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Tourism sector welcomes new hurdles for taxes

November 11, 2016 Headline News No Comments Email Email

egtmedia59Tourism advocacy bodies have welcomed reports that Labor and the Crossbench will take the proposed AUD 5 increase to the departure tax (or Passenger Movement Charge) off the table, along with proposals to amend the Government’s 19% backpacker tax to 10.5%.

“Taxing visitors comes with all kinds of complications for our industry and sends a very negative message to the highly competitive international visitor market,”

Australian Tourism Export Council (ATEC) managing director, Peter Shelley, said on hearing the news.

“Tourism export is Australia’s great success story and holds outstanding future potential, with growth in international spending recording double digits year after year, so any policy move that detracts from our competitiveness is highly risky.

“Moves by Labor and the Crossbench to create a better policy platform for our industry are very welcome and we are particularly supportive of removing the $5 increase to the PMC, as we have argued previously.

“ATEC fails to see how increasing tax measures would produce a positive outcome for the tourism industry and, the significant contribution it makes to the Australian economy.

“Unfortunately, this protracted uncertainty and lack of clarity is having a negative impact on traveller’s perception of Australia.

“The PMC should never have been bundled in with the Working Holiday Maker reform package and we believe the Government should consult further with industry on any future proposed tax changes in order to ensure we are setting the right policy agenda and maximising our export tourism potential.”

The Tourism & Transport Forum Australia (TTF) has welcomed what it called the “common-sense support” of Federal Labor in opposing the Federal Government’s plan to increase the PMC to AUD 60 from 1 July 2017.

TTF tabled an economic analysis by KPMG in the Senate Inquiry that shows the proposed increase in the holiday tax is completely unnecessary to fund the AUD 540 million revenue target set by the Federal Government – the modified backpacker tax rate will more than cover the amount.

“The Federal Government should never have included an increase in the holiday tax as part of its revised backpacker tax package. The analysis by KPMG commissioned by TTF has shown that it is completely unnecessary to compensate for any cut in the backpacker tax rate,” said TTF chief executive Margy Osmond.

“The tourism industry welcomes the support of Federal Labor in encouraging the Government to abandon its ill-considered plan to increase the cost of travel to Australia.

“The holiday tax already raises AUD 1 billion a year for the Federal Government and it’s growing on its own, it doesn’t need to be increased further.

“The Government has tried to dismiss the hike in the holiday tax as ‘just a cup of coffee.’ It’s not a cup of coffee, it will be AUD 60 tax per person or AUD 240 for a family of four (over 12 years) – that is another night’s accommodation, entry to a museum or theme park or a couple of days car hire.

“It’s time for all parties involved to come to a fair compromise on the backpacker tax that does not include a completely unnecessary increase in the Passenger Movement Charge. Tourism will no longer stand to be treated as a ‘cash cow’ by any Government or political party.”

Edited by Peter Needham

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