Tourism chiefs warn PM Passenger Movement Charge rise will cripple industry

Taking overseas holidays will become more expensive after the Albanese government increased the $60 fee passengers are required to pay to leave the country in the federal budget.

Tourism organisations have slammed a federal budget measure that will inject $1.3bn to the government coffers but increase air travel costs for everyday Australians.

In Treasurer Jim Chalmers’ Tuesday federal budget was a decision to lift the Passenger Movement Charge (PMC) by $10 to $70 from July 2024.
The move was described as a “tourism tax” which would spell disaster for the travel industry, which was still recovering from the Covid pandemic, Tourism and Transport Forum chief executive Margy Osmond said.

“This will make it even more difficult for tourism to bounce back, as cost-of-living pressures increase and as the industry rebuilds from the devastating impacts of the Covid pandemic,” Ms Osmond said.

“It will also make it more expensive for international tourists to come to Australia, at a time when we’re desperately trying to attract more visitors, with Australia’s international tourism levels still below pre-Covid levels.”

Tourism chiefs the increase to the Passenger Movement Charge levied on every airfare leaving Australia would cripple the industry. Picture: AFP

The extra $10 charge on every flight leaving Australia will generate $1.38 billion in revenue in 2024/25 according to calculations from the Australian Federation of Travel Agents.

AFTA chief executive Dean Long said that “now is not the time for additional taxes” as travel remains 30 per cent below pre-Covid levels.

“Today’s decision to increase the PMC by 16 per cent is extremely disappointing and will make it harder for Australians families to stay connected,” Mr Long said.

Ahead of Tuesday’s budget, the tourism industry warned that raising the fee from the current $60 would make overseas holidays more expensive for families.

Three of the country’s leading tourism bodies have wrote directly to Anthony Albanese, urging the government to walk back any fee rises for the Passenger Movement Charge.

The chief executives of the Australian Airports Association, Australian Federation of Travel Agents, and the Tourism and Transport Forum are pushing for a five-year freeze on the charge over concerns an increase will cripple the nation’s tourism industry.

The Passenger Movement Charge is the $60 fee anyone — tourists and citizens — currently pays to leave Australia and is added on top of their airfare.

The three business chiefs claim the charge is now one of the highest taxes in the world, while the opposition tourism spokesman warned that any increase would have “real consequences for tourism”.

“The tourism sector is still struggling to recover from the impacts of the pandemic,” Tourism and Transport Forum CEO Margy Osmond said.

“International tourism levels in Australia still haven’t recovered, so any increase to the PMC would be a major setback. Without a five-year freeze, we risk losing jobs in our industry.”

A $20 increase on a family of four travelling, as the industry bodies feared would be announced in the budget, would have equated to the same cost of another night’s accommodation or three days of car hire, they claimed.

“The reality is an increased PMC means more expensive airfares and overseas holidays for Australians already struggling with cost-of-living pressures,” Australian Federation of Travel Agents chief executive Dean Long said.

“If the government wants to support tourism and the travel industry, they need to think twice before raising this tax, given the massive impact it will have on Australians and tourists alike.”

Before the pandemic hit, the tourism chiefs claim, the charge was raking $1.2bn into the government’s coffers every year.