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Passenger Movement Charge increase will see an extra $520M lost out of Travel Sector

The Federal Government decision to generate an extra $520M over the 5 years from 2022/23 from a $10 hike in the Passenger Movement Charge (PMC) on every person leaving Australia is disappointing given the current state of the Travel Sector.
 
Revenue generated through the lifting of the PMC to $70 on every departure will now hit $1.38B in 2024/25, $420M of which is spent on Border Management. This is a tax introduced to fund Border Security measures and Travel already more than pays its way.
 
With the Travel Sector on the cusp of recovery post-COVID, and consumer and corporate appetite for travel already under pressure due to ongoing cost-of-living pressures, now is not the time for additional taxes especially in a Budget in surplus.
 
Travel is still 30% down on pre-COVID levels. Rather than charging every person leaving Australia more, it makes more sense to support the recovery of the sector so that more people, both Australians and tourists, are travelling.
 
About the Passenger Movement Charge (PMC)

• The departure tax was first introduced at a rate of $10.00, the PMC now sits at $60.00 which is a 500 per cent increase. At $60.00, it is one of the highest departure taxes in the developed world.
• Prior to the COVID-19 pandemic, the PMC was generating over $1.2 billion in tax revenue each year, which was considerably greater than the current expenditure on border management by the Department of Home Affairs, and the Department of Agriculture and Water.
• Our industry is supportive of strong biosecurity measures to protect our natural environment and core industries

Quotes attributable to AFTA CEO Dean Long
“Today’s decision to increase the PMC by 16% is extremely disappointing and will make it harder for Australians families to stay connected. We know that the PMC does reduce air capacity to Australia and with supply of air seat still tracking 30% to pre COVID levels this will slow down our recovery.”
 
“In the three years prior to the pandemic, the PMC collected on average $811 million more than needed to fund the biosecurity requirements to keep the community and agriculture sector pest free. The Government is now demanding an additional $200m for next year which is unwarranted and not appropriate especially in the current environment.”
 
“AFTA, TTF and AAA will be coordinating the Sector’s response and our efforts through the parliamentary review process to get the best possible outcome for our members, clients and the Sector at large.”

[1] NOTE – this is expenditure on Home Affairs; Budget papers do not allow us to estimate spend on Agriculture/BioSecurity measures

MEDIA CONTACT: LJ Loch 0488 038 555 lj.loch@afta.com.au