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Widely detested departure tax hike teeters in balance

November 9, 2016 Headline News No Comments Email Email

egtmedia59A new nationwide poll has slammed the Federal Government’s plan to hike its departure tax, or holiday tax – officially called the Passenger Movement Charge – which is poised to hit millions of Australians and international visitors departing the country on planes and cruise ships from 1 July 2017. It seems increasingly likely that the tax hike may be wiped out in the Senate.

The poll of 1000 people across Australia has revealed that close to three in five Australians (58.6 per cent) disagree or strongly disagree with the Federal Government’s plan to increase the Passenger Movement Charge to AUD 60 from 1 July 2017, the Tourism and Transport Forum (TTF) announced yesterday.

The backpacker tax, which is associated with the proposed departure tax rise, may possibly be defeated before it takes effect. The legislation that would see all working holiday-makers taxed at 19% – instead of the original 32.5 per cent – is increasingly likely to be crushed in the Senate, as Labor and the crossbench seek amendments to further lower the rate to 10.5%.

The Federal Government included the proposed increase in the holiday tax – without any consultation or forewarning to industry – as part of its revised backpacker tax package. The legislation is due to be debated in the Senate next week following the conclusion of an inquiry over the past two weeks.

According to the poll, just 3% of people support any further increases in the holiday tax with 29% supporting a lower rate and 19% saying it should be abolished entirely.

More people (23.3%) support the AUD 750 million profit the Federal Government reaps from the holiday tax being reinvested back into the tourism industry than going into consolidated revenue (20.8%).

A clear majority of those surveyed (52.6%) believe that reducing the cost of travelling to Australia should be a priority for the Federal Government with two in five people (40.6%) indicating that the holiday tax influences their holiday planning.

TTF chief executive Margy Osmond said the Federal Government should simply scrap its decision to increase the holiday tax on travellers and instead work with industry to make Australia a more competitive destination for visitors.

“The Federal Government’s plan to increase the holiday tax to AUD 60 on every traveller leaving the country on an aeroplane or cruise ship is short-sighted at best and economic sabotage at worst,” Osmond said.

“You don’t have to be Einstein to work out that if you want to encourage more people to visit your country you should be reducing the cost of travel not adding to it by hiking the Federal Government’s holiday tax.

“Labor, the Greens and the crossbench Senators need to draw a line in the sand on behalf of the tourism industry and say no more to the industry being treated as a ‘cash cow’ by successive Federal Governments.

“Over the coming decades, the tourism industry is going to be called upon to do more of the heavy lifting in providing the jobs and economic growth that will sustain the Australian economy and our envied quality of life. Burdening the industry with higher taxes is not the way to allow the visitor economy to reach its full potential.

“I’m calling on behalf of the tourism industry for Labor, the Greens and the crossbench Senators to separate the holiday tax hike legislation from the working holiday maker reforms and vote against this measure that would increase the holiday tax to AUD 240 for a family of four leaving Australia.”

Edited by Peter Needham

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