The tourism industry found elements to praise in Australia’s Federal Budget, handed down on Tuesday, with the Australian Federation of Travel Agents (AFTA) describing it as “travel and tourism friendly in a tough fiscal environment”.
AFTA congratulated the Government on honouring its election commitment to freeze the departure tax (officially named the Passenger Movement Charge, or PMC) and to usher in “a new era for the application of passports”.
The Budget was set to “improve consumer confidence, bring back the nation’s mojo and get people travelling again”, AFTA said.
AFTA praised the Budget for establishing a framework for the commercialisation of the Passport Application Lodgement Service (PALS) while also “re-setting the macroeconomic settings to support growth and jobs”.
“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,” a statement said.
“The Government has ensured Australians are fairly rewarded for effort and hard work which will see around 500,000 Australian’s avoiding the 37% 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.”
For agents, the tax cut of 1.5% for small businesses with a turnover of less than AUD 10 million means theose travel agents will be able to further invest into their businesses for growth and can seek to hire more staff, AFTA said.
“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 AUD 984.6 million in 2016/17, still an over collection of more than AUD 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.”
AFTA continued: “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 AUD 226 million per annum. Importantly this reform would see Australian Border Force Officers back on the front line rather than checking travellers shopping receipts.
While both the Australian Tourism Export Council (ATEC) and the Tourism and Transport Forum (TTF) slammed the Government’s decision to press ahead with plans to impose a tax on backpackers, they also found elements of good in the mix.
“We are pleased to see the certainty of funding for Tourism Australia over the next four years,” said TTF chief executive Margy Osmond, “but given the Treasurer’s strong rhetoric on supporting the future industries of the Australian economy which would include the tourism sector, we would certainty expect to see a significant increase in funding for Tourism Australia in the future.”
“The Federal Government’s decision to stay its hand on visa fees and the continuing freeze of the Passenger Movement charge at the current AUD 55 rate is good news.”
The TTF added: “The establishment of an infrastructure financing unit to work with private sector to develop financing solutions for important infrastructure projects is a positive announcement.
“We are starting to see the fruits of the Federal Government’s Asset Recycling Scheme with a number of states and territories taking advantage of the fund to recycle their ‘lazy assets’ into new productive economic infrastructure such as the Sydney and Melbourne metro rail projects.”
ATEC managing director, Peter Shelley, welcomed innovations in the Budget in visa processing, including new user-pays, fast-tracked visas for India and the UAE, along with three-year multiple entry visas for India, Thailand, Vietnam and Chile.
“ATEC is pleased to see the Government has heeded industry’s advice and retained visa fees, and the Passenger Movement Charge at current levels and also provided premium processing at airports which will help to us to engage the international luxury market.
“We welcome the support of Trade Minister Ciobo in working to retain the Government’s funding commitment to Tourism Australia, which will help to keep Australia competitive in what is an increasingly aggressive market.
“With our overall tourism exports achieving extraordinary rates of growth and contributing significantly to our export income, we need to be embracing and strengthening the opportunities offered by Australia’s export tourism industry.
“With outstanding results such as an 8% year-on-year increase in international visitor numbers, 18% growth in expenditure and a forecast to reach export earnings of more than AUD 42 billion a year in the next 5 years, we should be doing all we can to build on all our market segments.
“While Australia is a highly desirable destination for international visitors, the enormous global growth in travel means we face stronger competition from an increasing number of countries who see the economic value of gaining a greater share of the market.”
Edited by Peter Needham