Raising airport tax raises industry ire
“A blatant grab for cash”. That’s how Tourism & Transport Forum CEO Margy Osmond sees the idea of the federal government increasing the passenger movement charge by “up to 400 per cent”.
A complex array of new airport tax levels have been outlined in a report, Joint Border Fees Review Draft Position Paper, prepared by Customs and the Department of Immigration for immigration minister Scott Morrison. These include a flat rate of $200 for business-class passengers and $270 for first-class flyers – all up from the present $55. Travellers would face $64 a flight and those to US, Britain or Europe $75 under the new proposals. Travellers to New Zealand would pay less – $42 a flight under the new proposal.
The government will reap more than $900 million from this tax this financial year at its current rate.
The TTF has long objected to the departure tax and has stressed any increase in the departure tax would be ludicrous. “At a time when other countries are reducing or removing their departure taxes altogether, any rise in the passenger movement charge would act as a deterrent for potential visitors to Australia,” said Ms Osmond. “The tourism industry rejects the assertion that any change to the passenger movement charge must be revenue-neutral, because reducing the PMC and improving our visa processing will help attract more visitors to Australia who will spend money throughout the country, supporting jobs and businesses nationwide.”
“The Australian Federation of Travel Agents does not support any changes to the passenger movement charge other than a reduction in the cost by way of the removal of the disparity between the actual cost recovery for the service provided to passengers and the amount charged,” said Jayson Westbury, chief executive of the federation.
“Further, we do not agree with any government using a departure tax as a general taxation collection. It is expensive to administer for the industry and, in a very tight-margined business, an unwelcomed impost and intrusive way for government to dilute the industry’s margins,” said Mr Westbury.
The Board of Airline Representatives of Australia has urged the government to modernise the provision and cost recovery of border protection services. In a submission to the joint review of border fees, taxes and charges, BARA asked the Abbott government to reduce excessive taxation through five-year plans to fund border protection agencies.
International carriers have long protested that the government is replenishing its coffers by levying fees that are well above the cost of the services it’s provides, especially with the passenger movement charge. BARA executive director Barry Abrams says, “There is now a very large disconnect between the revenues collected through the PMC and the provision of border protection services.”
Prior to the election, the government promised to freeze the passenger movement charge at $55 for the whole next term of parliament.
Mr Morrison insists, “The discussion paper canvassed a spectrum of options and does not reflect government policy. It is important to consult industry. To do that we have to put options before them to see where sensitivities may exist to inform policy development and implementation.”
Meanwhile Andrew Robb, the pseudo minister of tourism, maintained, the tax had been “frozen” for this term.
Australia’s airport tax is the world’s most expensive international travel tax for short-haul flights – almost three times the cost of the British tax on flights shorter than 3220kms, such as Sydney-Auckland. The World Economic Forum’s Travel and Tourism Competitiveness Report recently ranked Australia 130 out of 140 nations for its air ticket taxes.
