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AFTA congratulates the Government on honouring its election commitment to freeze the PMC and ushers in a new era for the application of passports

May 4, 2016 Business News No Comments Email Email

The 2016/17 Commonwealth Budget is set to improve consumer confidence, bring back the nations mojo, get people travelling again and this is good news for the Australian economy and for Australian travel agents.

The Australian Federation of Travel Agents (AFTA) welcomes the Commonwealth Budget that is travel and tourism friendly in a tough fiscal environment. The Coalition has maintained its election commitment to not increase the Passenger Movement Charge (PMC), establish a framework for the commercialisation of the Passport Application Lodgement Service (PALS) while also re-setting the macroeconomic settings to support growth and jobs.

This Budget is good news for the Australian travel industry with the Government implementing key macro-economic reforms to support future growth. The decision to limit bracket creep for individuals and improving the competitiveness of small and medium sized businesses such as travel agencies through a reduction of company tax is applauded by AFTA.

With the Department of Foreign Affairs and Trade (DFAT) recently announcing an open tender process for the provision of PALS, travel agents stand ready to be the new face of an improved customer service for Australians when they are submitting a passport application. AFTA notes that the increase in the application fees and also acknowledges the significant service improvements noted in the PALS tender documents. AFTA is looking forward to engaging with DFAT on behalf of the industry on this important issue.

The Government has ensured Australians are fairly rewarded for effort and hard work which will see around 500,000 Australian’s avoiding the 37 percent marginal tax rate. This will mean more Australians will have additional discretionary income to spend on domestic and international travel. With this tax cut, record low airfares and the continued freeze on the PMC, means there has never been a better time to book a holiday through an ATAS travel agent.

The tax cut for small businesses with a turnover of less than $10 million of 1.5% means these travel agents can further invest into their businesses for growth and can seek to hire more staff. 85% of AFTA’s members will now be taxed a 27.5% ensuring Australian small and medium sized travel agencies can continue to compete against the international online travel agent raiders.

The PMC will continue to contribute more than its fair share by raising $984.6 million in 2016/17, still an over collection of more than $700 million each year. The Government and Opposition must continue to freeze this tax and support programs that increase passenger movements to increase revenue raised through this tax.

The Tourism and Travel industry is disappointed that the Government has decided not to innovate and reform Australia’s Tourist Refund Scheme. The Tourism Shopping Reform Group’s budget submission indicated that the Government could create an economic impact of $226 million per annum. Importantly this reform would see Australian Boarder Force Officers back on the front line rather than checking travellers shopping receipts.

Quotes attributed to CEO of AFTA, Jayson Westbury:

Jayson Westbury CEO of AFTA said, “AFTA looks forward to continuing to work with the Government and Opposition in this election year. PMC is still an inefficient tax which has a direct impact Australian’s ability to pick the destinations they wish to travel to. It is critical that both sides of politics support the Australian travel and tourism industry by continuing this freeze through the next parliament.”

“The Government’s decision to only apply the efficiency dividend to consular support services is welcomed. With more Australian’s travelling than ever before and the threats ever increasing, ensuring that if something goes wrong assistance can be sought while travelling is imperative”, Mr Westbury said.

“The new corporate tax rate of 27.5% and instant right off 20,000 will be widely appreciated by an industry that employs more than 35,000 Australians in a low growth environment. The Government has macroeconomic settings right to stimulate growth in the Australian travel sector by bringing back the nations mojo,” Mr Westbury said.

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