Federal budget departure tax hike to hit travellers leaving Australia from July 1, 2024

The cost of flying or cruising out of Australia is set to increase, in a move tourism bosses have said is disappointing and short-sighted.

Travellers at Sydney International Airport departures. Picture: NCA Newswire/Gaye Gerard

The cost of travelling overseas is set to rise from July 1, 2024 when the federal government raises the departure tax from $60 to $70 for the first time in seven years.

Also known as the “passenger movement charge” the fee is levied on all passengers leaving the country on international flights or cruise ships, regardless of whether that person plans to return to Australia.

It was last raised in 2017, and the budget papers noted the latest hike was “broadly in line with inflation” and would deliver an extra $520m in revenue over the next five years.

The charge was collected by airlines and cruise ship companies on behalf of the government, and factored into fares.

Australian Federation of Travel Agents chief executive Dean Long described the increase as “disappointing given the current state of the travel sector”.

“Travel is still 30 per cent down on pre-Covid levels,” said Mr Long.

“Rather than charging every person leaving Australia more, it makes more sense to support the recovery of the sector so that more people, both Australians and tourists are travelling.”

He said it was well known that the passenger movement charge reduced air capacity to Australia, and the increase would slow down the recovery.

“In the three years prior to the pandemic, the passenger movement charge collected on average $811m more than needed to fund the biosecurity requirements to keep the community and agriculture sector pest free,” Mr Long said.

“The government is now demanding an additional $200m for next year which is unwarranted and not appropriate especially in the current environment.”

The Australian Chamber tourism chair John Hart expressed similar concerns, calling the hike a “short-sighted move that would slow down the return of international tourism arrivals”.

“The country’s price competitiveness is already low, ranking 116 out of 117 economies, due to imposts such as the passenger movement charge, making Australia the most expensive in the world in terms of passenger taxes,” said Mr Hart.

“Australian Chamber tourism is calling for a freeze on any further increases in the passenger movement charge for the next five years, and for the revenue collected from the charge to be allocated towards covering the costs of moving passengers in and out of the country.”

Australian Tourism Export Council managing director Peter Shelley said the timing of the increase was of concern “given the industry was only halfway through its recovery”.

“Any disincentive to travel is not a positive to our recovery,” Mr Shelley said.

“What we would hope is that any additional revenue collected by the government from tourism activities, was redirected back to the benefit of the industry, and to support the recovery.”

The charge imposed on travellers departing Australia was one of the highest in the world among countries that collected a departure tax.

In Japan, a $13 departure tax was levied, Canada collected $44 from every person leaving the country and China imposed a $24 fee.

Flying out of the United Kingdom to Australia incurred a $156 “air passenger duty” rising to as high as $356 for business and first class travellers.

Sri Lanka, Sweden and Fiji charged similar amounts to Australia while the US imposed an exit tax on its own citizens and long-term residents.

Few other budget measures targeted the tourism industry, with the main marketing organisation Tourism Australia enduring a 12 per cent cut to its funding.

The $24m reduction in its budget was first flagged in the October budget and would not impact staffing.