council