Scott Morrison (Cook, Liberal Party) Share this | Hansard source

I am pleased to rise today in support of the amendment that has been proposed to the Passenger Movement Charge Amendment Bill 2008in particular, the matters relating to the issues that impact on my constituents in Cook. In Cook, we share more than half of the flights that go from Sydney airport. In Cook, we also have the highest proportion of Qantas employees living in the electorate than in any other electorate in the country. On both of those counts, I am pleased to rise in support of this amendment and to speak on the matters that are raised. A third point is that a significant portion of my time before entering this place was spent in the tourism industry, and I also rise to speak on their behalf today in terms of these measures.

The passenger movement charge, as previous speakers have said, is not a charge; it is a tax. It is a tax, as has been said not only by those who have spoken in this place but also by the ANAO and on the basis of legal advice that has been presented to various hearings over time. This is a tax; it is not a charge. The passenger movement charge increase of $9 announced by the government is a tax grab of almost $460 million over four years.

Previously in this debate, the member for Port Adelaide said:

This government does not raise taxes lightly …

I can only agree. They do it very heavily. They have done it very heavily on every opportunity they have had in this place, in the six months they have been in government, to raise taxes—$19 billion in a tax grab as part of this budget to fund $30 billion of new expenditure, making it the highest-spending and highest-taxing budget in our nation’s history. But of greatest concern is the statistic in the budget which says that it will put 134,000 Australians out of work.

Tax increases contribute to inflationary pressures. You do not keep prices down by putting taxes up. But in this budget we have $19 billion worth of new revenue measures. In this particular measure, we are increasing the price of travel by $9, as announced in this measure. There was no mention by the government when in opposition, when they paraded around this country, of new taxes. There was no discussion about the new taxes they would be bringing down. There was a lot of discussion about how they were going to keep fuel prices down; there was a lot of discussion about how they were going to keep grocery prices down. Those opposite may think that this may never have been spoken in words, but there is no doubt in the community’s mind about what it was led to believe by the government when they were in opposition. They led people to believe that this would happen and, as the polls this week clearly showed, people believed them. People believed that they were going to do these things. But, equally, people did not believe and did not know that the government were going to bring in new taxes, because the government never said they would. But, at the first opportunity they have not to raise taxes, what do they do? They raise taxes.

In this measure in particular, there is no nexus, as previous speakers have said, between the charge and the expenditure. There is no nexus at all. The government claim that it is necessary to offset the cost of:

… a range of aviation security initiatives …

But the question I have is: what are they? I have searched for them. I cannot find what these measures are. How much do they cost? The Customs budget, as the member for Sturt said, has been slashed by $51.5 million in real terms, yet we are raising taxes for these measures by an amount in the vicinity of $459.3 million over four years. The previous government, as has been said, also increased the passenger movement charge, by $8 in 2001-02. But this is why we did it: to strengthen quarantine protection at Australia’s airports and to protect the country from foot-and-mouth disease and other risks, with all cargo and mail entering Australia to be inspected. There is the purpose. If you go to the budget papers of that year, you will find what the revenue measure was and also what the expenditure measure was. And what was the expenditure? It was $592.8 million over five years. The measure, as introduced in that budget, was to raise $72 million per year. So the measure was introduced for a purpose; it was not produced for the purpose of a tax grab, as is the case on this occasion.

This tax is a pernicious impost on our aviation and tourism sectors, which are already under pressure. Tax increases are designed to discourage consumption, so placing a tax on travel is, I therefore assume, designed to discourage business activity in the travel sector. As I mentioned, Qantas are a significant employer in my electorate. There are significant shareholdings in Qantas across the Australian community, and they are our national carrier, whom we cannot do without. Having worked closely in the industry, I know what can happen if your national carrier is not able to support the initiatives of your country as you are seeking to promote your country as a tourism destination. The New Zealand government found this out the hard way with the collapse of Air New Zealand, and they had to buy it back. We need to support our national carrier in the form of Qantas, and we need to be doing things that assist them in their efforts, not things that detract from their efforts.

Geoff Dixon has recently said that the issues faced by Qantas are ‘real and substantial’. Qantas are already reeling from fuel prices increases—which have been significant since their fuel surcharges were introduced a number of years ago—and also, most recently, from union action from the TWU. The Prime Minister’s front-line troops in the war against inflation and wage pressures, the TWU, are out there asking for a five per cent wage increase from Qantas as we speak. To highlight what this means for Qantas as they work through the challenges that they face, I will read to you a recent announcement. Tomorrow, I understand, we will learn what Qantas will be doing in terms of their international services as a result of fuel price increases and, I am sure, these new additional costs that they are forced to pass on to consumers. The Australian Financial Review of 29 May says:

The airline will cancel about 5 per cent of seats in its fleet by retiring one Boeing 737, grounding two 767s and accelerating the retirement by the end of the year of four 747s that serve Perth. Fast-growing discount business Jetstar will ground one Airbus A320 aircraft and cancel the delivery of one A321 plane ... Qantas will cease flying Gold Coast to Sydney and Ayers Rock to Melbourne, as well as trimming back Ayers Rock to Sydney services. Jetstar will ... exit the Sydney to Whitsunday Coast, Adelaide to Sunshine Coast and Brisbane to Hobart routes from July while reducing frequencies on some Adelaide, Avalon and Calms routes by August.

Furthermore, the Sydney Morning Herald of 31 May said that ‘JP Morgan’s research’ highlighted the threats faced by Qantas, ‘warning that the airline could post a $1 billion full-year loss if oil prices hit $US200 a barrel.’ Yet:

The airlines engineering union is still demanding a 5 per cent annual pay rise, while the airline is offering only 3 per cent.

…            …            …

Despite oil prices falling in recent days to below $US127 a barrel, there remain concerns that the continued surge in demand for oil in Asia, combined with any unforeseen disruptions in supply, could propel the price towards $US200 a barrel by the end of the year.

The Daily Telegraph of 30 May said:

QANTAS will have to lift airfares by another 5.5 per cent and cut more flights to offset the impact of current fuel prices, analysts said.

…            …            …

‘Obviously there will be job losses,’ chief executive Geoff Dixon said. ‘We do not have a specific target, however it will be in the low hundreds.’

This is the impact on Qantas, our national carrier. It will have an impact on their business; it has an impact on how they operate their business and, sadly, it is going to have an impact on some people who are currently working for Qantas.

As we move through this period of great difficulty, we should be assisting these industries to cope with these challenges, not imposing further taxes. In relation to the current union dispute, Mr Dixon described the union’s campaign—which has included claims that Qantas was using illegal strike breakers—as ‘1950s unionist stuff’. Geoff Dixon is well known as not necessarily being politically persuaded towards the coalition side of politics. That he is a fairly fair-minded individual in the political realm is well recognised. But he said:

I am pretty basically supportive of the unions ... but scab-labour strike-breakers? I feel like I am back in the 50s.

This is the environment we are now living in post November of last year.

To get back to the issue of the impact on tourism, and particularly in the Whitsundays: Mr O’Reilly, who is from the Whitsundays, said in an article in the Financial Review that the cuts by Qantas would be the final straw for many businesses struggling to recover from poor domestic tourism numbers resulting from rising fuel prices and interest rates, floods, damaging storms and the separation of Easter from the school holidays. This will close businesses in the Whitsundays. On current average load factors, the 1,770 seats lost will see 1,400 to 1,500 fewer people in the Whitsundays. These are the realities that the tourism industry and the aviation industry are confronting right now. What has been the government’s response to this? The government’s response has been to increase taxes on the tourism and aviation industries.

The current Minister for Tourism is an honest man. I say that with all sincerity, having worked with him when I was the managing director of Tourism Australia and he was the shadow minister for tourism. He is an honest man, and on 21 March, back when the previous government increased the passenger movement charge from $30 to $38, this is what the now Minister for Tourism, then shadow minister for transport and always member for Batman, said: ‘The government should use the money it was already making from the aviation industry before imposing further charges.’ The Minister for Tourism’s argument says it all.

The tourism industry pays its way. There were over $23 billion in earnings from overseas tourism last calendar year. That is up from $19.6 billion in 2005. I raise those figures because the last time we had a serious investment in and a strategy for tourism was when the member for North Sydney was the minister for tourism. When the member for North Sydney was the minister for tourism he brought forward a white paper which injected the single largest investment in the tourism industry and tourism promotion in the history of this country. As a result of that investment and the campaigns that followed—some of which attracted a lot of media attention, but I prefer to look at the facts rather than at opinions and people’s perceptions on the creativity of advertising campaigns—it has gone from $19.6 billion a year up to $23.3 billion a year. That is an increase of over $2 billion every year as a result of that investment.

Of that $23.3 billion, $15.4 billion is spent directly in Australia. In terms of GST alone, the tourism industry is already contributing $1.4 billion every year just from international tourists to the Australian economy. Yet the government thinks that it is a good idea to go and slug them again. The tourism industry, particularly small businesses, depends not just on international tourism. The international tourism provides relief and much needed yield. It provides the second part of their business. The core part of all businesses operating in tourism around this country is domestic tourism. The domestic tourism scene has unfortunately been very flat indeed. The tourism industry is under strain domestically, with fuel prices in particular putting pressure on small business. Fewer people are getting in their cars and going for day trips. The aviation cuts, which I mentioned previously, are also putting pressure on these small businesses.

The answer is not to increase taxes but to provide support for this industry—the sort of support that the previous government gave this industry through a massive injection of investment and capital and commitment. That is what I call on this government to do rather than cutting back on Tourism Australia’s budget by around $6 million next year. Just so you know what that means, that is on average more than Tourism Australia would spend in direct marketing programs in any one of their top 10 markets. It is not an insignificant cut. This tax is an impost on price-sensitive travellers.

Last year Australians aged over 15 took more than 4.7 million international trips, taking advantage of our higher dollar and spending on average 22 nights abroad. They largely went to New Zealand, the United States, Canada and the United Kingdom. The reason they were doing that was to go on holiday and visit friends and relatives. This is a positive thing for people to do, spending time with their families, visiting friends and relatives and seeing new things. They not only have to face this new tax of $9 extra when they make this decision, they have already been dealing with fuel levies that have been surging over the last three or four years. In May 2004 Qantas first introduced the fuel charge at $6 per domestic sector and $15 per international sector. At that time oil was US$44 a barrel. Today you pay a fuel levy of $26 for a domestic sector and between $100 and $170 for international sectors, and oil is now over $125 a barrel. It is difficult enough for those the government proclaims it has sympathy for to deal with what is already happening in our economy and to take the time and make the investment in order to spend time on a holiday with their family. Now they have to pay $9 extra every single time they want to do that.

Finally, this is a tax without a purpose. The nexus between the money raised out of this measure and where it is spent has been broken. This is the nail in the coffin for that nexus. It has been put to death by this measure. We have the pain of increased taxes without the benefit of accountability through a hypothecated increase in funding for security or other worthy measures. And it is these other worthy measures that I would like to draw attention to in my closing remarks. Additional respite for people and families living under a flight path is a worthy measure. That is something that I think we in this parliament could hopefully agree across the chamber is a worthy measure. Whether it is in the electorate of Cook, which represents more than half of the flights coming out of Sydney airport on any day of the week, or in the electorate of the member for Grayndler or of the member for Lowe or of the member for Wentworth, I think there is the opportunity for us to seriously agree that providing respite for people and families living under the flight path is a worthy measure. But not just in Sydney, I should stress. We could look at other cities. We could look at Adelaide in particular but we could also look at Perth, which has not been the subject of any particular measures on noise amelioration. We could look at Perth suburbs such as Cloverdale, Kewdale and Queens Park, as well as suburbs in other cities where people are affected.

There was a program called the Sydney Aircraft Noise Insulation Project, which commenced in November 1994. It was intended at the time to raise $183 million over 10 years. It was based on applying this money on the ANEF contours, which later became the ANEI contours when forecasts turned into indicators in May 1999. It meant there would be voluntary acquisition of properties affected above 40 ANEF; for public buildings, 25, and residence insulation, above 30. The program spent $347 million, all raised by 30 June 2006. The result was 4,300 homes, 17 schools, 21 childcare centres, seven nursing homes, 23 churches and 22 hospitals insulated. That was a very successful program financed by a noise levy, which was in the vicinity of $3.50 per passenger. The member for Grayndler thought it was such a good idea that he said in 2001:

It is my view that if the levy has to be raised under the user-pays principle or if it has to be extended out in its application ... then so be it. If you are going to subject people to this terror of noise, then give them proper compensation.

I would agree with the member for Grayndler, but I would ask this simple question. I would like to know where he was in cabinet when they decided to increase the passenger movement charge by $9 and not consider providing further noise insulation, not only for the residents of Cook who live in Kurnell or in other places in the electorate, but for his own constituents in the electorate of Grayndler and for those others affected by aircraft noise. The member and now minister has had a second chance and has now, I understand, extended his sympathy on aircraft noise to Fort Street High School, which I note was outside the 25 ANEI contour. I do not begrudge him this sympathy of extending that measure but, as I said in this place yesterday at question time, I do not understand why he is not prepared to extend that sympathy to other public buildings that have the same case as Fort Street High School and, more significantly, consider those residents who live in 25 ANEI and above and give them some form of support.

The Sydney Airport Community Forum is preparing a new proposal for the minister to provide gradated relief, potentially down to the 20 ANEI contour but I would hope down to the 25 ANEF or ANEI contour. The Joint Committee on Public Accounts and Audit must take a look at the PMC, the passenger movement charge, and the revenues that are derived and see how that can be used for this purpose. That is the meaning of the second item of the amendment that is before this House. As the Minister for Tourism, that lonely honest man of the Rudd government, said recently, ‘The government should use the money it already has.’ (Time expired)

See this speech in context