PMC Fury continues

As this issue of travelbulletin goes to press, the debate with the Federal Government over increasing the Passenger Movement Charge (PMC) by $5 to $60 per person continues. AFTA, along with IATA, BARA, TTF and other bodies, continues to make the case that this proposed increase is unjustified. There has been a significant campaign raging in Canberra over this issue and this has included a Senate inquiry in which several associations including AFTA appeared before the Senate Economics Committee to talk about why the increase to the PMC is inappropriate. How the travel industry ended up in the middle of an attempt by the Federal Government to introduce a new tax on backpackers which is meant to raise some $220 million in additional tax revenue is the $64 million question. The Treasurer made it clear that the new backpacker tax package had to “wash its own face” – or meet the revenue target that he set. While that may be the case it is not reasonable that the government has looked to the PMC to supplement its tax package due to its questionable economic modelling. The travel and tourism industry fully expects to pay its way, and does. But for many years it has been seriously overcharged. Taxes and charges levied on travellers far exceed what the Government spends to support travel and tourism. The numbers speak volumes. The current $55 PMC collects $1.03 billion per annum and it is expected that the collections will grow 5% per annum based on inbound and outbound growth forecasts. This year, the cost of providing border management and passenger facilitation at international gateways is around $237 million. The big question is what does the difference go towards? Definitely not passenger facilitation. So where does it all go? Well, consolidated revenue, and whatever else the government decides to do with it. It’s hardly a passenger movement charge when most of it goes to unrelated government expenses. For all these reasons we continue to make the point to the Government, Opposition and the Senate that the PMC should not be increased under any circumstances as there has not been adequate justification made for the increase proposed. What AFTA and the other associations are saying is that the Senate should not pass the increase to the PMC and in fact evoke a freeze on the charge for the next five years. The Senate should instead approve other bills including superannuation changes in which the Government would retain 95% of super contributions due to working holidaymakers from other countries and move on so we can have some certainty. This entire thing is a mess and has been handled poorly by the government. I hope that a reasonable outcome can be found and, perhaps by the time you read this, the outcome may be known.

Taxes and charges levied on travellers far exceed what the Government spends to support travel tourism’ and