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Wednesday, 20 June 2012
Page: 7297


Mr BALDWIN (Paterson) (17:23): I rise this afternoon to speak on the Passenger Movement Charge Amendment Bill 2012. The coalition would like to have been in a position to oppose the increase in its entirety; however, faced with a government that is borrowing over $1 million every single day and is likely to bequeath a national debt expected to dwarf the $96 billion debt the ALP previously left the Howard government, the coalition will face circumstances equivalent to a financial hangover after a spending party.

The totality of Labor's economic mismanagement will still, therefore, have to be paid for. The coalition is determined not to have the financial black holes in the national accounts that this government so regularly and cavalierly delivers. If returned to government, the coalition will look to do things differently, by looking at all measures to stimulate and grow the tourism sector, rather than simply looking to use the industry as a cash cow to be plundered.

Australia is not the only country to have an international departure tax. A number of countries levy some sort of air travel tax on passenger departures or arrivals. What is striking, though, is the rate at which we are levied. The decision to raise the PMC by $8 from $47 takes Australia's departure tax to $55 per passenger. This contrasts with the Australian dollar equivalents for travel outside of the European Union of $10 in France and $34 in Germany. Outside of the EU, New Zealand has a $19 charge and the US has a $14 arrival tax.

In Australia the $27 passenger movement charge was introduced in 1994-95 to replace the departure tax. It was a measure to cover the costs of Customs, immigration and quarantine, estimated at $19 per passenger plus funding to cover the $8 cost of processing short-term visas. Two years after coming to office, the coalition, in an effort to spurt tourism growth by providing resources to cover the costs of Tourism Australia's predecessor and its See Australia campaign, increased the charge by a further $3 in 1998-99 to $30. It was not raised again until 2001-02, when the airports required additional screening due to foot-and-mouth disease, and it was increased to $38.

Under the Howard government the PMC saw only moderate increases, and only when there was a specific and valid reason to do so. Between 1996 and 2007, what to many Australians must now appear to be a golden age, the PMC rose by $11, from $27 to $38—a rise of 35 per cent over 11 years. By contrast, in just five years this government has increased the PMC by $17, from $38 to $55—a rise of almost 45 per cent, or 4.5 times the increase in the annual CPI during this period. This year alone it represents a 17 per cent annual increase, compared to an expected CPI of only 3.25 per cent.

Raising the PMC is part of Labor's need to feed its insatiable tax addiction, an addiction that forces it to cast around for reasons to justify it. They had to at least attempt to make a justification, given that on 2 March 2012 in Cairns at the Qantas national tourism awards the minister, Martin Ferguson, was participating in the National Tourism Alliance full board meeting. At the same time I was across town launching the www.staycation.org.au campaign at a press conference at the Cairns Marina, aiming to address Australia's ballooning tourism deficit.

We have gone from a surplus of $3.5 billion in 2001 to a loss today of $8.7 billion through Australians holidaying overseas. The Minister for Resources and Energy and Minister for Tourism was, as confirmed, in the National Tourism Alliance's communique, saying that there would be no increase in the passenger movement charge. In a later discussion on passenger facilitation, he said that he had heard no proposal to raise the PMC in the upcoming budget. Those statements are in this communique and I seek leave to table it.

Leave not granted.

Mr BALDWIN: As usual, this Labor government want to hide from the facts. The communique will be available to anyone who calls my office and wants a copy of it. How can an industry have confidence when you are telling them one thing before a budget and doing something different afterwards? Minister, you went to the tourism industry and you told them that there would be no increases in the PMC and then, after the budget, they find they are getting whacked with a 17 per cent increase—plus the CPI.

We have subsequently learned that, while we were all up in North Queensland, back in Sydney at the University of New South Wales they were modelling a potential 20 per cent increase in the PMC. This research was commissioned by none other than Tourism Research Australia, a part of Minister Ferguson's department. So while he was telling tourism leaders, 'I've not heard of any potential increases to the PMC in the budget,' he ordered his department to prepare the defence for what Labor would announce two months later.

The government might wonder why there is such animosity out there in the electorate. It is because they have a habit of saying one thing and doing something else shortly after. Who can forget 'There will be no carbon tax under a government I lead' before the election? Contrast that with the python squeeze that is waiting for them in less than a fortnight from today. I want to pay tribute to my colleague Senator Humphries, who obtained these documents and revealed Labor's duplicity.

The government knows it faces a trust issue within the electorate. That is why it tried, in relation to the rise in the PMC, what I call the 'disco ball approach'. You can see it now: all the ALP spin doctors sitting around in a room not far from here, saying, 'What can we do? How can we distract the industry? We need something bright and shiny—something that glitters.' One of them shouts, 'I know! What about an Asian marketing fund? What an idea. No-one else would have thought of that. We could really sell that one.' The rise in the passenger movement charge from $47 to $55 is estimated to raise an additional $500 million over the forward estimates, but just 10 per cent of that will be given back in the form of this bright, new, shiny Asian marketing fund. Not content with milking the tourism industry for $500 million, this government thought that it would try another resource strike at the industry by seeking to index the passenger movement charge to CPI, giving the government another $156 million over the forward estimates. In 2007, the passenger movement charge raised $420 million in revenue to cover administration costs of only $231 million; this year the passenger movement charge raised $656 million in revenue to cover administration costs of only $243 million. If we take this out to 2015-16, the government's passenger movement charge—or should we call it the government's tax on tourism?—will, according to Treasury figures, raise $1.037 billion, yet the administration costs are expected to be only $239 million. If you are looking for definite proof that the government sees the tourism industry as nothing more than a cash cow, then this is the definite proof. There are $800 million in surplus costs and expenses going directly into the bottom line.

When this government came to power, the budget for Tourism Australia—the government body responsible for promoting Australia to international visitors and encouraging Australians to travel domestically—was $136,269,000. This year the proposed budget is $130,178,000, and in the forward estimates it will still only be $134,556,000 in 2015-16. This is the lowest level of funding ever for Tourism Australia—the lowest funding ever for an industry which, combined with hospitality, provides employment for almost 1,000,000 Australians. In fact, in real terms, the money lost between 2007 and 2012 is $18,949,000—16 per cent. Projected through the forward estimates, it is $22,943,000—19 per cent. This Gillard government has given the bright and shiny new Asian marketing fund with one hand and taken away from Tourism Australia's budget bottom line with the other.

The tourism industry has had enough. The Australian Accommodation Association called the PMC 'a virtual tax on tourism' which has 'a direct negative impact on visitor numbers which in turn has a detrimental effect on room occupancy and revenue per available room in tourism accommodation businesses.' The TTF was joined by AFTA and several other travel and tourism industry organisations whose advertisement in the Daily Telegraph and the Australian Financial Review stated that the taxes and increases being placed on the travel and tourism industry were 'unwelcome and overwhelming'. No-one was more surprised that the tourism industry would stand up for itself than the ALP, who saw it is a soft touch.

Surprisingly, in the face of these full-page ads and a direct marketing campaign which showed that the industry was fed up and not going to take it anymore, Labor wheeled out an unprepared Prime Minister who was not across her brief and who had to pick up the mess left behind for her by her tourism minister. In trying to defend the increases to the PMC, the Prime Minister tried and failed to argue that the cash grab was actually designed as a positive step to help the tourism industry. That is great—help tourism by taxing it more! Prime Minister Gillard tried to imply that the PMC only affects outbound Australians holidaying overseas, but the truth is that this $55 tax slug is paid by Aussies at the start of their holiday and by our international visitors at the end of theirs. The Prime Minister said that she thought that raising the PMC was a good measure to discourage Australians from travelling overseas rather than holidaying at home. Either she made this up on the spot or, when the matter came up for cabinet discussion prior to the budget, neither she nor the Treasurer nor the immigration minister—let alone the tourism minister—understood how departure tax works.

For now, it appears that the government has succumbed to the pressure and resiled from going ahead with indexing the PMC to the CPI. However, even last night, when his own colleagues had seen the writing on the wall, Minister Ferguson was still defending the indefensible by telling the tourism industry that he supported indexation despite the rest of the government acknowledging that they had gone one step too far. Indexation of the PMC would have lead to an ongoing and ever-increasing significant impost rise on the tourism industry every year. It would have been the only tax to do so, and this would have occurred by the stroke of a pen without any future parliamentary scrutiny and regardless of the prevailing global economic conditions.

Speaking of prevailing global conditions, these are some tough times for this tourism industry, and, as I have said in many tourism forums, the industry has been doing it tough in recent years. This is due to anaemic growth in many of our largest markets for inbound visitors, exacerbated by our strong dollar; competition from new and highly competitive destinations in our region; the impact of natural disasters such as Cyclone Yasi; and short-sighted, ill-conceived and economically counterproductive policies.

So what has Labor been doing to help the industry? The record is not exactly flash. First there is the little matter of the tax that dare not speak its name—or, as I referred to it earlier, 'Labor's python squeeze'. The government did not even consider the tourism sector serious enough to undertake modelling of what the impacts would be. So, while it was shovelling out the money to the steel industry and the car industry, amongst others, all the tourism industry had to go on was private modelling undertaken by TTF which forecast that 6,400 jobs would go and that there would be a cut of 10 per cent in industry profits. With this PMC rise, the TTF is now stating that job losses could be as high as 10,000—and these would be predominantly in regional and rural Australia—yet the TTF received not one cent in targeted, tourism industry-specific assistance.

Now the government has announced that some 90 Customs staff will lose their jobs in addition to the 70 posts already cut this year. This has led to longer queues at Customs and an average wait time of 24 minutes. The government has also increased the visa label charge by $10 and passed on the $118.1 million in costs for AFP security at airports. These costs in turn will be passed on to tourists and international visitors by the airlines. People travelling to Australia will now face all these additional imposts combined with a carbon tax when they shop. When one adds to this the cuts to Customs, Labor's marketing theme for our nation should be—to borrow a line—'Welcome to Australia, where you will pay more and where you will wait longer!'

The thing about this government is that, if you watch it for long enough, you will find that patterns begin to develop. Just as it gave the tourism sector the glittering Asian Marketing Fund and then reduced funding in real terms for Tourism Australia, the government decided to repeat this sleight of hand with the SmartGate passenger facilitation system which helps eligible travellers to use electronic information in ePassports and face recognition technology to self-process through Customs and Immigration.

First, it gave $7 million to improve the SmartGate passenger facilitation. Then it made cuts of $10 million in the overall Customs budget in addition to staff cuts. Surely the government should have waited for the high failure rate to be reduced before making anticipated compensatory staff cuts? As the backbone of our tourism industry are thousands of small business operators. Tourism expenditure is mostly a discretionary-spending item and often is in a price-point sensitive market. This budget has resulted in making it more expensive to visit Australia through 'cash grab' measures such as the increases to the PMC. I condemn this government for taxing this industry beyond its capacity and it will stand condemned by the industry.