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Wednesday, 4 June 2008
Page: 4409

Mr BUTLER (11:21 AM) —I rise to support the Passenger Movement Charge Amendment Bill 2008 and to say a couple of things about it as a fiscal measure and also about the state of the tourism industry and some of the more shrill comments made by the member for Sturt. I have also heard the member for Moncrieff talk about tourism taxes. As always, the historical lesson from the member for Sturt, given with the eye to detail of a University of Maryland professor, was very helpful but it seriously understated, first of all, the lack of broad perspective from the previous government around tourism generally, as well as their increases in the passenger movement charge over the course of their government, leading up to the very significant changes to aviation security that flowed from the September 11 disaster.

It is important that someone on this side of the House, other than the minister, of course, gets up and supports this as a responsible fiscal measure, as one that would go some way—and only some way—to recovering many of the costs that flowed from September 11 and that are now imposed on the government, and says something about the broader tourism policy of this government. The purpose of the bill is to amend the act to increase the PMC by $9 to $47 with effect from 1 July 2008. That is an increase in the order of 23 per cent, and I will say a couple of things about that later. It will go some way to funding national aviation security initiatives, which are the responsibility of the Australian government. The year 2001 was the last time that the PMC was increased and also the time at which aviation security measures started to become significantly tightened in the wake of September 11. It is important to note that, since 2001, the Australian government has spent about $1.2 billion implementing a significant number of national aviation security measures. Up until the 2011-12 financial year, that sum is expected to be in the order of $2.2 billion. This increase over the next four years amounts to somewhere in the order of $459 million.

Broadly speaking, this increase is in line with changes in the consumer price index, the CPI, since 2001, which was the last time it was increased. The CPI to the March quarter of 2008 moved by about 21.2 per cent. This increase, which takes effect on 1 July 2008, is in the order of 23 per cent. Acknowledging that the CPI is likely to have moved by maybe one per cent by then, the increase proposed by the government is simply no more than a matter of indexation. Existing exemptions from the PMC will remain in place, such as those for passengers aged under 12 years of age. It is also important to note that there will be put in place measures to ensure that this is not retrospective. That is to say that any tickets sold before 1 July 2008, even if they are for flights that take place after 1 July 2008, will be exempt from the increase in the PMC. It is also important to note that this measure, in addition to being a measure that really only reflects the CPI changes since 2001, is also a percentage increase that pales in comparison to the percentage increases made by the last government, which the member for Sturt was honest enough to point out to the House. Those increases were in the order of 37 per cent, all prior to the significant addition to the security burden that flowed from September 11.

Those changes in aviation security, particularly in relation to international flights since September 11, are well known, but they are worth addressing briefly here. Aviation, as we unfortunately know, is and has been for some time a particularly attractive target for terrorists. This was the case before September 11, with disasters such as Lockerbie and more, but was particularly brought home with the tragedy and disaster of September 11 and, since then, with a number of foiled attempts by terrorists to inflict further damage to aviation. Those changes affect all aviation, including domestic and, increasingly, regional aviation security, but they are particularly important in the area of international aviation. Specific security requirements for international flights can be set by any country to which an aircraft is flying. We know particularly that the United States has tightened their security measures—that is, the security measures that apply to flights at the point of departure that end up at the United States.

The International Civil Aviation Organisation may also impose new security measures that bind Australia. A good example of those is measures relating to liquids that were put in place by that organisation in 2006 and that came into effect in Australia in March 2007. The increases in passenger screening requirements are probably the best known and most in-your-face, if you like, change to the security regime, but there have also been very significant changes to checked baggage screening since 2001. Since 2004, the screening of 100 per cent of checked baggage has been a requirement of all international flights leaving Australia. This increase goes some way towards the cost recovery for that. More recently, as I indicated, new measures have been in place since March 2007 for all carry-on baggage on international flights. They flowed from a terrorism attempt to bring down planes crossing the Atlantic by use of improvised bombs made from liquids taken on board. From now on, each container of liquids, aerosols or gels in your carry-on baggage on an international flight must be 100 millilitres or 100 grams, as the case may be, or less. All of the containers that carry those materials must be sealed in a transparent one-litre plastic bag. Those of us who have taken international flights since that time know what sort of security burden that has placed on the airports, which has been partly funded by the government. Less obvious, perhaps, to passengers have been measures flowing from the Wheeler review in 2005 to strengthen our air cargo security arrangements. All of these things have happened since the PMC was last set at the rate of $38 per passenger and have added very significant additional costs to the Australian government.

Members will be aware that aviation security is part of the general aviation policy review being overseen by the Minister for Infrastructure, Transport, Regional Development and Local Government. Submissions to the review close at the end of June, but we can be reasonably sure that, flowing from that review, measures will not be relaxed. Measures will remain in place in accordance with our international obligations at the very least.

I would like to briefly address the remarks made by the member for Sturt and outside this place by the member for Moncrieff about the impact this might have on tourism. This government does not raise taxes lightly, particularly on an industry like tourism, which finds itself in a very challenging environment, especially at an international level. The competition facing Australian tourism now is fierce, particularly with the proliferation of low-cost airlines and a range of other commercial arrangements that make places like Macau, China, Hong Kong and Vietnam very attractive destinations for tourists in our region. Long-haul destinations like Australia are hit hard by increases in fuel prices. Australia is also particularly susceptible to people’s justifiable concerns over the impact on climate change of taking long-haul plane flights. Finally, but certainly not least importantly, the strong Australian dollar is placing very serious pressure on the Australian tourism industry.

But those challenges are much bigger than an increase in the PMC that does little more than keep the PMC in line with indexation. That is why the minister for tourism has issued the national tourism strategy review. This is the first time in many years that the Australian government as the leader in this area has called the industry to work with it and state tourism organisations and state ministers to find some real and long-term strategies to deal with the challenges that I outlined—to come up with a coherent and consistent marketing strategy rather than the marketing plans that changed every year or two under the last government. Compare that with the focused marketing plan that New Zealand has had in place for probably nine years now. This government has a serious plan to deal with skill shortages. When we talk to tourism operators about challenges facing tourism, there is none more significant than the lack of skilled workers to provide services to tourists coming to our country. Lastly, there is product development.

This is a government that is serious about the future of tourism. This is a government that is serious about a fiscally responsible budget that looks at changes to charges like the PMC in line with indexation to only partly recover the additional costs that have been placed on the government because of additional aviation security requirements flowing from September 11. I commend the bill to the House.