Mates’- rate airport tax a wizard idea from Aus
ABOUT 1.2 million Kiwis fly to Australia each year to holiday and do business. We’re Australia’s single largest visitor source, with flights from New Zealand bringing close to one-fifth of total arrivals. That compares to more than twofifths of arrivals in New Zealand coming from Australia. Now the Ockers want more.
In a report released last Thursday, Bringing our Neighbours Closer, the Australian Tourism and Transport Forum suggested four major reforms to reverse what has been stagnant growth and attract another 200,000 New Zealand tourists by 2020. The reforms effectively want to treat the trans-Tasman journey like an Australian domestic flight through streamlining border formalities at exit and entry, creating a new border processing model for regional airports, developing a common visitor visa to encourage more international visitors to combine both countries in a single trip and cutting the departure tax to $25.
I want to focus on the latter suggestion – a mates’- rate tax for Kiwis. Departure taxes are typically disguised within the overall ticket price, so travellers don’t really know what they’re paying. Although a few Kiwis expressed anger when the Australian Passenger Movement Charge was raised to $55 two years ago, the report said very few trans-Tasman travellers protest the payment. It was an easy tax for the federal government to collect in that ‘‘the goose being plucked produces many feathers with very little hissing’’, the report said.
Yet the Aussie departure tax is the second highest in the developed world, well above New Zealand’s $25. It amounts to around 18 per cent of the lowest return ticket to NZ or almost 30
A $25 departure tax on trans-Tasman flights stacks up.
per cent of the one-way fare. The tax ignores the distance travelled, with Kiwis paying the same as all other travellers, despite their processing costs being only a fraction of those for long-range flights. Beyond reasons of fairness, the report said a $25 departure tax on trans-Tasman flights stacks up on commercial grounds because New Zealand is such a pricesensitive market. Research shows for every 1.5 per cent rise in ticket prices to Australia, demand drops around 1 per cent. Other developed countries have repealed or reduced their departure taxes to boost tourism demand. Jetstar estimates treating NZ as an Australian domestic destination would cut a one-way trans-Tasman airfare by as much as NZ$60, and the report said reducing the tax to $25 would boost New Zealand visitors by an estimated 71,000 by 2020. I don’t doubt preferential treatment from our neighbours would make most Kiwis travellers, 94 per cent of whom have visited Australia before, take another look. That’s what mates do.