CLIA view: taxing cruise is not the answer

JOEL Katz, Managing Director CLIA Australasia

Taxing cruise is not the answer

There’s no question Australia’s biosecurity is vitally important to protect our agricultural sector and our unique natural environment. And like other parts of the travel industry, the cruise sector has long worked to make sure we meet Australia’s highest standards when it comes to preventing the introduction of diseases and pests.

But a proposal to hit cruise lines with a new biosecurity levy has caused concerns that our industry is again being slugged with another back-door tax on tourism. It threatens to place an unfair burden on our industry and drive up costs for both operators and passengers.

Announced by the Federal Government in last year’s Budget, the Australian Biosecurity Imports Levy was originally aimed at freight. It was supposed to apply to containerised and non-containerised cargo, but somehow cruise ships have been brought into the picture and might be hit with the same tax as soon as July.

The Department of Agriculture and Water Resources has indicated the levy will raise up to $120 million a year and could be applied to cruise ships upon each arrival into Australia on a gross tonnage basis. Given the frequency with which cruise ships visit and the increasing tonnage of vessels, it’s clear this formula could have a disproportionate impact on our sector.

The costs for cruise lines operating in Australia are already among the highest globally. Travellers are taxed heavily too, through measures like the $60 Passenger Movement Charge which is one of the highest tourism taxes in the world. Costs like these are largely carried by cruise operators and collectively factored into fares, which creates a cumulative disincentive to consumers.

As we all know, cruise itineraries and fares are developed and sold several years in advance, which means the short-notice imposition of a new levy is difficult to pass on to customers and would therefore be borne by operators.

The cruise industry is already an active collaborator on biosecurity measures and has worked with agencies across the world to develop standards and practices. Cruise lines comply with, or exceed, all Australian and international biosecurity requirements, and the industry and its passengers already contribute to the cost of enforcement through measures like the Passenger Movement Charge. With this in mind, it’s difficult to see any justification for extending the biosecurity levy to cruising.

CLIA has written to the Minister for Agriculture and Water Resources, David Littleproud, asking him to rule out any additional levy on cruising, and has sought the support of the Minister for Trade, Tourism and Investment, Simon Birmingham.

Any new tax placed on cruising will further disadvantage our industry at a time when it is facing significant infrastructure constraints and high operating costs. Taxing cruising simply isn’t in Australia’s interests.

 

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