Government tax on international travel may be here to stay

Kelly Emmerton

Friday 24 June 2016

Australia is a free country - until you want to leave. The majority of Australians don’t realise it, but their international getaway comes with a hidden ‘People Movement Charge’ of $55 from the government.

Government tax on international travel may be here to stay

The departure tax isn’t charged upfront, so 85% of Aussie travellers surveyed didn’t even realise they were coughing up for it. Instead, it’s tucked away in the cost of airline or cruise tickets, and hits the holiday budget of 20 million Aussies and tourists travelling through Australia’s international air and seaports each year.

According to a survey by the Tourism and Transport Forum Australia (TTF), more than 80% of Aussies feel the tax should either be lowered considerably, or that the revenue should be used to directly fund the Australian tourism industry.

However, neither of those outcomes appear likely.

Currently the tax is expected to raise almost $1 billion in revenue over the next financial year, with three quarters of that income injected directly into the government’s coffers. The other $250 million is actually spent on processing the international travellers who are footing the bill.

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TTF chief executive Margy Osmond described the tax as a “handbrake” on the Aussie tourism industry.

“The Passenger Movement Charge is a hidden holiday tax on every Australian and overseas visitor travelling through our international gateways and does nothing to support the growth of the industry and creation of more jobs,” she said.

After this year’s election, a bipartisan three-year freeze on the tax charge will end, and TFF along with Aussie voters are calling on political parties to continue the freeze for another term. 36.4% of Aussies thought politicians should pledge to reduce the cost of international travel to and from Australia and over a quarter said they would support a political party who promised not to increase the tax.

The parties, however, have so far resisted committing to a promise not to raise the tax further.

“Political parties cannot run dead on this issue during the election campaign – they must spell out their plans for this hidden holiday tax on travellers. This is their chance to announce they will continue to freeze the PMC at the current rate and commit to reducing the cost of this hidden tax over the longer term,” Osmond said.

Heading overseas soon? You might not be able to do anything about the departure tax, but you can snag a competitive deal on your travel insurance and save money while you’re abroad by checking out some savvy travel money solutions.

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