Federal Government’s holiday tax hike risks overseas visitor surge

The Tourism & Transport Forum Australia (TTF) has seized on the latest ABS overseas arrivals figures to call on the Federal Government to scrap its plan to slap a $60 holiday tax on Australians and overseas visitors traveling out of the country.

The Federal Government announced last month as part of its backpacker tax package that it is planning to increase its holiday tax – the Passenger Movement Charge – 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 latest ABS Overseas Arrivals figures released today confirm that 7.99 million people travelled to Australia over the 12 months to August 2016 – up 10.9 per cent on the previous year.

Top 10 Nations for Overseas Arrivals League Table (Source: ABS)

Country of Origin Arrivals (12mths to August 16) Increase/Decrease
1.       New Zealand 1,326,900 2.7%
2.       China 1,168,700 22.5%
3.       UK 709,800 5.3%
4.       USA 683,100 17.4%
5.       Singapore 432,100 13.5%
6.       Japan 391,100 20.2%
7.       Malaysia 368,200 11.7%
8.       South Korea 270,100 25.1%
9.       India 245,800 9.0%
10.   Hong Kong 241,500 14.7%


“This is another strong performance for our international visitor market but its long term potential is being put at risk by a blatant policy of hiking taxes on Australia’s super-growth industry,” said Margy Osmond, TTF CEO.

“The Government’s holiday tax is already raising $1 billion a year on travellers, there is absolutely no justification for it to be increased to $60. The Prime Minister and Treasurer talk about being a lower taxing Government but the tourism sector is squarely in the Government’s crosshairs for tax hikes and fee increases.

“The Federal Government would like to brush off its tax hike on the tourism sector as ‘just a cup of coffee’ but the reality is that the holiday tax on a family of four is now a $240 cash grab from the family holiday budget that could pay for an extra day’s accommodation, a theme park excursion or a couple of days car hire.

“Prime Minister Turnbull has said during the election campaign ‘If you want less of something, tax it more’, and that is exactly what the Government’s current policy of viewing tourism as a ‘cash cow’ is going to deliver.

“If the Government is serious about supporting a strong future economy then it should be embracing policies that back our strengths which includes our growing visitor economy, not ratchet up taxes that undermine the ability of the sector to support more jobs and economic growth.

“The Government can demonstrate its support for the tourism sector by immediately scrapping the $60 holiday tax it wants to introduce from 1 July and work with the industry to attract more international visitors to Australia.”