‘Halve the departure tax for Kiwis’ call

Issues & Trends – October 2012

‘Halve the departure tax for Kiwis’ call

PRELIMINARY recommendations by the productivity commissions of Australia and New Zealand have added fresh impetus to a tourism industry push for reform of Australia’s Passenger Movement Charge (departure tax).

The Tourism and Transport Forum’s chief executive John Lee said the productivity commissions’ proposed reconfiguration of the PMC as a genuine user charge is “a common sense approach”.
This comes as latest figures suggest the hike in the PMC has hit arrivals from New Zealand.

And a Senate Estimates hearing has questioned the use of a Tourism Research Australia (TRA) report that played down the likelihood of an increased departure tax adversely impacting on arrivals.

The TRA report had gathered dust for about a year before being released in March in the lead-up to the Federal Budget.

Indeed its release came just two weeks after Tourism Minister Martin Ferguson gave assurances to tourism industry leaders that the PMC would not be increased in the Federal Budget. Presumably it played its part in Ferguson being rolled in Cabinet.

Whatever the TRA report predicted, the facts are that New Zealand arrivals have declined for two consecutive months since the PMC increased.

“This is not a coincidence. It is the only possible outcome from a short-sighted decision to levy the same hefty arrival tax on our closest neighbour as we do on long haul travel,” claimed Tourism Accommodation Australia chief executive Rodger Powell.

The TTF’s Lee has renewed calls for a productivity commission review of the PMC.

“Now the PMC has been acknow-ledged by the productivity commissions on both sides of the Tasman as an inequitable barrier to travel between the two countries, we are calling on the Australian Productivity Commission to conduct a full review of the charge,” he said. “The PMC is a tax on tourism which places a disproportionate burden on visitors to Australia from short-haul
destinations like New Zealand, our number one source market for inter-national visitors.

“We have made repeated calls for the PMC to be halved for visitors from New Zealand as an acknowledgment of the relationship between the two countries and of its high cost relative to trans-Tasman airfares.

“We warned that raising the PMC would add to factors which are reducing Australia’s competitiveness as a destination and lead to a fall in arrivals from New Zealand.

“The PMC went up to $55 from July 1, and arrivals from New Zealand fell 4.5 per cent that month, followed by a 2.4 per cent fall in August.

“Reducing the inequity for short-haul visitors will have a positive impact on international visitation to Australia, including from Asian countries Australia is targeting for inbound tourism growth over the coming years.

“While it was initially introduced as a means to cover the cost of passenger facilitation at Australia’s airports, the PMC has become a significant revenue source for the government which will over-collect by $560 million this financial year.”

• High-cost destinations can’t afford tax-related price hikes



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