VTIC calls for scrapping of accommodation tax

The tourism body has called for a priority shift in order to bring the state back to where it was before the pandemic, Janie Medbury reports.

THE Victorian Government’s $170 million pledge to support tourism initiatives across the state following the catastrophic cancellation of the Commonwealth Games is “inadequate”, the Victoria Tourism Industry Council (VTIC) has argued in its budget submission.

Part of the $2 billion Commonwealth Games Support Package announced last year in the wake of then-premier Dan Andrew’s controversial decision to scrap Victoria’s plans to host the 2026 Games, the cash injection is dedicated to tourism initiatives across marketing, investment, infrastructure, industry development, and events throughout regional Victoria.

However, VTIC has called for a “redistribution of funds to better service regional Victoria’s infrastructure needs”, stating that the $60 million currently allocated to tourism infrastructure is not enough to “address the magnitude of the task at hand”.

The industry body has recommended that the Government re-allocate $40 million from the $70 million Regional Events Fund within the Commonwealth Games Regional Tourism Support Package to the Tourism Infrastructure Development Fund, bringing that fund to a total of $100 million.

The 34-page budget submission for 2024/25 released this week also argued against the Victorian Government’s proposed 7.5% short stay accommodation tax, which aims to encourage more property owners to shift their residences from short-stay platforms, such as Airbnb and Stayz, onto the long-term rental market.

VTIC believes the tax, due to take effect in January 2025, will “do little to achieve the desired outcome”, and will instead see the impost passed onto visitors, who will be slugged with an additional 7.5% tax on top of the cost of the daily rental and all its associated fees, charges and admin costs.

“The growth of the visitor economy in our regional areas will rely heavily on the inventory of short-stay properties to support the projected visitation,” the report reads.

“This new tax comes at a time when we are already seeing a softening of the domestic market with intrastate regional visitation showing signs of decline in the last two quarters. This tax will only serve to exacerbate the emerging slump in regional tourism spend and do little to nothing to increase housing supply in our regions.”

Attracting and retaining a skilled workforce should also be a key priority for the Government when it comes to strengthening Victoria’s tourism industry, the report highlights, along with several other priorities including the development of a sustainable cruise strategy and ensuring Melbourne Airport has the capacity to manage the projected increase in visitor numbers.

“We are still sitting in the number three spot overall for total tourism spend in the country, relinquishing our number two position behind NSW to Queensland during the pandemic, and we are unlikely to regain that spot without the Victorian Government going hard at driving demand for our destination,” VTIC Chief Executive Felicia Mariani wrote in the document’s opening letter.

“To now sit at $37.8 billion in total spend from visitors to our state is an achievement we should be proud of, but the job is not done, and Victoria cannot afford to take its foot off the pedal as we revel in the glory of what has been achieved.”

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