Travellers departing Australia will face a new tax increase following last night's federal budget announcement, making overseas holidays even more costly. The hike will also raise return travel expenses for tourists visiting Australia.
The Tourism and Transport Forum has accused the federal government of blindsiding the country's travel and tourism industry with the decision to raise the passenger movement charge (PMC) in the budget. The PMC is a fee levied on anyone leaving Australia by plane or cruise ship, typically included in the ticket price.
TTF CEO Margy Osmond condemned the increase from $70 to $80 per person as a major blow to the tourism sector. "This is an absolute shocker for the tourism industry," Osmond said. "We're outraged the government has decided to make travel even more expensive, when operators are already under enormous pressure from the ongoing fuel crisis and surging operating costs."
Osmond noted that the government frequently talks about supporting tourism and growing visitation, yet the budget makes Australia more expensive to visit and for Australians to travel. She highlighted that a family of four would soon need to pay $320 just in tax as part of their airfare from Australia. "Given how much uncertainty the industry is already facing, this could really be the straw that breaks the camel's back," she added.
The PMC increase, effective from January 1, 2027, has caused deep frustration among tourism industry bodies, who claim they were not consulted before the announcement. The last increase occurred in 2024 when the fee rose from $60, which had been set in 2017.
Osmond said the six-month transition period shows the government recognises the impact of the increase, but there is no indication the extra revenue will benefit the industry. "It's inconceivable that none of the extra revenue that's going to be collected from this tax hike looks set to fund the urgent border modernisation we have been calling for," she said. "It's particularly disappointing when we've worked so constructively with government over the past 12 months to 18 months on developing a seamless border, which would give every Australian a better, safer, more secure experience."
Osmond is calling for the new tax rate to be frozen for at least four years, arguing that the PMC has become a revenue grab for Treasury with little evidence that billions collected from travellers are reinvested into tourism, aviation, or border infrastructure. "Right now, we have airports around the country that are planning their own improvements and they need a signal in terms of how they spend their money," she said. "It is urgent that we escalate the really solid work done over the last year by sections of the government with the industry and deliver a modern seamless border that so many other countries take for granted."
