PMC hike to carve more than $500m out of travel sector, says AFTA

The Australian Federation of Travel Agents was one of a number of trade associations which slammed yesterday's budget.

THE Passenger Movement Charge increase announced in the budget will see an extra $520 million lost out of the travel sector, according to the Australian Federation of Travel Agents (AFTA).

The announcement of the $10 hike in the PMC is “disappointing”, according to the trade association, given the travel industry is still on the cusp of recovery.

The increased PMC of $70 will generate $1.38 billion in revenue in 2024/25, the first fiscal year of the upsurge – of which only $420 million is to be spent on border management.

Growing tax receipts through increased travelling and traveller numbers would have been a better and fairer outcome, AFTA believes, adding the travel industry already more than pays its way to fund border security.

Chief Executive Officer Dean Long said his organsation, as well as the Tourism & Transport Forum (TTF) and Airlines Association of Australia (AAA), will be coordinating the sector’s response through the parliamentary review process to get the best possible outcome for the industry.

“[Yesterday’s] decision to increase the PMC by 16% is extremely disappointing and will make it harder for Australians families to stay connected,” he said.

“We know that the PMC does reduce air capacity to Australia and with supply of air seat still tracking 30% to pre COVID levels this will slow down our recovery.

TTF Chief Executive Officer Margy Osmond said the increase will make it even more difficult for tourism to bounce back, as cost-of-living pressures increase.

She said the industry is calling for a five-year freeze on any future increases to provide certainty for the tourism sector.

“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.

Osmond also expressed concern over plans to increase visa application costs for visitor and working holidayers by more than 20%.

Long said in the three years prior to the pandemic, the PMC collected on average $811 million more than needed.

“The Government is now demanding an additional $200 million for next year which is unwarranted and not appropriate especially in the current environment,” he added.

The departure tax was first introduced at a rate of $10, and even at the current rate of $60, is already one of the highest in the developed world.

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