Federal budget bites into travel

THE Australian Federation of Travel Agents (AFTA) has condemned the Government’s decision to increase the Passenger Movement Charge (PMC), as part of the new Federal Budget.

The travel and tourism tax will be raised from $60 to $70 from 01 July 2024, generating a total of $1.3 billion for the Government. However, only $420 million will be spent on border management (the stated purpose of the charge), AFTA highlighted.

“With the travel sector on the cusp of recovery post-COVID, and consumer & corporate appetite for travel already under pressure due to ongoing cost-of-living hikes, now is not the time for additional taxes, especially in a Budget in surplus,” AFTA CEO Dean Long said.

AFTA said with airline capacity still 30% down versus 2019, “rather than charging every person leaving Australia more, it makes more sense to support the recovery of the sector so that more people, both Australians and tourists, are travelling”.

The Budget measure will pull more than $500 million out of Australians’ travel budgets, hampering the industry’s recovery, Long stressed.

Tourism & Transport Forum Australia (TTF) has also slammed the move, with CEO Margy Osmond saying it would put more pressure on tourism operators, who employ over one million Aussies, at a time when they are still recuperating from the pandemic.

“However, we are pleased the Government has listened to industry and used real common sense by not introducing the increase until 01 Jul, 2024 to enable the aviation sector to adequately prepare for the implementation of the increase,” Osmond conceded.

“As we continue to recover from the biggest event to impact the tourism industry in recent memory, the freeze will be critically important to give the industry much-needed certainty.

“The government also needs to be more transparent about how the money collected through the PMC is spent, explaining where exactly it’s allocated, given the average rate of overcollection.”

The peak bodies, including AFTA, TTF and the Airlines Association of Australia (AAA), have collectively called for a five-year pause on further PMC rises.

Cruise Lines International Association (CLIA) has supported the position of the aforementioned industry bodies, with Managing Director in Australasia Joel Katz saying, “Australia already charges international travellers some of the highest fees in the world, and this only makes things worse.

“This increase will undermine the cruise industry’s efforts to revive its $5 billion-a-year contribution to the national economy and its ability to bring economic opportunities to communities around the country.”

Plans to increase application costs for visitor and working holidaymaker visas by over 20% has been identified as another budget measure that will knock the sector.

On a more positive note, Osmond and Long both praised the Government for maintaining Tourism Australia funding, saying “it is critical that our national destination marketing agency is adequately resourced”.

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