Budget bites into travel

LAST night’s confirmation that the Government will impose a $10 increase on the Passenger Movement Charge (PMC) ( TD breaking news) has left the tourism and travel sector reeling.

TTF Australia CEO Margy Osmond slammed the move, saying it would make it harder for tourism operators, who employ over one million Aussies, to recover from the pandemic.

AFTA said the increase means a total of $1.3 billion generated for the Government, of which just $420 million is spent on border management, the stated purpose of the tourism and travel tax.

“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,” said AFTA CEO Dean Long.

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 suck more than $500 million out of travel budgets, Long said, at the worst possible time for the sector which is just starting to recover.

Having been faced with the 16% increase, the peak bodies including AFTA, TTF and the Airlines Association of Australia (AAA) are calling for a five-year moratorium on further PMC rises.

“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,” said TTF CEO Margy Osmond.

“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.”

Other budget measures slammed by the sector include plans to increase application costs for visitor and working holidaymaker visas by over 20%.

Osmond and Long both commended the Government for maintaining Tourism Australia funding, saying “it is critical that our national destination marketing agency is adequately resourced”.