Customs and Border Protection confirmed last week that 90%, or $550 million, raised by the increased charge, will go into consolidated revenue, boosting government coffers, rather than to frontline border services at airports.
Customs and Border Protection confirmed last week that 90%, or $550 million, raised by the increased charge, will go into consolidated revenue, boosting government coffers, rather than to frontline border services at airports. James Costello

Tax increases will cost jobs: tourism

TOURISM jobs in regional areas will go as a result of two tax increases that will hit the industry hard, Tourism and Transport Forum chief executive John Lee warned on Tuesday.

The government is likely to pass an amendment to align a tax on international travellers with the consumer price index, as well as doubling withholding tax on managed investment trusts - which could affect hotel development in regional areas.

Budget documents show the proposed increase of to $55 each to the passenger movement charge will bring in some $610 million in the 2012-13 fiscal year.

But Customs and Border Protection confirmed last week that 90%, or $550 million, raised by the increased charge, will go into consolidated revenue, boosting government coffers, rather than to frontline border services at airports.

The increase has been analysed by two parliamentary committees, and despite two dissenting reports from the coalition, the changes are likely to be passed this week.

Mr Lee, who presented to both committees, said the increase would result in regional job losses, particularly in Queensland and New South Wales in areas catering to international visitors.

He said that before the 2012-13 budget was released, the Federal Government had promised the tourism industry it would not increase the tax, but that government was now reliant on it to prop up its bottom line.

Mr Lee said the indexation of the tax was touted as giving certainty to industry, but the only certainty he was given was that the tax would continue to increase every year.

The government has previously announced that $61 million of the revenue from the increase will go to promote Australian tourism to Asia, but the remaining $550 million will go to consolidated revenue.

The Coalition also said it would vote down the increase, but without the support of crossbenchers, the increase is likely to be approved.

Coalition tourism spokesman Bob Baldwin said he also expected it to have an uneven effect in regional areas, but did not commit to ensuring the tax was not increased if it gained government.

Response was sought from Federal Tourism Minister Martin Ferguson, but he was unavailable for comment.



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