Sneaky ‘travel tax’ hidden in budget 2023

Aussies wanting to take to the skies may notice their flights will cost more very soon.

A composite image of travellers lining up in an airport and Australian money.
Aussies looking to travel may be hit with higher costs. (Source: Getty / AAP)

If you’re planning a holiday anytime soon, you may be hit with more expensive flights, thanks to a hidden tax hike in the federal budget.

Treasurer Jim Chalmers’ budget included a decision to lift what is known as the Passenger Movement Charge (PMC) by $10 - to $70 - from July 2024.

The decision, described as a “tourism tax” has been slammed by travel industry experts who say it will slow the recovery of the industry after it was decimated by the pandemic.

“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,” Tourism and Transport Forum CEO Margy 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.”

The tax applies to every person leaving the country and the money generated goes towards biosecurity measures to protect Australia's natural environment and core industries.

How will this affect flights?

The move will cause Aussies to travel less and “make it harder for Australian families to stay connected”, Australian Federation of Travel Agents CEO Dean Long said.

“Now is not the time for additional taxes. Today’s decision to increase the PMC by 16 per cent is extremely disappointing,” Long said.

“We know that the PMC does reduce air capacity to Australia and, with supply of air seats still tracking 30 per cent to pre-COVID levels, this will slow down our recovery.

“In the three years prior to the pandemic, the PMC collected on average $811 million more than needed to fund the biosecurity requirements to keep the community and agriculture sector pest free. The government is now demanding an additional $200 million for next year, which is unwarranted and not appropriate, especially in the current environment.”

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