Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Hansard source

The Passenger Movement Charge Amendment Bill 2008 is another in the long line of tax rises forced upon the Australian people by the high-taxing Rudd government. Whilst the budget detailed tax cuts on some occasions, the reality is it will collect more revenue from Australian taxpayers than any other budget in our history. The budget is indeed a directionless mess, with some things going up and other things going down. What we are actually seeing, though, as a result of the new taxes that are being implemented, or the tax rises that are associated with this budget, is a strategy that seems to be working against what the government has been saying in its rhetoric about reducing the pressure on working families. In fact, the policies that the government has been rolling out are having the opposite effect. That is right: the Rudd government is about applying upward pressure on prices. It is doing so by slugging hardworking Australians with yet more taxes and charges.

Let me be clear about this—and I place this in the context of the passenger movement charge and its overall place in the budget. This new tax is part of the general approach of the Rudd government towards tax. The passenger movement charge cannot be considered in isolation but is part of the framework. It is part of a high-tax structure that is being built by the Rudd government regardless of its commitment to people in Australia who are affected by the high cost of living.

What is actually on the Rudd government’s tax agenda? It is obvious that there are to be more taxes. Indeed, the total increase in the tax grab in the recent budget is $2.9 billion per year, or $14.7 billion from the pockets of Australians from 2007-08 to 2011-12. What are these new taxes? There are several, such as the passenger movement charge that we are discussing today. There is also an increase in the tax on premixed drinks—this so called alcopop tax that is expected to raise $3.1 billion from the pockets of mainly young Australians over the next four years. We have been talking in this debate about the impact on the tourism industry. In fact, this tax increase on alcopops will also have an effect on visitors coming to Australia and the costs they incur. In defence of the tax, the government has been running an argument that it is about dealing with the problem of teenage binge drinking, but we all know now that that is nonsense. The government’s own forward estimates for this tax demonstrated that it is not expected to reduce teenage binge drinking at all. It is actually expected to increase government revenue, and that is what the tax is about.

Indeed, such an argument that it is a socially responsible tax is counterintuitive—it is not socially responsible; it will simply encourage drinkers to purchase spirits instead, and the early reports have demonstrated that that is precisely what is happening. Therefore it is quite possible that this tax will in fact make teenage drinking worse. My point is that this is a tax that has been presented falsely to the Australian people.

What about other taxes? The passenger movement charge is an attack by the Rudd government on Australia’s tourist industry, but that is not the only extra tax on movements that must be borne by the Australian people. That tax will apply to businesses and to a whole range of other Australian people but, where that tax is applied to a single sector, there is another tax that applies all over the place. That tax is the road user charge. This pernicious tax is about increasing the cost of diesel fuel for trucks and buses by increasing the effective diesel fuel excise from 19.63c per litre to 21c per litre based on the concept of a road user charge. Now it is going to be indexed on an annual road cost adjustment formula. In other words, the indexation of fuel excise is back.

The indexation of fuel excise, people may recall, was introduced by the Keating government and abolished by the Howard government in 2001. After a seven-year absence, it is back and it is pegged to a formula that will lock in a tax take that will rise faster than the consumer price index. Who will pay this tax? The answer, of course, is everyone. Trucks, members may recall, carry over 75 per cent of Australia’s domestic freight. That means that those who drive the nation’s 365,000 trucks, many of whom are struggling small business operators, will pay. So much for defending working families.

But Australia will also pay as a nation. As I said earlier, the passenger movement charge applies mainly to one sector of the Australian economy, but it will have flow-on implications. The road user charge applies everywhere since the increased cost it causes will be passed on to consumers and raise prices for everyone—from cornflakes to building materials, from medicines to school shoes; the everyday items that families need. This tax is therefore about increasing inflation. It is about making the cost of living for all Australians so much higher.

In spite of what this tax means, the Rudd government persists with it, introducing on the sly the required regulation under the Fuel Tax Act 2006. The government tabled this regulation in this place on 13 March this year to implement the tax from 1 January 2009. Fortunately for all Australians who purchase items from shops that carry goods carried by trucks, which is just about all of them, the opposition blocked this nasty inflationary tax in the other place on 14 May. But the Prime Minister has said in question time that he remains determined to persist with this tax that makes the task of average Australians to meet the costs of living that much harder.

As I mentioned, the passenger movement charge is a sector-specific tax, but the Rudd government is pursuing a tax agenda that applies everywhere. The road user charge will increase the price of virtually every item in the shops. What is particularly extraordinary is that the government is imposing this tax at a time when all Australians are struggling with higher petrol prices. We have already seen that the government’s ineffective response to the problem of rising petrol prices is basically built around Fuelwatch. The Fuelwatch scheme imposes price fixing and further regulation on small business—again, giving lie to the government’s claim that it is going to put a special effort into tearing down the red tape affecting small business. In reality, they are increasing it. The scheme, which will remove spot discounting, could actually increase the price of fuel for many Australian motorists. This is a double whammy on fuel prices in this country: increases in diesel fuel prices and increases in petrol prices.

This is already having a significant impact on the tourism industry. It is more difficult and costly for people to travel. They are concerned about the cost of fuel. In areas such as my own, where a large proportion of the tourists come by road, there is already an impact being felt in the marketplace. It is gross hypocrisy on the part of the Rudd government to be talking about encouraging industry while on the other hand increasing taxes. That is what the passenger movement charge is all about. This tax is part of an overall attack by the Rudd government on the business sector, on business travel and on the Australian economy, particularly through the tourist industry.

This crucial industry generates approximately $24 billion in export income for the national economy and provides employment for nearly half a million Australians. It is a service sector industry that is currently struggling, with flatlining visitor numbers as a result of the high Australian dollar and skyrocketing fuel prices. It has become less competitive. Australia is a remote location for international tourists. They have to travel a long way. For that reason, the cost of fuel has a bigger impact on flights to countries like Australia than it does on flights in Europe where most of the travel is over short distances. It also has an effect within the country, because the cost of getting around Australia as a large nation is high. That is making Australia a much less attractive market for international tourists.

This is just the wrong time to increase the passenger movement charge, to put a new tax on people coming to Australia and travelling in and out of our country. At a time when the tourist industry is facing particular difficulties, this is just the wrong time to be putting up a tax on all of those people who come to Australia. The latest budget initiative will belt the tourism industry with a suite of new taxes. The passenger movement charge is only one of them. It is estimated that the impact of the budget tax measures on the tourism industry alone will be $1 billion. At the same time, the government is cutting industry support. It is cutting $6 million out of the tourism corporation at a time when it needs more money to be able to promote Australia in more difficult economic circumstances.

As we heard from the previous speaker, the government’s only response to the additional cost burden that they are putting on the industry is another review. It is a review into tourism strategies this time. This is a classic excuse from a government that do not have a clue what to do about almost every policy issue. Now 100, maybe 200, reviews have been commissioned to give them some ideas. We had 1,000 experts in town to try and give us ideas. We have had endless committees of inquiry and review. One would have thought after 11½ years in opposition that, when the Labor Party came to government, they would have an agenda ready to go and would know what their plan was for industries like tourism. But in reality they clearly did not have a clue. They are now out there starting to develop policies, but it is far too late in the process and, in the interim, the industry is being hit with a whole range of additional taxes.

I wonder why the Rudd government has acted this way. Doesn’t it realise that the tourism sector is characterised by a large number of small businesses and is a key provider of jobs, especially in regional Australia? In my electorate of Wide Bay, for example, there are around 3,000 people employed in tourism. But small businesses in regional Australian are constituencies that the Rudd government does not care about.

The passenger movement charge is only one tax on the tourist industry that will make life difficult. Others, like the luxury car tax, will also have an impact on tourism. Many of the vehicles that are used extensively in the industry will be subject to the luxury car tax. For instance, Toyota LandCruisers are workhorses of the tourism industry in regional Australia. Some of these vehicles have eight seats and are not exempt from the luxury car tax. This component of the tourism industry—small group tourism—which deals with customers who demand high-quality vehicles, is the one area of regional tourism that is growing right now. These operators must operate vehicles that are roomy, modern and fitted with current safety features. These vehicles need to be replaced regularly. There are also many hire car operators that run vehicles at this end of the market. The luxury car tax is another one of the suite of new taxes that has been introduced by this government that is going to significantly affect tourism.

The passenger movement charge, as members may recall, was lifted in the high-taxing budget from $38 to $47 on everyone entering or leaving Australia. It will apply from 1 July this year and is a tax slug that will raise nearly half a billion dollars over the next four years. The tax was poorly explained in the budget as a measure to offset the cost of aviation security measures that the government claims have not been cost recovered to date. It is also meant to recover the cost of processing international passengers at international airports and maritime ports as well as the cost of issuing short-term visas overseas.

What is curious is the total failure of this high-taxing government to provide any detail of the costs of the measures the passenger movement charge is supposed to cover. This is all the more concerning since the passenger movement charge, according to the testimony of the then Department of Finance and Administration to the Senate Legal and Constitutional Committee on 28 May 2001, is a tax and not purely a cost-recovery arrangement. Those views were reaffirmed in Senate estimates hearings again this year. This is not a charge to recover costs at all; it is a tax. The money is not hypothecated to be used for any list of specific purposes; it is a tax. It goes into consolidated revenue. There is no evidence or information provided as to the appropriateness of this charge, if it is in fact intended to meet just the costs associated with security and processing of visitors arriving in this country. What assurances can the high-taxing Rudd government offer this place that the passenger movement charge will not overcollect and become a general revenue-raising measure?

I also note the somewhat anarchic way in which the passenger movement charge is being introduced. In its haste to belt more people with more taxes, Labor blundered by imposing the charge on budget night on all tickets presold to passengers intending to travel after 1 July this year. These tickets were sold by the airlines in good faith at a price that included the old $38 tax. Initially, the high-taxing government failed to provide an exemption for these tickets, resulting in a messy situation where airlines would have to foot the extra cost. In this day and age, people buy their tickets much further in advance than was possible in decades past and, with the advent of low fares, there is an increasing wish of people to buy their tickets early to take advantage of those low prices. And yet, in a blunder on budget night, these people were going to have to pay an extra tax if they were travelling after 1 July. I suspect they would have been unwilling to do so and there would have been a stand-off between the airlines and others as to who was responsible for this unexpected increase in the tax. Obviously, Labor failed to consult with the industry and stakeholders and demonstrated its administrative incompetence.

As a result of coalition and industry pressure, the government has back-flipped and tickets sold prior to 1 July 2008 for use after this time will be exempt from paying the extra tax. That is as it ought to be, that is how previous increases in this tax were applied and it is incredible that the current government did not even bother to look at past experience before announcing this measure. The new tax will of course remain for all tickets sold after 1 July this year and the Australian tourism industry, already struggling with rocketing fuel prices and a strong dollar, will continue to wear the pain being imposed by a government that seems to be making up the rules as it goes along.

What does the passenger movement charge display? It displays a Rudd government that does not consult with stakeholders and is administratively inept. It displays the view of the Rudd government that the tourism industry is just a cash cow. It is all about glamour and not about working families. It suggests that the Rudd government does not particularly care about the knock-on impacts of this tax along with others, such as the luxury car tax, on small business in regional Australia. More particularly, it displays the hypocrisy of the government. We see a government ripping over $3 billion from young Australians with a tax on premixed drinks that instead of reducing teen binge drinking will probably make it worse. We see a government ignoring the advice of its own Public Service and foisting upon Australia an ill-considered scheme to watch petrol prices—a scheme that will abolish spot discounting, impose further burdens on small business and possibly increase petrol prices as a result.

We have a government that is already so out of touch that, at a time when Australians are struggling with high petrol prices, it decides to push up the price of diesel as well, resulting in higher costs for everyday items needed by all Australians. We see a government intent on grabbing more money off tourists and travelling Australians with its hasty taxes on the tourist sector—taxes that will make the lives of many Australians dependent upon the tourist dollar that much harder. So much for this government promising to reduce the cost of living. By its own actions, it is doing precisely the opposite. This tax increase will have a significant effect on Australia’s tourist industry and the business sector, which needs to travel. It must be seen for what it is: simply another tax rise.

See this speech in context