The Australian Federal Government has announced increasing $5 on the ticket price of overseas flights, and the Tourism & Transport Forum Australia (TTF) is not happy about it.
The country’s peak tourism and aviation industry group labelled the recent raise in the Passenger Movement Charge a ‘cash grab’. The tax, built-in to airline tickets of all passengers departing Australia on international flights, will be increased from $55 to $60 from July 1, said by Treasurer Scott Morrison.
The Government had earlier planned imposing a 32.5% tax on backpacker workers. However, they instead increased charge on overseas tickets and imposed 19% tax on visitors on working holiday visas.
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Margy Osmond, the Chief Executive of TTF, praised the government’s decision to reduce the backpacker tax but called the increase of already-high departure tax ‘outrageous’. According to her, the government treats the tourism industry nothing but ‘a cash cow’.
Ms Osmond said that TTF had always opposed any increase in the Passenger Movement Charge and it would continue doing that. The country’s departure tax is already the second highest and travel tax for short-haul flights is the highest in the world.
The Passenger Movement Charge was introduced in 1995 and had been set at $55 since 2012.
Previously, the backpackers used to enjoy $18,000 tax-free income concession. After the new changes, they will have to pay 19% up to $37,000 and regular tax rates after that. Indicating to the reduction of the proposed tax rate for the backpackers, Ms Osmond said that the Government has picked up some of TTF’s suggestions.
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Ms Osmond also appreciated relaxation of some of the employment restrictions and extension of age limit for working holidaymakers. According to her, these changes will bring positive results for the tourism industry.