The hidden holiday tax that costs us billions

If you were one of the more than nine million Australians who travelled overseas in the past year you would have paid a sneaky tax when you left the country.

The Federal Government likes to call it the Passenger Movement Charge. But it’s really nothing more than a holiday tax on Australians heading overseas and international travellers visiting our country for a vacation, family reunion or business.

Every time an Australian or overseas visitor leaves the country on an aeroplane or cruise ship, they are being slugged a $55 fee on their ticket.

On a one-way $220 ticket from Melbourne airport to Bali, a staggering 25 per cent of the cost of your ticket is paid in the holiday tax.

An analysis by the Tourism & Transport Forum Australia (TTF), based on data from federal Budget papers, finds that this tax will raise more than $4 billion for the government’s coffers over the next four years — that’s an average of $1 billion each year.

With more Australians travelling overseas and more international visitors coming to our shores than ever before, the Federal Government has turned this holiday tax into an ever-growing cash cow.

With about 4.35 million Australians and international visitors travelling overseas through Melbourne airport, the Federal Government will be raking in nearly $1 billion from Victoria alone over the next four years.

The government claims it imposes the holiday tax on travellers to cover the cost of providing Customs, immigration and quarantine at international gateways.

These are important border security services but the cost of providing them is estimated to be around $247 million across the entire country — meaning a whopping three times the operating cost is coming out of travellers’ wallets and straight into the government’s bank account.

If the holiday tax was a true cost-recovery fee on travellers it should be only about $14, not $55 — a near 400 per cent overcharge on people travelling overseas.

Many families, whether in Australia or overseas, scrimp and save to be able to afford a modest getaway overseas once in a while. They don’t deserve to be hit by a hidden tax that can add up to hundreds of dollars on the cost of their travel.

In 2015, international visitor expenditure in Victoria increased by a massive 30 per cent to $6.52 billion and international visitor numbers increased by 14 per cent to 2.42 million. That’s a fantastic result and one we should be building on by reducing the cost of travelling to Australia.

Attracting more international visitors by cutting the travel cost of coming to Australia makes far more sense to grow this valuable economy than hidden travel taxes like the holiday tax and rising visa fees. A national TTF survey of 1000 Australians revealed that 85 per cent of people aren’t aware they are paying this “hidden” holiday tax.

More than 80 per cent of those polled said the tax should be slashed or at the very least the revenue raised should be directed to support the growth of Australia’s tourism industry and not the government’s coffers.

Tourism can be a super-growth industry for the Australian economy that can support thousands of new jobs and help maintain our envied quality of life if we back the industry with an economic plan that reduces the cost burden of visiting Australia.

International visitors want to come to Australia but they also want value for their money — just as an Australian does when booking an overseas holiday.

This foolhardy cash grab on Australian and international travellers has to stop if we are serious about our visitor economy reaching its full potential.

This opinion piece appeared in the Herald Sun: