Tax grab on overseas visitors is another blow to tourism

The purpose of the Passenger Movement Charge Amendment Bill 2012 is to amend the Passenger Movement Charge Act 1978 and to increase the rate of the passenger movement charge, the PMC, from $47 to $55.

As we know, the government promised about two months before the budget that it would not increase this PMC which clearly became nothing more than a blatant tax grab to try to help this government move into this mythical surplus.

We certainly have not seen a surplus to date and I doubt whether we will see one in the future. But worse, the government is not just increasing those costs to the industry and to passengers and tourists coming into this country; at the same time it is cutting the resources to deal with processing of tourists.

This means that tourists will be paying more for the privilege of taking longer to get through the process at the airports.

We do know that the government originally planned to introduce the annual indexation of the passenger movement charge from 1 July 2013 and this would have added a further cost of $156.6 million over four years to the passenger movement charge.

Visiting Australia in the current economic climate is not the cheapest of exercises for tourists. As we see the Australian dollar edge once again above parity, the cost for international visitors increases and our tourism competitiveness declines.

Why would you add to that cost for tourists coming to Australia? Why would you make it harder and more expensive and discourage tourists from coming here through increases in indexation, as we saw with this government, from $47 to $55? There is no doubt that there are impacts on our tourism industry.

We are seeing this and I do not understand why the government would seek to add to the problems that this industry is facing, to add to the problems of all the small businesses.

It is only the opposition putting the amendment on the table and pressure from the tourism sector making this government drop its plans to index the passenger movement charge.

We know that not only is it an issue for tourists coming here, but the high value of the Australian dollar is actually encouraging Australians to holiday overseas. I see this in my electorate.

Many of the small businesses in my electorate have been affected by this. Whether they are in tourism, hospitality or retail, they have all felt that exodus, even of local tourists.

For some of the small businesses, the combination of the cost to come here and the exodus of Australian travellers means they have had to make some very tough commercial decisions.

I have also dealt with pensioners who are trying to live in Asia but still claim their Australian pension because their pension goes so much further overseas.

There is no doubt that any increase to the passenger movement charge will impact on foreign visitors to our shores.

We know that it is comparatively cheaper to leave Australia to holiday than to come here for a holiday. In part, it can be due to the high cost of living compared to other nations, but at each point the government seeks to make that differential even greater.

According to Mercer Human Resourcing Consultant, Economist Intelligence Unit and ECA International cost-of-living surveys, four Australian cities are among the most expensive in the world to live.

We know Sydney, Melbourne, Perth and Brisbane are ranked 14, 21, 30 and 31. Accommodation and a night out are not necessarily cheap by international standards.

We do not need any additional reasons for people and tourists not to come to Australia, but that is what the government seems intent on achieving. It is not necessarily cheaper to live in regional areas than in major cities and the cost of delivering goods and services in regional Australia can mean more expense.

We know that the government’s carbon tax will make both the base cost and the additional impost in regional areas even worse. Then you are going to add increases to the passenger movement charge.

A survey by Sky Scan found Australia was the 16th most expensive country to visit. Not only is this the worst time to introduce the world’s largest carbon tax, but the government continues to increase costs and reduce services to the tourism sector.

It is really the worst time along with these additional costs and challenges. The government should understand that this is the worst time to increase costs for tourists coming to and leaving Australia.

We do not want to discourage one more person from coming to our country. You see the small business operators who have been struggling for some time, are still struggling and will struggle further. We know that that will be the case.

The tourism sector is also facing real problems because of the government’s changes to the Fair Work Act. The lack of flexibility in the act is a millstone around the neck of many small tourism operations.

I hear this over and over in my electorate. It is one of the reasons that a cup of coffee costs so much on a weekend, especially in Perth.

In its continual program of selling out small businesses perhaps in favour of the union movement, the Gillard government is selling out not only Australian coffee drinkers but the tourism industry around the nation.

One of the great things that you can do as a tourist is eat and drink some of the best-quality food, offerings and beverages that we have in the world, as you would well know, Mr Deputy Speaker.

My south-west relies quite heavily on tourism as part of our economy. I am sure that all members here have heard of Margaret River. Margaret River, in the south-west, relies on tourism.

Tourism operators do not need an additional passenger movement charge, to prevent more people from coming to Margaret River and the south-west. If you are uncertain about the tourism potential of the region, please come along to my next South West Sensations Showcase.

According to the South West Development Commission, tourism contributes almost $600 million annually to the gross regional product of the south-west. It involves over 1.4 million overnight stays.

But, on current figures, only seven per cent of those are international tourists and 10 per cent are interstate tourists. Each of these figures needs to be increased.

We are looking at the provision of a larger airport, based at Busselton, capable of receiving direct flights from Sydney and Melbourne.

I see that as essential to realise the greater tourism potential of the south-west. Such tourists would not be hit by increases in the passenger movement charge proposed in this bill, but they would be hit by additional costs from the carbon tax imposed on domestic transport and travel.

Tourist destinations around the eastern seaboard do have direct flight capacity, which contributes enormously to their economies, and the south-west should have that same opportunity.

As we have discussed, the bill before the House today increases the passenger movement charge.

It means that international visitors will pay more. International visitors who come along to the south-west will pay almost $1 million in additional Labor tax. That is what it means to my south-west.

And, as they leave Australia, the extra cost will be $995,200. The extra cost to visitors to the Augusta-Margaret River shire alone will be half a million dollars. People focus on small amounts, on a small change—no, it is not.

It is not, when you look at major tourism areas such as my south-west and the Margaret River region. We do not need one more reason for tourists not to come to Australia, particularly to my part of the world. This is the worst time to be adding costs, like the carbon tax, to the industry.

Tourists going to Busselton will pay a quarter of a million dollars and, at the same time, those going to the Augusta-Margaret River shire will pay half a million dollars extra. Every increase in cost collectively impacts on people’s decisions as to where they decide to spend their travel dollars.

Wherever they are sitting in the world, when they are looking on the internet or at a pamphlet, they ask: ‘Where are we going to go for our holiday? Let’s have a look. Where do we get value for money and where can we get the greatest experiences?’ There are a whole lot of drivers.

They are very careful as to where they decide to spend their travel dollars. Every time the cost of travel to Australia rises, some potential visitors are priced out of the market and other destinations actually look financially more attractive.

The rush of tourists, even Australian tourists, to places such as Bali actually proves this point.

Those numbers actually indicate the pressure that already exists on local tourism operators who are competing for international tourists. That is why every single incremental increase, like this one to the passenger movement charge, actually adds collectively to the reasons why more tourists will choose not to come to Australia and certainly not to my south-west.

We are in a competitive market. Any government action that reduces the cost competitiveness of tourism is an issue for the industry.

In 2014 diesel will become part of the carbon tax cost. So there will be real travel issues for the industry, particularly for those travelling by bus. Of course, the further you travel, the more the compounding effect of that carbon tax will be. We need to strongly encourage, not discourage, any growth in tourists.

In an era of what is really fundamental economic decline in many western nations, it will be Asia that picks up the economic ball and runs with it. Growth in economies such as Asia is based on hard work and productivity.

Therefore, for tourism in Australia to flourish, despite facing the challenge that it does, it needs to engage, as we have previously done, in the Asian marketplace. Western Australia is certainly a key destination.

Another aspect of the Passenger Movement Charge Amendment Bill 2012 is the expenditure of the moneys collected by the Commonwealth under the tax. As we know, it was first introduced in 1994 as the departure tax.

It was put in place to fund Customs, Immigration and quarantine activities. It cost visitors $27.

It was increased in 1998 to fund a tourism campaign—a dedicated purpose—and, again, in 2001 to boost foot-and-mouth screening, something that, as a farmer, I well understand.

The rate rose to $38. But the then newly elected Rudd government pushed that up by $9—or 24 per cent—with no explanation.

‘It is not for foot-and-mouth screening, it is not for quarantine, it is not for any immigration purpose; it is just a revenue raiser, because we want to throw it away on one of our famous wasteful projects.’ It could have been any project. Pick your project to throw it away on.

We know the government’s record on border management is absolutely appalling. It has cut funding to Customs, which is about protecting our borders, to help pay for multibillion dollar blow-outs in its people smuggler subsidy program, masquerading as a Labor border protection policy.

We have seen the backdown, as I said earlier, on the proposed indexation. I do acknowledge the work of the shadow minister in the proposal to amend this legislation and the work of the tourism organisations.

This is really a tax grab and it is there to fund the continuous waste, the mismanagement and the massive budget deficits and debt of this government.