Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Link to this | Hansard source

In the couple of minutes I have left to conclude my remarks, I really just want to remind the House what it is we are actually discussing here today. This bill was part of the announcements made by the Labor Party in the recent budget, brought down, astonishingly, only last month. We stand here six weeks later and today this is the second time we are going to be considering government amendments to their own budget. This is a government that holds such a tenuous grip on this parliament that they cannot actually deliver a budget for longer than six weeks. This is the most extraordinary thing. Can you imagine Peter Costello and John Howard walking in here for any of the 11 budgets that they brought down whilst we were in government, and then six weeks after the fact, saying, 'Hang on, we cannot actually deliver this. We are going to have to make amendments to our own legislation and knock out some of the revenue measures.'? This is what is happening on this particular bill and what has happened on some other measures that the parliament has been considering this morning on managed investments trusts.

This is a great indicator of everything that is wrong with minority governments, about the failed experiment that is the hung parliament and why the expectations that Labor had given the Australian people that they could govern through this mess have turned out to be absolutely hollow, like so much else of what the Labor Party have told the Australian people. Minority government is an experiment that has truly failed. You know that it has failed when six weeks after the budget has been brought down by the Treasurer the government cannot even adhere to the plan that it laid out for the Australian people.

We are very proud of the fact that we have got the government to back down on indexing this particular tax. We have saved the small businesses in the tourism industry, and the larger and medium-sized businesses for that matter as well. We have saved them from being subject to an automatic tax hike every year to pay for Labor's failures to control its spending. We are very proud of doing that. The tourism industry is a very important industry for Australia. It employs 900,000 Australians. It really need not have been subject to an attack from this increase in the passenger movement charge.

A government that cannot bring down a budget and adhere to what it has announced six weeks later is a government that has clearly lost the confidence of the House. A government that cannot adhere to a budget for more than six weeks is a government that has lost the privilege of governing the Australian people. The sooner we can put an end to the farce that is this minority government the better off the Australian nation will be.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I support the Passenger Movement Charge Amendment Bill 2012 in the same way that those opposite supported changes to the passenger movement charge, not once but on two separate occasions, when they occupied the Treasury benches.

The bill amends the Passenger Movement Charge Collection Act 1978, raising the passenger movement charge from $47, as it currently stands, to $55. We are talking about an increase of $8 which will take effect from 1 July this year. The passenger movement charge is paid by individuals departing Australia for another country—clearing Customs and going abroad. This charge was introduced in 1995 and it replaced what was then installed as the departure tax. Under this arrangement, airlines and shipping companies undertook the responsibility of administering the charge as part of their ticket sales process.

It is safe to anticipate that this modest price increase will not have a deleterious impact on Australian tourism as we have had similar increases to the passenger movement charge on other occasions, as I mentioned earlier. There was a $3 increase in the passenger movement charge in 1999. Not two years later, in early 2001, those opposite, then occupying the Treasury benches, moved it again—this time by another $8. Bear in mind, inflation did not go up 100-plus per cent over that particular period. The shadow minister has indicated that that was for extraneous reasons, but nevertheless when those opposite occupied the Treasury benches they also looked at adjusting that charge as a means of increasing revenue.

It is interesting to look at what did occur in 2001 and compare that to what is being said by some of the personalities that are still around this place today. When the charge was introduced in 2001 and debated before this parliament, the then Minister for Agriculture, Fisheries and Forestry—none other than the Leader of the National Party, the Hon. Warren Truss—expressed the view that a higher passenger movement charge would be a fair and sensible cost-recovery mechanism. At that stage the charge was being increased by $8.

We need to be reminded that some colleagues on Mr Truss's side of the ledger on this—and certainly the shadow minister who preceded me in this debate—want to wax lyrical about tax history under the former government. When it comes to the passenger movement charge, he said the opposition's preferred position is to get rid of it altogether. They certainly did not do that when they had a chance to do it.

They are saying they stand for a low-tax government. If you want to look at that situation in its entirety, look at tax as a percentage of GDP. That peaked at 24.2 per cent, in 2004-05, and again in the following year, 2005-06. Who was that under? That was under the Howard government. It was the highest-taxing government in this country's history. Tax as a percentage of GDP has steadily declined since Labor came in in 2007. It reached 20.2 per cent and then 20.1 per cent in 2009-10 and 2010-11 respectively. This is the lowest tax-to-GDP ratio since 1983-84. The last time that tax was lower than 21 per cent was back in 1979.

You have to put things in perspective. Today will be no exception, as we will see a gaggle of people coming through here and all will want to extol the virtues of a low-tax economy, and yet they are going to be much the same people who had opportunities to reduce tax but presided over the highest-taxing administration this country has ever seen. It should be an embarrassment to those opposite that the tax-to-GDP ratio, over the twelve budgets they managed, averaged 22.2 per cent. That is certainly something that they cannot want to compare with the position we currently sit in of under 21 per cent.

Considering that sort of record you have to take them with a grain of salt every time they come in here and cry crocodile tears over the issue of taxation. It is a bit rich, particularly when we went to the last election and they would not have their election promises costed. When they finally did, there was $11 billion missing—a black hole in their essential costings. The auditors that provided the costings were eventually accused, and rightfully so, of professional mismanagement in their calculation of their costings for the purposes of the election. But when we sit now—and they sit in the position of the alternative government—we see not a black hole but a $70 million crater in their economic credentials. As I said previously, those opposite had an opportunity, up until 2011, to do something about the passenger movement charge and they did—they increased it. Warren Truss very conveniently told us the reason for it when he said that 'a higher passenger charge would be fair, and a sensible cost recovery mechanism.' Clearly, the Nationals still abide by that. But it is a bit rich to come out and be lectured to by those opposite. I understand that comments were made the other day by the Leader of the Opposition criticising the Prime Minister in the G20. For us, Asia remains very much our clear and present focus; however, any European crisis will certainly impact on the Asian trading market and, in turn, will have an impact on Australia. So we are right to have a voice in that forum. And we are right to indicate to people what we believe should be occurring.

What the Leader of the Opposition did not add is that it was not just Prime Minister Gillard making comments, there was the United States, the United Kingdom, Canada, France, Germany and China. As matter of fact, the Chinese even signed off on a pledge to the International Monetary Fund of another $70 billion to help protect against a global banking and financial crisis. If you just looked at the comments by the Leader of the Opposition and at those that are carried by some of the more popular tabloids around the place, you would think this was just about the Prime Minister.

Then again, the Prime Minister has something of a point to make. Our economy—I know those opposite do not like to be reminded of this—is growing at a rate of four per cent. We have a five per cent unemployment rate, we have record low interest and currently our sovereign debt ratio is 7½ per cent. Our economy is something we should be proud of. I know when the Leader of the Opposition goes travelling, he puts it in these terms: 'Australia has serious bragging rights.' For him to come out and make statements about the comments by the Prime Minister to the G20 makes me wonder what those opposite would have said if they had had half an opportunity. Certainly, the world is an ever smaller place these days. Trade is very important and so we do have a very clear interest in what occurs in the Asian markets, and that is our immediate focus, but we also acknowledge the impact of a European crisis and what it would do to the Asian markets.

The Prime Minister indicated to the Europeans what occurred in this country and how our country was protected from the worst economic shock in 60 years, and how we acted in the face of the global economic crisis. But I wonder what those opposite would have done if they had had the opportunity to be over in Mexico. They could have said what they did when we debated the various aspects of responses to the global financial crisis. The position of those opposite was very clearly laid out by the then shadow spokesperson: we should sit and wait and see what happens. Well lo and behold—maybe they have been giving advice to Spain, Greece, Italy and a few other places around the world, because there are many of the European economies that have done exactly what those opposite were urging this government to do—that is, 'Let us sit and wait and see what happens.'

If those opposite want to start talking about economic credentials, they need to stack that up against the health of the Australian economy at the moment. They are the ones out there on a daily basis wanting to talk this down. The last thing they want to be reminded of is the statistics. As I have said, we are an economy which is growing, we have low unemployment, we have record low interest rates and a sovereign debt which is the envy of the world. That is the basis for us having a significant focus on trade and on the trade markets as we go ahead.

I have digressed a little from the bill, Madam Deputy Speaker, and I apologise for that.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Yes, you have, and you have done nothing on trade in the last five years!

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I am sure my colleague opposite is going to want to mention something about the Asian market, so I needed to put in perspective what impact the European crisis would have on the Asian market. Those opposite thought we should not have a view on that at all.

But I will get back to the bill. In the Passenger Movement Charge Amendment Bill we are very much focused on two things. Firstly, the Asian market, which I will come back to, and, secondly, the development of regional tourism. We know there are issues about tourism in this country. Australia is not a country you pass through to go and see something; Australia is a point of destination. And if you come from the Northern Hemisphere, it is a long, long way away. We are trying to attract as many tourists as we can from there, but we know that the emerging tourism markets for us are clearly in the Asian region, particularly out of China and, more recently, out of India.

As a consequence, with the passage of this legislation $48.5 million will be provided to a new fund to support tourism industry development projects in regional Australia. That is something that we do want to showcase. We do want to attract people particularly into regional Australia. That is an area of tourism that has been dealt a heavy blow, particularly with the impact of the higher dollar. We do want to drive investment and job creation in those areas and we do want to be able to deliver certainty. We have a track record for doing that and we will continue to do it, and that $48.5 million will be earmarked to do precisely that. It will give people the opportunity to plan, to develop and to market the elements of regional tourism in this country.

Ten per cent of the increased passenger movement charge will go to the Asia Marketing Fund which will be responsible for promoting Australia's image as an attractive holiday destination and business destination for a number of the lucrative markets in Asia. This contribution is in addition to the $61 million the government has already committed towards the development of the Asia Marketing Fund in this year's budget. We are strongly committed to raising our profile in that region and becoming one of the primary destinations for tourists, particularly throughout the Asian region itself. Australia's tourism industry has already greatly benefitted from the emergence of China, which is now one of the world's strongest economies. If you listen to the economic forecast for the next decade, it will take over from the United States as being the world's strongest economy. It has also got the world's fastest growing middle class. As a consequence of that we are attracting, as quickly as possible, marketing opportunities in China, currently worth $3.5 billion. It is the third largest market of inbound visitors to this country, with 542,000 arrivals from China alone in 2011. (Time expired)

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

I rise this afternoon to speak on the Passenger Movement Charge Amendment Bill 2012. The coalition would like to have been in a position to oppose the increase in its entirety; however, faced with a government that is borrowing over $1 million every single day and is likely to bequeath a national debt expected to dwarf the $96 billion debt the ALP previously left the Howard government, the coalition will face circumstances equivalent to a financial hangover after a spending party.

The totality of Labor's economic mismanagement will still, therefore, have to be paid for. The coalition is determined not to have the financial black holes in the national accounts that this government so regularly and cavalierly delivers. If returned to government, the coalition will look to do things differently, by looking at all measures to stimulate and grow the tourism sector, rather than simply looking to use the industry as a cash cow to be plundered.

Australia is not the only country to have an international departure tax. A number of countries levy some sort of air travel tax on passenger departures or arrivals. What is striking, though, is the rate at which we are levied. The decision to raise the PMC by $8 from $47 takes Australia's departure tax to $55 per passenger. This contrasts with the Australian dollar equivalents for travel outside of the European Union of $10 in France and $34 in Germany. Outside of the EU, New Zealand has a $19 charge and the US has a $14 arrival tax.

In Australia the $27 passenger movement charge was introduced in 1994-95 to replace the departure tax. It was a measure to cover the costs of Customs, immigration and quarantine, estimated at $19 per passenger plus funding to cover the $8 cost of processing short-term visas. Two years after coming to office, the coalition, in an effort to spurt tourism growth by providing resources to cover the costs of Tourism Australia's predecessor and its See Australia campaign, increased the charge by a further $3 in 1998-99 to $30. It was not raised again until 2001-02, when the airports required additional screening due to foot-and-mouth disease, and it was increased to $38.

Under the Howard government the PMC saw only moderate increases, and only when there was a specific and valid reason to do so. Between 1996 and 2007, what to many Australians must now appear to be a golden age, the PMC rose by $11, from $27 to $38—a rise of 35 per cent over 11 years. By contrast, in just five years this government has increased the PMC by $17, from $38 to $55—a rise of almost 45 per cent, or 4.5 times the increase in the annual CPI during this period. This year alone it represents a 17 per cent annual increase, compared to an expected CPI of only 3.25 per cent.

Raising the PMC is part of Labor's need to feed its insatiable tax addiction, an addiction that forces it to cast around for reasons to justify it. They had to at least attempt to make a justification, given that on 2 March 2012 in Cairns at the Qantas national tourism awards the minister, Martin Ferguson, was participating in the National Tourism Alliance full board meeting. At the same time I was across town launching the www.staycation.org.au campaign at a press conference at the Cairns Marina, aiming to address Australia's ballooning tourism deficit.

We have gone from a surplus of $3.5 billion in 2001 to a loss today of $8.7 billion through Australians holidaying overseas. The Minister for Resources and Energy and Minister for Tourism was, as confirmed, in the National Tourism Alliance's communique, saying that there would be no increase in the passenger movement charge. In a later discussion on passenger facilitation, he said that he had heard no proposal to raise the PMC in the upcoming budget. Those statements are in this communique and I seek leave to table it.

Leave not granted.

As usual, this Labor government want to hide from the facts. The communique will be available to anyone who calls my office and wants a copy of it. How can an industry have confidence when you are telling them one thing before a budget and doing something different afterwards? Minister, you went to the tourism industry and you told them that there would be no increases in the PMC and then, after the budget, they find they are getting whacked with a 17 per cent increase—plus the CPI.

We have subsequently learned that, while we were all up in North Queensland, back in Sydney at the University of New South Wales they were modelling a potential 20 per cent increase in the PMC. This research was commissioned by none other than Tourism Research Australia, a part of Minister Ferguson's department. So while he was telling tourism leaders, 'I've not heard of any potential increases to the PMC in the budget,' he ordered his department to prepare the defence for what Labor would announce two months later.

The government might wonder why there is such animosity out there in the electorate. It is because they have a habit of saying one thing and doing something else shortly after. Who can forget 'There will be no carbon tax under a government I lead' before the election? Contrast that with the python squeeze that is waiting for them in less than a fortnight from today. I want to pay tribute to my colleague Senator Humphries, who obtained these documents and revealed Labor's duplicity.

The government knows it faces a trust issue within the electorate. That is why it tried, in relation to the rise in the PMC, what I call the 'disco ball approach'. You can see it now: all the ALP spin doctors sitting around in a room not far from here, saying, 'What can we do? How can we distract the industry? We need something bright and shiny—something that glitters.' One of them shouts, 'I know! What about an Asian marketing fund? What an idea. No-one else would have thought of that. We could really sell that one.' The rise in the passenger movement charge from $47 to $55 is estimated to raise an additional $500 million over the forward estimates, but just 10 per cent of that will be given back in the form of this bright, new, shiny Asian marketing fund. Not content with milking the tourism industry for $500 million, this government thought that it would try another resource strike at the industry by seeking to index the passenger movement charge to CPI, giving the government another $156 million over the forward estimates. In 2007, the passenger movement charge raised $420 million in revenue to cover administration costs of only $231 million; this year the passenger movement charge raised $656 million in revenue to cover administration costs of only $243 million. If we take this out to 2015-16, the government's passenger movement charge—or should we call it the government's tax on tourism?—will, according to Treasury figures, raise $1.037 billion, yet the administration costs are expected to be only $239 million. If you are looking for definite proof that the government sees the tourism industry as nothing more than a cash cow, then this is the definite proof. There are $800 million in surplus costs and expenses going directly into the bottom line.

When this government came to power, the budget for Tourism Australia—the government body responsible for promoting Australia to international visitors and encouraging Australians to travel domestically—was $136,269,000. This year the proposed budget is $130,178,000, and in the forward estimates it will still only be $134,556,000 in 2015-16. This is the lowest level of funding ever for Tourism Australia—the lowest funding ever for an industry which, combined with hospitality, provides employment for almost 1,000,000 Australians. In fact, in real terms, the money lost between 2007 and 2012 is $18,949,000—16 per cent. Projected through the forward estimates, it is $22,943,000—19 per cent. This Gillard government has given the bright and shiny new Asian marketing fund with one hand and taken away from Tourism Australia's budget bottom line with the other.

The tourism industry has had enough. The Australian Accommodation Association called the PMC 'a virtual tax on tourism' which has 'a direct negative impact on visitor numbers which in turn has a detrimental effect on room occupancy and revenue per available room in tourism accommodation businesses.' The TTF was joined by AFTA and several other travel and tourism industry organisations whose advertisement in the Daily Telegraph and the Australian Financial Review stated that the taxes and increases being placed on the travel and tourism industry were 'unwelcome and overwhelming'. No-one was more surprised that the tourism industry would stand up for itself than the ALP, who saw it is a soft touch.

Surprisingly, in the face of these full-page ads and a direct marketing campaign which showed that the industry was fed up and not going to take it anymore, Labor wheeled out an unprepared Prime Minister who was not across her brief and who had to pick up the mess left behind for her by her tourism minister. In trying to defend the increases to the PMC, the Prime Minister tried and failed to argue that the cash grab was actually designed as a positive step to help the tourism industry. That is great—help tourism by taxing it more! Prime Minister Gillard tried to imply that the PMC only affects outbound Australians holidaying overseas, but the truth is that this $55 tax slug is paid by Aussies at the start of their holiday and by our international visitors at the end of theirs. The Prime Minister said that she thought that raising the PMC was a good measure to discourage Australians from travelling overseas rather than holidaying at home. Either she made this up on the spot or, when the matter came up for cabinet discussion prior to the budget, neither she nor the Treasurer nor the immigration minister—let alone the tourism minister—understood how departure tax works.

For now, it appears that the government has succumbed to the pressure and resiled from going ahead with indexing the PMC to the CPI. However, even last night, when his own colleagues had seen the writing on the wall, Minister Ferguson was still defending the indefensible by telling the tourism industry that he supported indexation despite the rest of the government acknowledging that they had gone one step too far. Indexation of the PMC would have lead to an ongoing and ever-increasing significant impost rise on the tourism industry every year. It would have been the only tax to do so, and this would have occurred by the stroke of a pen without any future parliamentary scrutiny and regardless of the prevailing global economic conditions.

Speaking of prevailing global conditions, these are some tough times for this tourism industry, and, as I have said in many tourism forums, the industry has been doing it tough in recent years. This is due to anaemic growth in many of our largest markets for inbound visitors, exacerbated by our strong dollar; competition from new and highly competitive destinations in our region; the impact of natural disasters such as Cyclone Yasi; and short-sighted, ill-conceived and economically counterproductive policies.

So what has Labor been doing to help the industry? The record is not exactly flash. First there is the little matter of the tax that dare not speak its name—or, as I referred to it earlier, 'Labor's python squeeze'. The government did not even consider the tourism sector serious enough to undertake modelling of what the impacts would be. So, while it was shovelling out the money to the steel industry and the car industry, amongst others, all the tourism industry had to go on was private modelling undertaken by TTF which forecast that 6,400 jobs would go and that there would be a cut of 10 per cent in industry profits. With this PMC rise, the TTF is now stating that job losses could be as high as 10,000—and these would be predominantly in regional and rural Australia—yet the TTF received not one cent in targeted, tourism industry-specific assistance.

Now the government has announced that some 90 Customs staff will lose their jobs in addition to the 70 posts already cut this year. This has led to longer queues at Customs and an average wait time of 24 minutes. The government has also increased the visa label charge by $10 and passed on the $118.1 million in costs for AFP security at airports. These costs in turn will be passed on to tourists and international visitors by the airlines. People travelling to Australia will now face all these additional imposts combined with a carbon tax when they shop. When one adds to this the cuts to Customs, Labor's marketing theme for our nation should be—to borrow a line—'Welcome to Australia, where you will pay more and where you will wait longer!'

The thing about this government is that, if you watch it for long enough, you will find that patterns begin to develop. Just as it gave the tourism sector the glittering Asian Marketing Fund and then reduced funding in real terms for Tourism Australia, the government decided to repeat this sleight of hand with the SmartGate passenger facilitation system which helps eligible travellers to use electronic information in ePassports and face recognition technology to self-process through Customs and Immigration.

First, it gave $7 million to improve the SmartGate passenger facilitation. Then it made cuts of $10 million in the overall Customs budget in addition to staff cuts. Surely the government should have waited for the high failure rate to be reduced before making anticipated compensatory staff cuts? As the backbone of our tourism industry are thousands of small business operators. Tourism expenditure is mostly a discretionary-spending item and often is in a price-point sensitive market. This budget has resulted in making it more expensive to visit Australia through 'cash grab' measures such as the increases to the PMC. I condemn this government for taxing this industry beyond its capacity and it will stand condemned by the industry.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

The purpose of the Passenger Movement Charge Amendment Bill 2012 is to amend the Passenger Movement Charge Act 1978 and to increase the rate of the passenger movement charge, the PMC, from $47 to $55. As we know, the government promised about two months before the budget that it would not increase this PMC which clearly became nothing more than a blatant tax grab to try to help this government move into this mythical surplus. We certainly have not seen a surplus to date and I doubt whether we will see one in the future. But worse, the government is not just increasing those costs to the industry and to passengers and tourists coming into this country; at the same time it is cutting the resources to deal with processing of tourists. This means that tourists will be paying more for the privilege of taking longer to get through the process at the airports. We do know that the government originally planned to introduce the annual indexation of the passenger movement charge from 1 July 2013 and this would have added a further cost of $156.6 million over four years to the passenger movement charge.

Visiting Australia in the current economic climate is not the cheapest of exercises for tourists. As we see the Australian dollar edge once again above parity, the cost for international visitors increases and our tourism competitiveness declines. Why would you add to that cost for tourists coming to Australia? Why would you make it harder and more expensive and discourage tourists from coming here through increases in indexation, as we saw with this government, from $47 to $55? There is no doubt that there are impacts on our tourism industry. We are seeing this and I do not understand why the government would seek to add to the problems that this industry is facing, to add to the problems of all the small businesses.

It is only the opposition putting the amendment on the table and pressure from the tourism sector making this government drop its plans to index the passenger movement charge. We know that not only is it an issue for tourists coming here, but the high value of the Australian dollar is actually encouraging Australians to holiday overseas. I see this in my electorate. Many of the small businesses in my electorate have been affected by this. Whether they are in tourism, hospitality or retail, they have all felt that exodus, even of local tourists. For some of the small businesses, the combination of the cost to come here and the exodus of Australian travellers means they have had to make some very tough commercial decisions. I have also dealt with pensioners who are trying to live in Asia but still claim their Australian pension because their pension goes so much further overseas. There is no doubt that any increase to the passenger movement charge will impact on foreign visitors to our shores. We know that it is comparatively cheaper to leave Australia to holiday than to come here for a holiday. In part, it can be due to the high cost of living compared to other nations, but at each point the government seeks to make that differential even greater.

According to Mercer Human Resourcing Consultant, Economist Intelligence Unit and ECA International cost-of-living surveys, four Australian cities are among the most expensive in the world to live. We know Sydney, Melbourne, Perth and Brisbane are ranked 14, 21, 30 and 31. Accommodation and a night out are not necessarily cheap by international standards. We do not need any additional reasons for people and tourists not to come to Australia, but that is what the government seems intent on achieving. It is not necessarily cheaper to live in regional areas than in major cities and the cost of delivering goods and services in regional Australia can mean more expense. We know that the government's carbon tax will make both the base cost and the additional impost in regional areas even worse. Then you are going to add increases to the passenger movement charge.

A survey by Sky Scan found Australia was the 16th most expensive country to visit. Not only is this the worst time to introduce the world's largest carbon tax, but the government continues to increase costs and reduce services to the tourism sector. It is really the worst time along with these additional costs and challenges. The government should understand that this is the worst time to increase costs for tourists coming to and leaving Australia. We do not want to discourage one more person from coming to our country. You see the small business operators who have been struggling for some time, are still struggling and will struggle further. We know that that will be the case.

The tourism sector is also facing real problems because of the government's changes to the Fair Work Act. The lack of flexibility in the act is a millstone around the neck of many small tourism operations. I hear this over and over in my electorate. It is one of the reasons that a cup of coffee costs so much on a weekend, especially in Perth.

In its continual program of selling out small businesses perhaps in favour of the union movement, the Gillard government is selling out not only Australian coffee drinkers but the tourism industry around the nation. One of the great things that you can do as a tourist is eat and drink some of the best-quality food, offerings and beverages that we have in the world, as you would well know, Mr Deputy Speaker.

My south-west relies quite heavily on tourism as part of our economy. I am sure that all members here have heard of Margaret River. Margaret River, in the south-west, relies on tourism. Tourism operators do not need an additional passenger movement charge, to prevent more people from coming to Margaret River and the south-west. If you are uncertain about the tourism potential of the region, please come along to my next South West Sensations Showcase.

According to the South West Development Commission, tourism contributes almost $600 million annually to the gross regional product of the south-west. It involves over 1.4 million overnight stays. But, on current figures, only seven per cent of those are international tourists and 10 per cent are interstate tourists. Each of these figures needs to be increased.

We are looking at the provision of a larger airport, based at Busselton, capable of receiving direct flights from Sydney and Melbourne. I see that as essential to realise the greater tourism potential of the south-west. Such tourists would not be hit by increases in the passenger movement charge proposed in this bill, but they would be hit by additional costs from the carbon tax imposed on domestic transport and travel. Tourist destinations around the eastern seaboard do have direct flight capacity, which contributes enormously to their economies, and the south-west should have that same opportunity.

As we have discussed, the bill before the House today increases the passenger movement charge. It means that international visitors will pay more. International visitors who come along to the south-west will pay almost $1 million in additional Labor tax. That is what it means to my south-west. And, as they leave Australia, the extra cost will be $995,200. The extra cost to visitors to the Augusta-Margaret River shire alone will be half a million dollars. People focus on small amounts, on a small change—no, it is not. It is not, when you look at major tourism areas such as my south-west and the Margaret River region. We do not need one more reason for tourists not to come to Australia, particularly to my part of the world. This is the worst time to be adding costs, like the carbon tax, to the industry.

Tourists going to Busselton will pay a quarter of a million dollars and, at the same time, those going to the Augusta-Margaret River shire will pay half a million dollars extra. Every increase in cost collectively impacts on people's decisions as to where they decide to spend their travel dollars. Wherever they are sitting in the world, when they are looking on the internet or at a pamphlet, they ask: 'Where are we going to go for our holiday? Let's have a look. Where do we get value for money and where can we get the greatest experiences?' There are a whole lot of drivers. They are very careful as to where they decide to spend their travel dollars. Every time the cost of travel to Australia rises, some potential visitors are priced out of the market and other destinations actually look financially more attractive.

The rush of tourists, even Australian tourists, to places such as Bali actually proves this point. Those numbers actually indicate the pressure that already exists on local tourism operators who are competing for international tourists. That is why every single incremental increase, like this one to the passenger movement charge, actually adds collectively to the reasons why more tourists will choose not to come to Australia and certainly not to my south-west. We are in a competitive market. Any government action that reduces the cost competitiveness of tourism is an issue for the industry.

In 2014 diesel will become part of the carbon tax cost. So there will be real travel issues for the industry, particularly for those travelling by bus. Of course, the further you travel, the more the compounding effect of that carbon tax will be. We need to strongly encourage, not discourage, any growth in tourists.

In an era of what is really fundamental economic decline in many western nations, it will be Asia that picks up the economic ball and runs with it. Growth in economies such as Asia is based on hard work and productivity. Therefore, for tourism in Australia to flourish, despite facing the challenge that it does, it needs to engage, as we have previously done, in the Asian marketplace. Western Australia is certainly a key destination.

Another aspect of the Passenger Movement Charge Amendment Bill 2012 is the expenditure of the moneys collected by the Commonwealth under the tax. As we know, it was first introduced in 1994 as the departure tax. It was put in place to fund Customs, Immigration and quarantine activities. It cost visitors $27.

It was increased in 1998 to fund a tourism campaign—a dedicated purpose—and, again, in 2001 to boost foot-and-mouth screening, something that, as a farmer, I well understand. The rate rose to $38. But the then newly elected Rudd government pushed that up by $9—or 24 per cent—with no explanation. 'It is not for foot-and-mouth screening, it is not for quarantine, it is not for any immigration purpose; it is just a revenue raiser, because we want to throw it away on one of our famous wasteful projects.' It could have been any project. Pick your project to throw it away on. We know the government's record on border management is absolutely appalling. It has cut funding to Customs, which is about protecting our borders, to help pay for multibillion dollar blow-outs in its people smuggler subsidy program, masquerading as a Labor border protection policy.

We have seen the backdown, as I said earlier, on the proposed indexation. I do acknowledge the work of the shadow minister in the proposal to amend this legislation and the work of the tourism organisations. This is really a tax grab and it is there to fund the continuous waste, the mismanagement and the massive budget deficits and debt of this government.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

I move:

That the question be now put.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The question is that the question be now put.

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

In rising to speak on the Passenger Movement Charge Amendment Bill 2012 I have to say it has been quite an eventful couple of days that we have seen in this place. I am pleased to see that the government has finally come around to some semblance of sense in that, thanks to the pressure from this side of the House and from tourism industry leaders, they have backed down on the indexation of the passenger movement charge to the CPI. I have spoken to many industry representatives about this issue and I totally support their argument that it is both unreasonable and unfeasible to penalise visitors to the tune of $156.6 million on top of the $610 million over four years that the increase in the PMC will generate.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The member for Leichhardt will resume his seat for a moment. For those people conducting conversations out of their place, if they are leaving the chamber would they do so quietly and quickly and allow the member for Leichhardt to be heard in silence. The member for Leichardt has the call.

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

I note that I will be losing a little bit of time there, too, Mr Deputy Speaker! As I was saying, I have spoken to many industry representatives about this issue and I totally support their argument that it is both unreasonable and unfeasible to penalise visitors to the tune of $156.6 million on top of the $610 million over four years that the increase in the PMC will generate. Frankly, it was a wise move by the government to introduce this amendment to its own legislation in response to coalition concerns. Otherwise, it would have had another very embarrassing defeat on the floor of the House yesterday—and I look forward to seeing how they are going to explain that one.

There are a number of issues with this aspect of the proposed legislation. Firstly, forward bookings are a major component of the tourism industry, so how can you set prices when you do not know where the CPI will be 12 or 24 months into the future, particularly in relation to the economic performance of this mob? And with the price sensitivity and inherent competitiveness in the tourism industry, how can you lock in an increase that does not consider any other economic factors or allow for the flexibility that is needed in the tourism industry in order that they can stay competitive?

This is all at the same time as the amount being collected far outweighs the actual cost of the government services that enable these passenger movements.

I would like at this time to commend the tourism bodies that have led a very concerted and well-researched campaign on this: the Tourism and Transport Forum, the Australian Federation of Travel Agents, the National Tourism Alliance and the Australian Tourism Export Council. In my electorate of Leichhardt, tourism, of course, is one of the mainstay industries that have had a very, very tough time in recent years. No-one would argue that the tourism industry is not an industry that is exposed to factors such as the high value of the dollar and, of course, economic confidence.

I fully understand the need to pay off $140-odd billion worth of Labor debt; it is an incredible imposition on the Australian taxpayer and impacts on our financial standing on the world stage. But it is also obvious that I understand tourism and the unfair pressure that it has been subjected to. Time and time again, I have seen this government pay tourism lip service while at the same time, whenever they need to raise some revenue, they are quite happy to take it in the form of increased taxes from the tourism industry. They are happy to offer a support package to the vehicle-manufacturing industry when they hit a bit of a rough spot, but when it comes to the tourism industry and we see problems there it is, 'Sorry, you're on your own.' Then, when they see an opportunity to recover a few dollars, straightaway they whack another tax on this industry.

It has been like a triple whammy effect that has hit our airports in the last budget, inasmuch as they will still be forced to suffer the increases in the PMC and to continue to contribute to the Australian Federal Police costs. This, of course, will have a particularly negative impact in regional airports like Cairns. Of course, small business again will suffer from the slashing of revenue streams as a result of the ban on duty-free sales of cigarette cartons on arrival in the airports. In addition, eight staff have been cut from the front-line customs services at Cairns Airport. I do not know about you, Mr Deputy Speaker, but I can tell you that after getting off a long international flight the last thing I feel like doing is standing in immigration queues that take forever to be processed. This information does tend to get back to users of that airport, and it acts again as a negative for people considering travel here.

This increase in the PMC is certainly not in line with many of our tourism goals in Far North Queensland. It certainly will not be helping to double overnight visitor expenditure to $140 million by 2020. It is not going to help to widen the geographic dispersal of tourism spending within our country. PMC will hit the most price-sensitive travellers hardest and will serve as a deterrent to overseas visitors who compare Australia with other destinations. As a flat rate, it also does not take into account the different abilities of travellers to pay. Somebody arriving in Cairns on a Jetstar flight from Auckland, for example, will pay the same as a first-class passenger arriving from London.

However, with the Treasurer saying that some of the money collected through the increased PMC will fund the establishment of an Asia Marketing Fund, that is a little bit of common sense that is coming out of this. I am pleased to see that it ties in with the need to target the high-growth Asian market. It is imperative that the Treasurer be held to his words. If people are going to be forced to pay to visit us then, as a key tourism destination, we will certainly be watching very, very closely to make sure that a significant portion of marketing is targeted towards our region, which will help to make up for some of those additional costs. With Cairns having taken a hammering in recent years, the opportunities presented by the Asian market may just be our saving grace. For example, there has been an ongoing campaign to woo the Chinese market, and it has been reported today in the local media that Cairns Airport may be close to an agreement with China Eastern Airlines on direct flights from Shanghai. In yesterday's Cairns Post there was an article saying that Australia is poised to benefit from the growth from the cashed-up Indian middle class, and yesterday afternoon we heard a report that direct flights from Singapore are likely to resume after a six-year hiatus. Again, it is interesting that it was the new LNP state government and the new state member for Cairns, Gavin King, who are kicking the goals and recognising the needs of regional Australia while this Labor government continues to penalise tourism, to try to put additional taxes on this very important industry and to tax it out of existence.

Jason Clare (Blaxland, Australian Labor Party, Minister for Home Affairs ) Share this | Link to this | Hansard source

I would like to thank members for their contributions to the debate on the Passenger Movement Charge Amendment Bill 2012. The bill amends the Passenger Movement Charge Act 1978 to increase the rate of the passenger movement charge by $8 to $55 per passenger. This will take effect from 1 July.

This week a House committee and a Senate committee tabled reports on the bill. Both recommended that the bill be passed. The House committee report raised a number of concerns that industry had raised, including indexation and regional tourism. The government has considered the report and decided to make two changes: (1) an amendment that I will be moving in committee to remove indexation and (2) the creation of a Tourism Industry Regional Development Fund. This will fund tourism development projects in regional Australia through grants of up to $100,000. This is, of course, on top of the funding allocated to a new Asia Marketing Fund. It is a very important initiative and we remain committed to it. There is good reason for that: in less than a decade it is estimated that there will be 100 million outbound travellers per annum from China alone. This fund will help promote Australia as a touring and business destination in this important and growing market. It has been endorsed by Tourism Australia Chairman and former Qantas CEO, Geoff Dixon, who said:

With this new dedicated fund, we now have an unprecedented opportunity to further drive both existing campaign activity and new marketing efforts across our fastest growing and most valuable inbound visitor markets.

There has been a bipartisan approach on this issue. We have both supported the passenger movement charge and we have both increased it in the past. John Howard introduced its predecessor, the departure tax, in 1978 and presided over the biggest ever increase to the passenger movement charge of 27 per cent in 2001. The difference between the major parties is that Labor is investing some of it in the Australian tourism industry; the Liberal Party never did. I commend the bill to the House.

Question agreed to.

Bill read a second time.