The sneaky tax making your family holidays more expensive

Family holidays could be hundreds of dollars a year cheaper if the government agrees to an industry call to have a sneaky tax axed.

Exclusive: Families could save hundreds of dollars a year on the cost of overseas holidays and more tourists could come to our shores under a plan to cut the Passenger Movement Charge.

The powerful Tourism and Transport Forum, who represent major organisations in the sector such as Qantas and Accor, has in its budget submission called on the Federal Government to remove or reduce the charge which it says is an unfair impost on Australians wanting to holiday abroad and is preventing more tourists coming to Australia to boost our economy.

The International Air Transports Association estimates an extra 350,000 visitors would come to Australia — boosting the local economy — without the tax.

The call comes as exclusive research by Neilsen on behalf of the TTF has revealed 65 per cent of Australians think tourism should be more important to the Federal Government and 57 per cent believe more money is needed to promote Australia overseas.

RELATED: Cost of servicing the family car could be cheaper under this plan

RELATED: More families having power cut due to rising energy costs

RELATED: How to get more time in your day and juggle better

The Passenger Movement Charge is eating into families’ travel budget.

Currently a family of five leaving the country are charged $300 extra in their ticket costs for both airline and cruise travel as a hidden Passenger Movement Charge tax.

The tax is charged at $60 per traveller over the age of 12 and most people don’t realise it exists.

The TTF, who will tomorrow hold its major summit in Sydney with speakers including Foreign Minister Marise Payne and Deputy Prime Minister Michael McCormack, says the charge is resulting in fewer families taking overseas holidays and fewer international visitors coming to Australia — as they are also charged the tax upon departure.

The PMC was introduced in 1995 to replace the departure tax to recover the cost of customs, immigration and quarantine processing of travellers.

In 2017/18 it collected $1.236 billion in tax revenue — however quarantine costs were only $616 million in the same year.

The TTF said the levy was just being used as an easy tax grab to boost consolidated revenue and was unfair on families and incoming tourists.

In 2017, Scott Morrison as Treasurer increased the tax from $55 to $60 per person despite much outrage by the sector.

The Passenger Movement Tax is charged at $60 per traveller over the age of 12. Picture: istock

Chief executive of the TTF Margy Osmond said scrapping the tax completely would be a positive thing for travellers and the broader economy as it would boost incoming tourist numbers as well as facilitating cheaper overseas holidays for families.

But if a full scrapping of the tax was not possible, it should be reduced or permanently frozen at current levels.

“We would love to see this tax scrapped,” Ms Osmond said.

“And if there must be a Passenger Movement Charge we would like to see it reduced or frozen and we want all of what is collected to be spent on the industry.”

Tourism Minister Simon Birmingham said Australia continued to see a record number of international visitors.

“We will always keep costs as low as possible but our government spends more on airport services including biosecurity, border protection and law enforcement than the total revenue collected from the passenger movement charge,” Senator Birmingham said.

“Australia continues to see a record number of international visitors flock to our shores, spending record amounts in our restaurants, hotels and shops.”

Scrapping the tax would boost incoming tourist numbers, says the industry. Picture: iStock

Opposition transport and tourism spokesman Anthony Albanese said Labor would not increase the PMC if it won government, but would not commit to scrapping it completely.

Labor opposed the (2017) increase in the PMC … Labor is committed to no increase in this charge during the next term of office if elected and unlike the Coalition, the Labor Party keeps its promises,” Mr Albanese said.

Executive Director of The Parenthood Alys Gagnon said families who could afford overseas holidays should not have a tax cut at the expense of hospital and education funding — of which any extra revenue would in part support.

“This is a tax that is helping to fund the essential services that families rely on like seeing a doctor and going to a great school,” she said.

“I wouldn’t class international travel as a basic cost of living expense. It’s a nice add on and something lots of families aspire to.”

The Andersons love to travel.

The family including mum Cath, 44, dad Jason, 47 and kids Jesse 24, twins Logan and Noah, 20, and daughter Peyton, 14, fiercely love Australia and travelling locally but also love experiencing new cultures overseas.

Cath and Jason Anderson with their children (from left) Logan, 20, Noah, 20, and Peyton, 14, and say they would travel more if the PMC was scrapped. Picture: Jonathan Ng

Until last year they had no idea the Passenger Movement Charge was a cost adding to their ticket prices and say if it was cut it would definitely help them to afford more travel.

“We try to go once a year,” Mrs Anderson, 44, told News Corp Australia.

“When you add up the cost that we’re all paying for this tax it’s a lot of money. That’s a night’s accommodation or a day’s worth of meals and for some people the charge may prohibit them from travelling.”

Ms Anderson, disputed that simply because they travelled it meant they simply should pay the charge.

“We save for it and also travelling overseas and exposing the kids to different cultures widens their world view,” she said.

@pollietracker

Originally published as The sneaky tax making your family holidays more expensive