Trans-Tasman blow up over departure tax gouging
Australia’s decision to drastically hike departure tax from July has sparked trans-Tasman ructions, with New Zealand Prime Minister John Key set to meet Julia Gillard over the issue.
From 1 July 2012, departure tax on passengers leaving Australia will rise by 17% to AUD55 in a move introduced in Australia’s federal budget.
Tourism operators on both sides of the Tasman have denounced the move as a money grab that goes against the Anzac spirit, ABC News has reported. They say it will damage trans-Tasman tourism and could cost both economies millions of dollars through lost revenue and jobs. The tax will hit Aussies heading to New Zealand and Kiwis returning home after a business or holiday visit to Australia.
On his current visit to New Zealand, Australia’s Tourism & Transport Forum (TTF) chief executive John Lee has apologised to New Zealanders for the increase. He said it would see Kiwi visitors to Australia fork out an extra NZD12.4 million in 2012-13.
Speaking at a press conference in Auckland yesterday, Mr Lee said sorry on behalf of Australia’s tourism industry for the additional impost, technically known as the passenger movement charge (PMC). He said the tax flew in the face of efforts to increase international visitor numbers.
“The passenger movement charge is a tax on tourism which acts as a barrier to entry for international visitors to Australia,” Lee said.
“In that way it’s a form of tariff protection, bordering on protectionism, practices we have been trying to stamp out for many years now.
“It’s hard to reconcile the efforts to grow visitation to Australia and double overnight tourism expenditure by 2020 with the decision to add 17% to the PMC, which is nothing more than a departure tax.”
Tourism Industry Association New Zealand chairman Norm Thompson said the tax would make airfares more expensive.
Queenstown’s Mountain Scene newspaper quoted Thompson (who is also deputy chief executive of Air New Zealand) as saying: “Australia is our largest and most valuable visitor market and our aim is to encourage travel here [to New Zealand].
“We have been pushing for a seamless border experience that will increase the flow of trans-Tasman travel, with streamlined border processing and ‘mates rates’ to halve the passenger movement charge for Kiwis and Australians.
“Instead the Australian Government has imposed this hefty increase on a tax that is already high.”
Thompson added that tourism was New Zealand’s second-largest market “and any potential impact on that is significant to the economy”.
Lee pointed out that the impost was the same for Australian families heading to New Zealand for a holiday.
“TTF, in partnership with New Zealand’s Tourism Industry Association, has been pushing for streamlined border processing between Australia and New Zealand, with Anzac Express Paths at both ends and ‘mates rates’ to halve the PMC for Kiwis, with a common border as the ideal outcome,” Lee said.
“We don’t believe visitors to Australia should prop up government revenues when they already make a massive contribution to the Australian economy, spending billions of dollars every year and supporting hundreds of thousands of jobs across Australia.
“Imposing additional cost is not the way to grow international visitation in either direction and we simply don’t believe the increase is justified.
“We are concerned the PMC increase will reduce international visitor numbers and have a negative impact on tourism in Australia’s regions, many of which are heavily reliant on tourism for economic activity and employment.
“The PMC was introduced to cover the cost of passenger processing at Australia’s international gateways and massively over-collects on that task, delivering the Australian government around $300 million more each year than it spends on passenger processing.
“The rise – and the future indexation of the PMC to inflation – will give the government an extra $610 million over the next four years – all coming out of the pockets of tourists.”
Written by Peter Needham
Maybe all the Kiwis should change their ways of travel and go to Australia by Boat as the Australian Government
does not charge “Boat people” to come to their Country and in fact they get hand outs.
Tourism is struggling now and this is just going to make it 10 times worse.