Get your hand out of my pocket!

Australia has one of the greediest travel taxation regimes in the world.
Australia has one of the greediest travel taxation regimes in the world. Photo: Peter Braig

If there’s one hazard Australian travellers know all about it's pickpockets. Not the street urchins that prey on travellers in Europe and the Third World, but government and big business who target travellers as an easy touch.

The pressure is on the Australian government to get its hand out of travellers’ pockets following its declaration that it stands for lower taxes and less red tape.

Well, we’ll believe it when we see it. Australia has one of the greediest travel taxation regimes in the world.

Australia’s passenger movement charge (PMC) started life in 1978 as a $10 international departure tax designed to recover the cost of government border control services.

It’s now a revenue bonanza slugging more than 30 million passengers leaving Australia $55 a head. In the next few years, it will be scoring $2 billion a year out of travellers’ pockets, far in excess of the cost of government travel and tourism programs, including border control.

In 2012, the Tourism and Transport Forum estimated the tax reduced spending by inbound international visitors by $814 million a year.

The TTF has long called for a halving of the tax to New Zealand to go some way towards removing one of the major disincentives to trans-Tasman travel.

About three years ago, the Australian government abandoned plans being championed by former Jetstar boss Bruce Buchanan to turn the Tasman air routes into domestic journeys.

Buchanan estimated that getting rid of the $55 PMC would cut the starting price for an Australia-NZ air fare to around $130 each way.

The fact that the PMC is lumped on top of the trans-Tasman fare has always been a disadvantage compared with Australian domestic routes of a similar distance (Melbourne and Sydney to Perth and Cairns, for example).

Nearly 90 per cent of Australians favour routes to NZ being treated as domestic journeys, if last week’s online survey is a guide, but it looks as though the government is too addicted to the revenue.

In fact, among all the other policy challenges the new government faces, what Canberra does about the passenger movement charge in the May budget is at the top of the list if the rhetoric can be believed.

Only last week, federal transport minister Warren Truss was telling a Tourism and Transport Taskforce leadership summit he was committed to “removing unnecessary regulatory burdens, taxes and charges”.

That had better start with the PMC, which is one of the most punitive taxes of its kind in the world.

Only Britain has a travel tax that is more ludicrous, the hated Air Passenger Duty. The UK government, in its national budget brought down last week, has begun backtracking, after years of protests by the tourism and airline industries.

For Australians travelling to the UK, the APD will be cut from £94 to £71 per head from April 1, 2015. But for a family of four that is still a monstrous £284 ($A516).

 In Europe only Germany and Austria have gone down the same road of punishing travellers with hefty taxes.

Meanwhile, the Australian airline industry last week celebrated the first anniversary of its decision to raise two fingers at consumers and the federal government by defying rules designed to stop price-gouging on credit-card transactions.

According to figures collated by credit card provider Mastercard, Australian consumers have been hit with $800 million in credit card surcharges over the past 12 months. And, it says, the main offenders are airlines, taxis, major hotels and utilities companies.

A year ago, the Reserve Bank announced new rules to stop price-gouging – but there is no government agency in charge of enforcing the rules so they’ve been ignored.

"Surcharging should be reduced to a reasonable level, which RBA data shows on average to be less than 1 per cent for merchants processing transactions through Visa and MasterCard," consumer group Choice told the ABC.

A Choice report earlier this year found consumers flying with Qantas from Sydney to Melbourne could still pay 523 per cent more than the average merchant service fee, similar to the 568 per cent they were paying in March 2013.

Once again, the focus is on the federal government, which has urged consumer agencies to actively monitor credit card provider practices for hidden fees and charges, and to develop protocols to address consumer concerns.

What are your pet hates among the taxes and charges you face as a traveller? Will the reduction in the APD encourage you to visit the UK? Would you visit NZ if the ticket price was cheaper?

 

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