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Backpacker tax review welcome but PMC must be next

March 17, 2016 Association No Comments Email Email

The Australian Tourism Export Council (ATEC) today welcomed the Federal Government’s announcement to review plans which would prevent backpackers accessing the tax-free threshold while working in Australia.

Announced in last year’s budget, the changes would apply to international visitors on working holiday maker visas and affect around 200,000 youth travellers.

“It is in the Government’s interest to remove measures which make Australia less competitive and accessible to the international visitor market and which directly affect our desirability as a destination,” ATEC Managing Director, Peter Shelley said today.

“Today’s traveller is highly discerning and price sensitive, and visa fee hikes and other costs present an added barrier which can work against even the best marketing effort.

“While we welcome this announcement, the much more damaging threat of an increase to the Passenger Movement Charge (PMC) remains on the table.

“We would strongly welcome a commitment from the Turnbull Government to rule out any future increases to the PMC, a move which would strengthen the success of our industry in coming years.

“The tourism industry is the leading export, worth more than $36bn a year to Australia’s economy and the Government must recognize its growthing value rather than jeopardise its future with retrograde tax grabs.

Mr Shelley said the industry previously fought against the introduction of CPI increases to the PMC, and were given a ‘one-term’ reprieve by former Prime Minister, Tony Abbott.

“We are calling on the Turnbull Government to take any PMC increases off the tax table and commit to freezing it at its current level.

“Internationally it is well known that increases to taxes like the PMC and the UK’s Air Passenger Duty have a direct impact on visitation and spend. In the UK, the increases had to be wound back as they were clearly having a negative impact.”

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