AFTA View – July 2011

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Jason WestburyClearly, the proposed carbon tax is not a good thing for our industry

By Jay Westbury, chief executive Australian Federation
of Travel Agents

THIS month has been the month of carbon tax, but let’s not forget that there are number of other things that have kicked in.

Employee tax rates have changed and now include the flood levy to help fund the recovery from the floods in Queensland and other parts of the country and indeed a cyclone.

Meanwhile, some people get more, some get less in their pay packets, it depends on your rate. And the carbon tax debate continues. Clearly the carbon tax as it is being proposed is not a good thing for the travel and tourism industry.

There is no, absolutely no compensation proposed for tourism businesses in the carbon tax policy that has been released. No compensation for those tourism businesses in Australia who are competing with other tourism businesses on a global scale in other countries that do not have a carbon tax. Simply put; that’s just not fair.

The domestic tourism industry is grappling with the exchange rate, currently not sure how long that will run but more than likely our dollar will stay above $US1 for the foreseeable future and well into next year.

The carbon tax is to commence in July next year and up goes the cost of everything. Up goes the cost of domestic tourism.

Meanwhile the carbon tax will only apply to domestic air travel, as the government cannot apply it to international travel (as the carbon is not emitted in our economy).

Therefore outbound air travel – no carbon tax; domestic air travel – carbon tax. Some would say not fair and already a debate is raging around the prospect that more Australians will travel overseas as a result of the carbon tax.

Those in the outbound travel industry may have a quiet hooray, but there is a sting in the tail.

At the end of the day you will have to pay the carbon tax in your business. No matter what you do – turn on your lights, start up your computer, have a cup of coffee – you will be paying in your office and in your home.

If some in the travel industry think they have dodged a bullet, I am here to tell you that is not the case. Everyone gets caught in this tax.

What’s the solution? Not sure. It seems unfair that this tax can be introduced by a minority government that went to the polls saying there will be no carbon tax.

This new tax is not and cannot be a good thing for this country, when you think about all of the issues we have faced over the past couple of years – the GFC, the natural disasters, ash plumes just to name a few. It just does not seem logical that now is the time to do this.

The most recent reports released on consumer confidence have it tanking. People are scared, when people are scared consumer confidence drops and when confidence drops people stop travelling.

Forget how good the exchange rate is. If people aren’t confident they will have a job and the economy strong they don’t travel and they don’t spend. We are in for a rocky ride over the next 12 months.

Jay Westbury’s AFTA View column appears monthly.

 

   

 

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