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Departure Tax Amendment Bill 1991



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House: House of Representatives

Portfolio: Transport and Communications

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Purpose

To increase the rate of departure tax from $10 to $20.

Background

The departure tax was introduced for most adults leaving Australia in 1978. The original rate of the tax was $10. This was increased to $20 in 1981 and subsequently reduced to $10 in 1988.

In the Second Reading speech to this Bill, the proposal to increase the departure tax was linked with the need to increase tourism promotion and a $20 million promotion package announced in December 1990. The mid-1980s saw a substantial increase in the number of tourists to Australia, with an annual increase of overseas visitors of approximately 25% in the three years to 1988. A record number of overseas tourists, 2.25 million, arrived in 1988, the year of the Bicentenary and Expo. The number of tourists arriving remained strong in 1989 until the interruption of domestic air services in the last part of that year. This had a large impact on international tourism as the size of Australia makes air travel very popular, particularly amongst short term visitors. The result for 1989 was a 8% decline in overseas visitors when compared to 1988.

In an attempt to counter the negative impact of the airline dispute, a $31.25 million package was implemented early in 1990 to help restore confidence in the industry and encourage both domestic and international tourists. There was a recovery in early 1990, with a increase of 12% over the period January to June 1990, but the latter half of the year saw a decline in the increase in visitors. Overall, the number of visitors in 1990 increased by 6% over 1989 to 2 214 900. This is 34 000 less than in 1988. The majority of the growth came from Japan, with arrivals from that country increasing 37% over 1989.

During 1989-90, tourism contributed approximately 5.4% to Gross Domestic Product and accounted for approximately 450 000 jobs. About 20 000 jobs were created during the year and the industry contributed $6.5 billion in foreign exchange earnings.

It is estimated in the explanatory memorandum that this will raise $35 million in 1991-92 and $37 million in subsequent years.

Main Provisions

The rate of departure tax will be increased from $10 to $20 by clause 3. The amendment will apply to those leaving on or after 1 August 1991 (clause 4).

Bills Digest Service

Parliamentary Research Service

For further information, if required, contact the Economics and Commerce Group on 06 2772460.

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1991

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1991.