I get very nervous when think tanks start telling governments what to do, especially when it comes to travel. That’s because, in the last decade or so, Australian governments of both persuasions have looked upon travellers as ATMs they can use for extra cash whenever the whim takes hold.
It started in the 1990s when the Howard government got an ideological bee in its bonnet about the need to privatise airports – that is to turn publicly-owned monopolies into private monopolies, which has resulted in increases of up to 900 per cent in the fees that airports charge airlines, which the airlines have to recover from consumers, not to mention the price-gouging bonanza that airport parking has become.
It wasn’t as if the former Federal Airports Corporation was a basket case: it was making annual operating profit margins of around 45 per cent -- almost equal to the big banks.
The fact that the secretary of the Department of Prime Minister and Cabinet left his job to become chief executive, then chairman of Sydney Airport Corporation (SACL) just put the final icing on the insult.
Pricing controls on airport monopolies have since been removed but, as a sop to consumers, the Australian Competition and Consumer Commission “monitors” the airports with annual reports that have generally been highly critical.
But that doesn’t include the direct revenue to government through travel taxes, such as the Passenger Movement Charge of $55 per head (increased from $48 last year), which all local and overseas passengers must pay when they leave the country.
Only the UK has a travel tax that’s higher: its hated Air Passenger Duty is as high as £92 ($A138) for long-haul passengers from places as far away as Australia, but for travel to Europe it is “only” £13 ($A19.50). From Australia, you pay the PMC whether you’re flying to London or Christchurch.
“The surge in the number of Australians travelling overseas has also been accompanied by a surge in government revenues thanks to passport fees and the passenger movement charge,” the acting chief executive of the Tourism and Transport Forum, Trent Zimmerman, said last week.
“Passenger movement charge (PMC) revenue from Australians travelling overseas has trebled over the last ten years, from around $125 million in 2002 to $400 million last year.
“Add in international visitors to Australia, and the PMC will collect $794 million in the current financial year, increasing by 30 per cent to over $1 billion in 2015-16."
On top of that, Australian passports are probably the most expensive in the world. Certainly comparable countries charge nothing like the fee demanded by Australia.
The going rate is $238 -- up from $144 in 2002, according to the TTF. At present value, that means there is something north of $2.5 billion in passport fees sloshing around the system. More likely it’s money already spent on something that has nothing to do with travel.
Nevertheless, the Lowy Institute feels the need to justify its existence with a proposal for a new impost on travellers.
“The demands on Australia’s consular service are growing,” says Lowy Institute research fellow Alex Oliver in a new paper. “Huge numbers of Australians are travelling overseas every year, and the expectations of what the Australian government can or should do for them when they find themselves in distress are rising, driven by media and public pressure and, on occasion, by political expediency.
“This comes at a time when the Department of Foreign Affairs and Trade is under strain from decades of under-resourcing and political neglect. As a result, DFAT struggles to balance consular work with other key priorities.”
But, says Oliver, the billions travellers have already contributed and continue to contribute are not enough.
“Government must find a substantial, permanent and dedicated source of additional funding to properly support DFAT’s consular work, allowing the department to balance its priorities,” she says.
“At a minimum, government should allow DFAT to retain the money it currently earns from notarial services to supplement consular funding. But the government should also impose a consular fee on the cost of a passport or airfare.”
Throw into the mix a Labor government that’s desperate to raise cash to pay for its spending programs and a federal budget just a month away and you have a perfect storm for travellers. After all, we don’t have a noisy lobby which can threaten politicians with loss of votes or worse.
And, if government changes hands this year as expected, the new administration will be looking for new charges to roll back the debt of the old administration.
Travellers are regarded by governments as the fabulously wealthy who can afford to pay whatever is demanded. The idea of air travel as a flying bus service has never taken hold in Australia as it has in America. It is still a frolic for the elite; even many Traveller’s Check readers look down their noses at “bogans” using cheap airfares.
Are you prepared to pay a new consular fee for overseas travel? Should the government make more effort to direct travel-related taxes to services for travellers? Do you think the current fees travellers face (for passports, air taxes etc,) are too high? Post your comments below.