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Record 8 Million Overseas Visitors Pouring Money into Government Coffers Just More Evidence That Holiday Tax Hike Not Needed

November 11, 2016 Business News No Comments Print Print Email Email

The latest round of overseas arrivals figures released by the ABS today that confirm strong growth in the number of tourists visiting Australia – cracking more than 8 million for the first time – is just further evidence of why the Federal Government should scrap its plan to increase the holiday tax – the Passenger Movement Charge – said the Tourism & Transport Forum Australia (TTF).http://www.tourismlegal.com.au/

The Federal Government announced as part of its working holiday maker reform package that it wants to increase the holiday tax to $60 from 1 July 2017. For a family of four people (over 12yrs) this is a $240 tax grab for booking a ticket on an aeroplane or cruise ship to travel overseas.  The holiday tax is expected to raise nearly $1 billion from travellers this financial year.

The holiday tax has a very significant impact on short-haul international flights to destinations in New Zealand and Asia where the tax has a far greater impact on the ticket price.

The latest ABS Overseas Arrivals figures released today confirm that 8.1 million people travelled to Australia over the 12 months to September 2016 – up 11.1 per cent on the previous year.

Country of Origin Arrivals (12mths to September 16) Increase/Decrease
  1. New Zealand
1,341,100 3.2%
  1. China
1,174,000 21.1%
  1. UK
709,800 5.1%
  1. USA
690,400 17.8%
  1. Singapore
439,100 14.3%
  1. Japan
396,200 20.2%
  1. Malaysia
376,300 12.7%
  1. South Korea
276,800 28.3%
  1. India
249,200 9.6%
  1. Hong Kong
241,400 13.6%

“These are great numbers but we need to be thinking about the potential for them to be even better by supporting our tourism sector rather than jeopardising future growth through higher taxes such as the backpacker tax and the holiday tax,” said Margy Osmond, TTF CEO.

“The Federal Government’s holiday tax – the Passenger Movement Charge – is already a growth tax for Treasury’s coffers. The holiday tax is growing at 5 per cent a year and there is no economic justification to increase the holiday tax to $60 from 1 July 2017.

“We simply cannot keep increasing the taxes and charges on traveling to Australia and believe that it will not have any effect on the number of visitors coming to our country. Every extra dollar on the cost of travel is a disincentive to visit Australia. Worse in fact, it is free advertising to encourage visitors to pick another destination in Asia, Canada or Europe.

“Tourism is an industry we should be fostering through streamlining processes and reducing costs not raising taxes.”

“We are continuing to see strong growth in our key international markets and China is continuing its rapid rise up the ranks to likely hit the top in the next year. Let’s not put this at risk by ill-considered cash grabs on an industry that is already being overtaxed.”

Ms Osmond said the strong growth in the number of Americans visiting Australia – up 17.8 per cent – might see a further surge following the results of the US Election.

“For all those Americans who are in shell-shock at the idea of President Trump, the best advice is to come to Australia and enjoy our fabulous summer.”

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