Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I stand today on behalf of Liberal senators to note at first instance that we have had a meeting of the Legal and Constitutional Affairs Committee on this matter and also to note that that report has been tabled and is available for the public record. I want up-front to thank the members of the committee secretariat—Peter Hallahan in particular, and his team—for their professional and swift action to pull this report together in the time available. We have had a good deal of deliberation over the passenger movement charge, which is commonly referred to and known as the departure tax. We do not agree with this particular increase in the passenger movement charge and we are of the view that the increase is very poorly timed, it is excessive in the circumstances and it has certainly been insufficiently explained by the government in their legislative proposal. We will not be opposing the Passenger Movement Charge Amendment Bill 2008, because it is a budget measure of the government, but nonetheless we are deeply concerned about a number of issues that were raised in evidence to the committee. I would like to draw these to the attention of the Senate.

First of all, there is the adverse impact on tourism and the aviation industry. This was consistent in all the evidence put to our committee. I want to recognise the various submitters and witnesses before our committee: the Board of Airline Representatives of Australia; the Australian Airports Association; the Australian Tourism Export Council; Adelaide Airport, which had representatives appear; and the International Air Transport Association, which made a very telling submission about the impact on air transport across the globe and the very precarious position it is in. We had a short submission and evidence from the Australian Customs Service, which I will come to shortly. The Tourism and Transport Forum, which were well represented, well presented and very professional, gave a very cogent submission. We also had a submission from Virgin Blue Australia.

In terms of the adverse impact on tourism, and the fact that it could not have come at a worse time, this is what they said—this is very serious. We had representatives of the tourism industry, airlines and airport operators, as I indicated. They argued that the increased charge, taken together with other increased charges in the federal Labor budget, such as the increased visa-processing charges for non-electronic travel authority markets, could not have come at a worse time for the industry. And what have the government done about it? What modelling, what impact assessments have they done on this charge and its impact on the industry? They have done nothing. And what consultation has occurred with respect to this charge, a very hefty increase indeed of some 25 per cent? There has been no consultation whatsoever. That is on the record. I asked that particular question of all the witnesses I could. The answer was none; there was no consultation.

The tourism industry at the moment is under considerable pressure. They are pressured due to a range of external factors such as the high Australian dollar and high oil prices, which have been leading to higher fuel charges for the airlines. Of course it is hard; it is a very stressful time at the moment. The opposition senators acknowledge this, and we want to put on the record that we are concerned for the industry. We are not convinced that the government has sufficiently considered the impact of this increased charge on this important but currently beleaguered export industry. I want to note here and now that this industry is the second-largest earner of export income for our country. That should be well noted. We want to thank the tourism industry for their work, their advocacy and their impact and benefits throughout Australia. Conditions now are very different from when the charge was last increased, and there is a real risk that the increase will decrease the Australian tourism industry’s ability to compete in a highly competitive and price sensitive market.

Opposition senators were particularly concerned with the evidence from the Tourism and Transport Forum that government fees and taxes significantly inflate ticket prices. This is a concern not just for the industry but for consumers. The Tourism and Transport Forum told the committee:

If we add in the passenger movement charge with the visa application fees and the other multiple fees that are levied, it is topping out at over 20 per cent of the ticket, and we know that the ticket is the barrier to travel to Australia, so we suspect it is significant.

The International Air Transport Association sent in a submission at very short notice, and we thank them for that. They told the committee that studies that they were aware of had shown that a 10 per cent increase in the cost of travel can lead to a 15 per cent reduction in travel demand. As I have indicated, it is a 24 per cent increase in the charge that this government is imposing upon the industry. It is a very large increase. The government have admitted that they have not undertaken any modelling of the impact of the increased charge to determine the extent to which government charges are decreasing the competitiveness of the tourism industry. I am pleased to say that it is not just the Liberal senators who have this view. The chairman’s report demonstrates and all senators are of the view that there is a need for that modelling to be undertaken as soon as possible.

On the issue of transparency and accountability, there is one great, big, gaping hole in this legislative program from the government. Virtually all the submissions and evidence that we received focused on an alleged lack of transparency in relation to the PMC and a lack of accountability concerning how funds purportedly raised for purposes such as the provision of Customs services are spent. Several witnesses and submitters also contended that the PMC overcollects, a matter of concern to opposition senators. I will come to that again shortly. I have indicated that there was an entire lack of consultation with the industry and industry representatives. That is a great disappointment to Liberal senators. We hope that the government will improve its act in terms of ensuring that consultation is reignited and occurs. In terms of the lack of transparency and confusion about policy objectives, Virgin Blue made some key points, and those are set out in our report; I will not go into them now.

There are concerns about the fact that all of the key airports around Australia have now been privatised. They are all now in private hands, apart from the Cairns airport; they are privately owned. And the Australian Customs Service and other government agencies—Quarantine and Immigration but also, particularly, Customs—pay no rent for the facilities they use and the services they receive. This was a view that was strongly supported by Adelaide Airport in evidence to the committee. The Australian Airports Association said in its evidence:

... post privatisation and in a true commercial sense it would give some clarity to what Customs, Quarantine and Immigration actually need to identify, and it would give them some commercial responsibility to account for the spaces that they need to do their job.

The AAA said that tens of millions of dollars of free facilities were offered to the Australian government each year. Certainly, senators on this side of the chamber—those with a business background in particular—know full well the importance of transparency and accountability. These are private operators. Why should they be offering these facilities for free to the government just because their airport was previously owned by the government? It is not right. It is not appropriate, and we think it is an unfair deal. We want to draw it to the attention of the government so that a fair deal can be pursued in the months and years ahead.

The Board of Airline Representatives of Australia put forward a set of guiding equity and transparency principles relating to efficiency, user-pays and equity, public accountability, transparency and quality of service. We have made a recommendation to support those guidelines and the implementation of them. We thank the Board of Airline Representatives of Australia for their evidence in that regard.

The evidence to the committee from the Tourism and Transport Forum Australia said that there was an underestimation of total revenue over the four-year period. As you know, the government has estimated a revenue stream of $459.3 million over that four-year period. Well, the TTF disagree. They say that is an underestimation and that the total revenue over that period would be something like $600 million. Have the government got their figures right? I know Senator Ronaldson yesterday in a debate was talking about the government’s shambolic approach to the administration of the affairs of this country. We have to ask: have the government got their figures right? The TTF would say not. They say there is an underestimation by $140-odd million over four years. Time will tell. Be assured that, through the budget estimates process, we will pursue the department and this government to find out if they have sharpened their pencil or if they are taking a lackadaisical approach and acting in a dilatory manner.

The need for transparency is very important. We have drawn a number of conclusions in the Liberal senators’ report which we bring to the attention of the Senate. We will not oppose this measure, because it is a budget measure, but we do urge the government to give urgent consideration to the following. The first issue is deferring the increase in the PMC by 12 months, as requested by the Australian Tourism Export Council. Matt Hingerty put forward a very strong argument to the committee. He said, together with other witnesses, that this could not have come at a worse time in the history of the tourism industry—a 24 per cent increase, plucked out of the air, just like that. It is a tax measure where a lot of these moneys are going into general revenue.

I know there was Australian National Audit Office Audit report No. 1 1996-97, which said that there was an overcollection of, I think, some $19 million. That is a lot of money. So, is it a cost recovery measure or is it a tax? What is it? Can this government explain to the industry, the consumers and this parliament whether it is a cost recovery measure or a tax? If it is both, could they please explain exactly how much money they are collecting for cost recovery purposes for Customs, Quarantine and Immigration? Once we know what that figure is, we know what the overcollection figure is and what is going into general revenue. We need that transparency, and I want the government to come clean and explain that to the Australian people.

The Australian Tourism Export Council recommended a deferral, and we have recommended that modelling be commissioned on the impact of the increased PMC charge to determine the extent to which government charges are decreasing the competitiveness of the Australian tourism industry. Fortunately, that has been picked up by all senators, and I thank Senator Crossin, Senator Marshall and others who were involved in the debate for supporting that particular recommendation. I certainly acknowledge and thank Senator Mary Jo Fisher. I also thank Senator Russell Trood for his support with respect to this particular report.

Our third recommendation is for the implementation of a user-pays system for services, infrastructure and floor spaces occupied which are currently provided without charge at airports. Again, this is consistent with our view that there should be transparency and accountability. The government have got to come clean. These are private operators; these are small and large businesses, and they are providing these services at the moment free of charge to the government. The government might say, ‘This is what happened in the past.’ Well, the fact is that these airports in the past were primarily owned by the government. They are now privately owned.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

In the last six months?

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Whether it has been in the last six months, Senator Marshall, or over the last six years really does not matter. You are in government. It is a whole new ball game. It is a new chapter. You are responsible and you need to stand accountable. Do not just say, ‘This is what it was like years ago.’ You know full well that these businesses are propping up the government by providing these services for free, and there is no accountability. And even if it is for free, you should at least know what the costs are to Quarantine, Immigration and Customs. To what extent are they benefiting from the taxpayer?

Finally, on behalf of the Liberal senators, I have indicated that the government should adopt similar transparency and accountability principles to those outlined by the Board of Airline Representatives of Australia. A lot of key points have been made, and we hope that the government will listen either now, in the second reading debate, or in the committee stage, and actually answer some of the questions that have been put to the departmental officials. I can see that at least some of the departmental officials are here in the advisers box, and I hope that the government will take the opportunity to seek their advice, get answers to some of these questions and provide those answers in this second reading debate, or in the committee stage, so that we know exactly where we stand and there is transparency with respect to this. In conclusion, moving from $38 to $47 is a huge increase in the passenger movement charge, commonly referred to as the departure tax. That is a 24 per cent increase in one hit, and industry does not like it. We certainly express sincere and legitimate concern for them and on their behalf, and on behalf of the travelling public in Australia. I thank the Senate for that opportunity and I know that Senator Macdonald and others on this side of the chamber have similar concerns.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The Passenger Movement Charge Amendment Bill 2008 is yet another bill which conclusively shows that this government is just another high-taxing, financially incompetent Labor government—the sort of government we have come to expect from the Labor Party over many decades. It is a government without any real compassion or care and it is a government which will preside over a huge increase in unemployment—even their own budget figures indicate that. It is a government which will see business bankruptcies increase quite dramatically and it is a government which will throw many hard-working Australians onto the welfare market. One would almost think that the Labor Party is happiest when it is dishing out money to people and having people dependent upon the government rather than dependent upon their own hard work and initiative. The sort of Australia that we have known over the last 11 years, where enterprise and hard work was encouraged and rewarded, will again disappear under a Labor government. Business confidence is at its lowest level in 16 years. This legislation before the parliament is another example of why those problems will be confronting Australia over the next several years.

I bring to this debate a particular Northern Australian viewpoint. The area around Cairns, which includes the Great Barrier Reef and the wet tropics rainforest, has long been a preferred destination for international tourists, but the tourism industry is now in real difficulty. The huge increases in oil prices are really having an impact on tourism and on any sort of activity in areas that are remote from the capital cities or which rely on transport from international sources. In spite of Mr Rudd promising before the last election that he would bring down oil prices, we now see oil prices at their highest level on record. Rather than do anything about it, rather than adopt the opposition’s approach and cut excise by 5c, the Labor government sits on its hands and watches. Before the OPEC meeting last week we had the same sort of talk as we had before the election. Mr Rudd was going to send his minister to put the blowtorch to OPEC countries, but they barely got a whimper from Australia and, of course, there was no progress. The sorts of activities over which the Labor Party is presiding will destroy many of the businesses and activities that have built Australia so wonderfully in the last 11 years.

It is quite clear in the Cairns area that tourism is in difficulty. The exchange rate has meant that tourists from Japan, who were a very big part of the Cairns tourism boom over the last decade or so, are finding it not as financially attractive to come to Australia. Add to that the high price of fuel and the fact that QANTAS, because it has those fuel and wages constraints, is now cutting services quite substantially in and out of Cairns. The last nail in the coffin is this government raising the tourism tax by $9 at this time. This will have a substantial impact on the Cairns tourism industry and indeed the tourism industry right across Northern Australia and Australia as a whole. The impact of this additional tax by the Labor government will not be seen for a few months, but it will be there. I understand that the difficulties with this particular measure will be long felt in regions like Cairns. Cairns International Airport was substantially modified and upgraded by the Fraser government many years ago and became a real mecca for international tourism, but it is now struggling under the continued imposts made by the Labor government and the exchange rate. What the industry in Cairns needs is a new approach to governance that will seriously help the tourism industry. It is suggested to me by people in the north that the best thing that the government could do would be to completely abolish the passenger movement charges. That would be the single most helpful thing the government could do.

What did the Queensland Labor government do when Qantas made its shock announcement a couple of weeks ago? They said—would you believe—‘We’ll throw in $4 million for an advertising campaign to help Cairns.’ That is of no assistance at all. Not to be outdone, a few days later the federal government announced—very belatedly, because the local member, Mr Turnour, was missing in action at this crucial time—that it would match the Queensland government’s $4 million. So we have this pool of $8 million, which, as anyone in the advertising industry knows, will not go very far at all. That is not what Cairns wants; that is not what Northern Australia wants. We need a different approach to the whole issue. The best thing the government could do would be not to increase the passenger movement charge but to abolish it altogether. I am given to understand that, if the passenger movement charge were abolished, the gross domestic product just in the tropical North Queensland region would increase by something like $60 million to $70 million by the year 2013. It is a difficult issue for the tourism industry generally, but it is a particularly difficult issue for the tourism industry across Northern Australia.

As the Senate Standing Committee on Legal and Constitutional Affairs report that has been presented to parliament clearly shows, export tourism operators are under extreme pressure at the present time because of the increasing oil price and subsequent reductions in aviation capacity; the strength of the dollar; inflationary aspects resulting from labour, food and beverage cost initiatives—I will come back to that; and external events, such as the Olympic Games and the liberalisation of visa requirements. But they are also suffering competition from places like New Zealand, where the international departure fee is only $25. In Australia, we have a departure tax that is almost double that amount. We cannot even keep pace with our cousins in New Zealand.

While Mr Rudd, prior to the election, promised Australians that he would bring down grocery prices, we have seen anything but that since, and this has had an indirect and ongoing impact on the tourism industry. They are getting attacked from every angle, and what does this government do in its first budget? It simply adds another nail in the coffin of the tourism industry in Australia. But this government does not care. It is not interested in the tourism industry, because the tourism industry is principally made up of small business operators and mum and dad shows—people who work much longer than union hours, I might say, to get ahead. They have enterprise; they have initiative; they want to work hard; they want to look towards their future without government assistance. But this government is not interested in those sorts of people, and this increase in the passenger movement charge simply exemplifies that.

As the Australian Tourism Export Council told the committee:

It is the small businesses in regional parts of Australia in particular that go first. And that is happening as we speak. We have got to the point now where even that strategy for absorbing the costs has come to the end of its cycle and my members now have to pass on to the customer the price increase …

That, of course, means a less competitive tourism market for Australia. The Tourism Export Council also said that the impact of the increased charges was compounded by other budget measures which it considered also had a negative impact on the tourism industry. They identified a number of these additional impacts, which they said—and it is mentioned somewhere in the report—will add $1 billion of costs onto the tourism industry in Australia.

Representatives of the Tourism and Transport Forum said this to the committee:

We have a rationalisation of air services routes by our domestic carriers, we have historically high fuel prices, we have a high Australian dollar and there are potential trade barriers on long-haul travel emerging from the European Union. There are significant issues facing the tourism and aviation industry and so the timing of the PMC increase—

on the part of this inexperienced Labor government—

could not have been worse.

The promises and the comments that Mr Rudd made before the election that led Australian people to believe that he would reduce oil prices and reduce grocery prices have just been shown to be a complete and utter sham. As we go through the cycle of this three-year Labor government, we will continue to see that sort of insensitivity to business and to job creation. We will continue to see the sort of spin for which after seven months Mr Rudd is already becoming renowned. It is at last getting through to the Australian people that good governance requires decent action and good management skills, not just good media-spin skills. This particular bill here today is another example of everything that is wrong with Labor governments: they simply cannot be trusted with money.

This is a budget bill. I am delighted that the coalition insisted on referring this bill to a committee even though, because it was a budget bill, the committee reporting time frame was very short. That, of course, prevented a number of people who would have liked to have given evidence to the committee from getting in a submission and being able to appear, but at least this Senate did its job by looking at government legislation. We do not want to be destructive. We recognise that, even under false pretences, the Labor Party were elected as the government and should be allowed to govern. This is one of their budget bills. Although we do not like it, we are not going to oppose it, because it is a budget bill.

However, I am delighted that the coalition was able to insist that this bill go for scrutiny by a Senate committee—that is what Senate committees are about. They are about subjecting government legislation to scrutiny and giving Australians the opportunity to point out to the government the mistakes it has made. Whilst those deficiencies have been pointed out, it is quite clear that any comments to that effect fall on deaf ears when it comes to this Labor government. But at least Australians have had that opportunity.

If the government had any sense or any real concern for Australia into the future, especially over the next couple of years, it would take notice of the report, particularly the part for which the Liberal senators on that committee were responsible for. They have summarised the concerns that were raised at committee hearings. If the Labor government had any sense, it would do something about this bill. As I say, it should withdraw it now and look not just at the additional tax it can shove in its pocket at the moment but also at the ongoing impacts this sort of legislation will have.

We can see that this is just a tax. Some attempt was made by the Labor Party to say that this is to cover costs. But, again, the evidence to the committee clearly shows that the increased revenue from this measure far outweighs the cost that is required. In fact, the figures show that border security, which this was supposed to assist, is impacted to a greater degree by the budget; there are cuts in real terms to the customs department and to other border security measures but, at the same time, the tax to allegedly pay for these has increased.

This new tax by the Labor Party is like the alcopops tax; it is all about taxing Australians. It has been demonstrated clearly that the alcopops tax has nothing to do with binge drinking, which seems to concern Mr Rudd so much—and well it should, I might say. It is really not about that, because the evidence has shown that that tax will have very little impact, and it is the wrong approach if we want to address binge drinking. Similarly, this additional tax on the tourism industry, on small business, is just revenue raising by the Labor Party, with no benefit being returned to the Australian nation or its small business people, who constitute the principal part of the tourism industry.

The Cairns tourism industry and tourism industries right across Australia will continue to operate. They will succeed in spite of this adversity and in spite of what seems to be increasing antipathy from the Labor Party and the Labor government. They will succeed because they are hardworking, initiative-driven people. Whilst things will be pretty tough for them over the next little while, they will hang in there. But this government should be doing things to help them. It should be doing things to increase the economies of regional Australia, of Northern Australia, rather than trying to decimate those economies by this additional tax on small business and on Australians.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

My remarks on the Passenger Movement Charge Amendment Bill 2008 follow on from those of Senator Macdonald, who is a very loyal Queenslander. He is from North Queensland and he is expressing concern at what is happening there with the downturn in the tourism industry. Yesterday, by chance, I rang a North Queenslander, a person who owns a trawler. We were discussing prawns and so forth. I said to him, ‘Well, how are things going in North Queensland?’ He said: ‘Terrible. The prawners are in trouble because of the high dollar and the price of fuel. The sugarcane industry is in huge trouble because of the value of the dollar and the price of fuel; with every tonne of sugar they produce, they lose $30.’ Then he got on to the tourist industry. He said, ‘Well, if you think primary industry is hurting in North Queensland, the tourist industry is in diabolical trouble.’ He then said, ‘So generally in North Queensland it’s a pretty sad story for the sugarcane industry, the tourist industry, the prawning industry and other industries that use fuel.’

A government should be taking these things into consideration. The tourism industry is a competitive one. The tourism industry in North Queensland has competitors, and the competition is fierce. The tourism industry is one the largest employers in Australia and never more so than in North Queensland. Anyone travelling around that area and staying in a hotel will see various little people movers coming around in the mornings. Some will take people out for white water rafting, some will take people out to the reef and some will take people up into the tablelands. The whole of Cairns, the whole of North Queensland, is built on the tourism industry. When I first went up there in the sixties, it was basically a sugar town and a town that serviced the stations west of Cairns. That has all disappeared in the last 30 years. It is tourism, tourism, tourism. These are the people who are going to get hurt. You do not kick a person when he is down, and this passenger movement tax is actually kicking the tourism industry when it is lying on the ground.

We were told that the Labor government have put $4 million in. The federal government matched it with another $4 million for an advertising campaign. That will help, and it is welcome, but what Australia needs and what North Queensland needs is those tourist planes coming in, one after another, from Japan and from overseas more generally. That is not happening now, and consequently North Queensland is in diabolical trouble.

The Labor Party find it difficult. They cannot help themselves. It seems to me that, when they go to Labor Party school, the first thing they learn is tax: ‘You must tax. Anything that moves, you tax it. If it doesn’t move, you still tax it.’ We have found out just in these short six months of government that, so far, Labor have ordered $2.9 billion of tax increases. This is just another tax increase that the Labor government have put forward. What is the Minister for Tourism doing? Why wouldn’t Mr Turnour, the member for Leichhardt in North Queensland, argue fiercely that this is an imposition on his electorate and get in there and defend the reason for not putting on a passenger movement tax?

Cairns is just a microcosm of all of Australia. Australia depends on the tourist industry. Tourism is one of the biggest industries, one of the biggest employers, in Australia. This is going to impact not only in North Queensland but right throughout Australia at a time when tourism is suffering because of the high dollar. Surely you people over there can understand these things. Surely the government must understand that tourism equals a high rate of employment. What is going to affect tourism? It is the dollar. How do we offset that when the planes have stopped coming in? ‘Oh, we’ll tax it more. We’ll just hit it with another tax and another tax.’ The effect is that there is less and less tourism coming in and higher and higher taxes. It is just unbelievable that people could think in those sorts of terms.

Another example of the taxation—and we cut this one off at the pass—was the road user charge. No wonder the National Party stood up and argued very strongly against that, because the effect of the diesel charge was going to see excise go from 19.63c a litre to 21c a litre, and the government also proposed that the excise be indexed on an annual road cost adjustment. In other words, Labor was supporting an indexation of fuel at a time when Australia is totally worried about the increasing cost of fuel. That is most important to the National Party, because every time fuel goes up the price of groceries goes up. It does not only go up as it goes up in the metropolitan areas, in the cities; that increase is multiplied many times by the time that groceries, sheets of iron, station equipment, farming equipment and so forth are transported out to the west. The multiplication of that increases so that people bear a much heavier burden from the price of products that go out.

We have seen a $2.9 billion increase in taxation—the taxation grab—in Queensland. Who is going to pay this tax? It will be the people who come in, but inadvertently it will be the people in the tourism industry who lose their jobs, lose their businesses and lose their employees. I do not think the Labor Party have thought through the ramifications of this taxation. We have seen that time and time again. Since the Labor Party have come into power, we have seen the legislation that goes through here.

Just last night was a great example of absolute, total confusion reigning in the Labor Party. Two hundred thousand workers were reduced in salary—the most deserving workers in Australia, the charity workers. Two hundred thousand of them were going to lose $50 a week. I understood this, because it started to happen about a month ago, when people started to ring my office and say, ‘I’ve got a letter from the department saying that my benefits are going to be reduced.’ I sprang into action, started to make inquiries and issued press releases, but it did not register with the government. It just continued to roll on, until last night the panic button was hit, and we had to come in here and put through legislation that would reverse the incompetence of the Labor Party. There does not seem to be any thought in the process about what is going to happen. We see 200,000 charity workers slugged $50 a week, then we all get on the pumps last night and bail like crazy to bail them out so that they get their—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

It was your bill.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Senator Conroy says that it is our bill. Senator Conroy, you have got to understand this. You go to the polls, and the people make a decision. The people made the decision: they elected you. You put the legislation in. You put the amendments in. You sent the letters out. It is game, set and match. It is your fault. You are the government now. If you do not think you are competent to govern, I think you should go and resign and tell the people that you are just not competent to handle these technical amendments.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

It was you who voted for it!

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I did not vote for it. I was the one who rang the bell on you. I was the one who continued to ask questions in estimates and in this place, time and time again. Not only that, you are going to do it again with salary sacrificing. You are lining up for another 200,000 people who are going to have their benefits cut, and you will be back in this parliament within another couple of weeks saying: ‘Oh, this was an unintended consequence. We didn’t mean to do this. This is terrible.’

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Senator, it was your legislation that went through last night. It was your amended bill that went through. It was your government that sent the letters out to 200,000 workers and said, ‘Sorry about this. We just took $50 a week off you charity workers.’ Then you ran up against the nurses union, which nearly ripped you to pieces—and rightly so. They are the consequences of the things that you continually do and the legislation that you continually put up in this parliament. No doubt we will be back here when we come to the salary sacrifice measure, because people are going to lose benefits. We were told last night that 20,000-odd people were going to lose benefits on health cards, baby bonuses and a number of other things. I have been trying to get that information out of the government for the last month and I have been spectacularly unsuccessful in getting it.

What I am trying to convey to the Senate today is that, again, we have a piece of legislation that has unintended consequences, and the consequences can be clearly seen. It is going to put up the tax on passenger movements significantly. We are going to pass this bill. We believe that if the government are silly enough to do this and it is part of their budget and the people elected the government then they have a right to pass their legislation. So we will be passing this. We have carried amendments making it not retrospective on tickets that have been sold. That was a bit of a win. In the overall scheme of things it is a plus; it is a positive. But it is not going to make a great deal of difference in the end.

I am not sure whether the coal industry or the tourism industry is our biggest industry—Senator Joyce might be able to inform me—but you have to nurture those industries. You have to cuddle them in. You have to make sure that nothing happens to them. When something is producing so much income for Australia—and foreign income—you can see the writing on the wall. The dollar is going through the roof. It is affecting not only the tourism industry but every primary industry that exports a product. When you see it happening, the alarm bells should ring.

I have always thought Senator Conroy was a reasonably good operator. I know that many of my colleagues over here do not share that view. I think they are being a bit uncharitable. But Senator Conroy should be looking at this at the cabinet table, when these proposals are put up. I know he is the minister for communications, but that does not exclude him from making a comment.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

He is just slow to do that.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Well, he should be making comments, because he has one of the highest positions in this land. He should be saying, ‘Prime Minister, I think we had better have another look at this. How is this going to impact on the tourism industry?’ I have never thought of him as a yes man. I have always thought that he would argue his case. But someone is letting a lot of these things through. Mr Rudd may not like criticism; he may not like opposition to his ideas. But, Senator Conroy, it is up to you as a sworn minister in cabinet to put your hand up sometimes and say, ‘Prime Minister, putting these passenger charges up is going to have a huge impact on the tourism industry. Do you think we should just defer it or do you think we should have a look at it? Do you think we should get someone in to tell us what to do about it?’ But it does not seem that anyone in the cabinet is prepared to challenge the Prime Minister or to challenge anyone. Maybe you are all just interested in your own little bailiwicks and your own little fiefdoms. Something is not right in cabinet, because these things continue to—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Chaos rules.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Yes, Senator, you are probably right: chaos rules. But this could be a lesson to cabinet in future. Last night could be another lesson. There is a future lesson coming up on salary sacrifice. We are going to be in for another salutary lesson. We continue to go down this course of head down, tail up, and no-one gives anything any degree of thought. I cannot say strongly enough that we are going to have to vote for this whether we like it or not. We cannot knock all of the government’s budget over. We have to let them make their own mistakes. They are the government, and we cannot hold their hand and block things that they want. We are going to have to let some of these things go through.

We will find that this is going to have a huge impact on the tourism industry, which is already suffering. North Queensland, in particular, has just had a triple whammy. The fishing fleet is just about all tied up there. People are terribly worried. Then you have the sugar industry, where they are losing about $30 a tonne. They have to keep their farms going because if they do not they will not keep the mills going, and if the mills close they do not have a future. It is not that they want to do it, but they have to do it. They have to keep the mills going and lose money. And then of course there is the tourism industry. So North Queensland is really going to be hit very, very hard. I do not know what more I can say.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Not as hard as when the National Party vote themselves out of existence.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Don’t you worry about the National Party, Senator Conroy. I would think that you would have enough worries on your plate to keep the cabinet and the government worried for the next two years. You are in chaos at the moment, and this is just going to add to the chaos. I do not think you guys in cabinet are actually pulling your weight, to be perfectly frank.

I do not know what is going on in cabinet—I would like to know what is going on—but it does not seem there is any rational discussion on any bill that comes up. ‘We put a bill up, we talk about it, we put our hand up,’ and then, ‘Yes, Prime Minister, you’re right.’ But then we in this parliament have to sort out the mess. This is one for you guys. We are not going to sort this one out for you. You are going to wear it. You are going to wear it in North Queensland. You are going to wear it in the seat of Leichhardt. You are going to wear it in the seat of Dawson, when the people up there have less and less tourism because you keep putting more and more taxes on. The consequences will be that you will lose that seat. If that is the way you want to go, good luck to you. We will be there, ready to take them back again. I oppose this bill but I am not going to vote against it.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to reiterate and emphasise the comments made by coalition colleagues as a member of the Senate Standing Committee on Legal and Constitutional Affairs, which inquired into the Passenger Movement Charge Amendment Bill 2008. I thank the industry, as have my colleagues, for the very genuine evidence given to the committee, albeit at very short notice. I want to highlight some of the evidence that they gave to the committee. This is an industry that has faced three significant changes over some years: firstly, the transition in ownership of airports, largely from public to private; secondly, emerging threats to national and international security, threats of an economic nature and, in particular, threats to travelling at large; thirdly, the industry shares with the Australian public the experience of a new federal government, led by a Prime Minister that has promised the Australian electorate to deliver evidence based policy.

Evidence based policy requires three things: first, clear articulation of the purpose for which the policy is being proposed—the why; second, clear economic analysis of the impact that the policy will have—clear economic modelling that underpins the policy; and, third, a clear mechanism to monitor the progress of the policy, to track its impact over the projected period of time and, equally as importantly, to ensure that the policy achieves its stated objectives. Whilst the coalition will not oppose this legislation, we are concerned that the Rudd government is failing, as with other measures, to deliver the promised economic based policy. Prime Minister Rudd has failed to instruct his cabinet, his ministers, on how to implement evidence based policy 101. I will put my views as to how. First, the government has failed to clearly outline the reasons for the increase in the passenger movement charge. Is it for cost recovery purposes, or is it a tax? If it is for cost recovery purposes, then why did the minister say in his second reading speech that this increase is, in part, to fund national security, yet he did not say what the other parts are that will be funded?

Particularly given the changes that are being faced by the industry, it is incumbent on the government to answer the question posed in evidence before the committee by some witnesses that, to the extent that national security does need to be funded, it should be funded on a user pays basis and on the basis that the user is the Australian public writ large, as opposed to the traveller. Particularly given the changed circumstances being faced by this sector, it is incumbent on the Rudd government to answer that question. I am disappointed that the majority report from the committee has failed to do that, so I look forward to hearing about the answer to that question in the ensuing debate.

To the extent that the increase in this passenger movement charge may be to fund in part national security, then what are the other bits and pieces that are being funded? If this is not a cost recovery mechanism but a tax, then come out and say so. If it is in part cost recovery and in part tax, then come out and tell the Australian public so. We wait to hear the clearly articulated reasons for the policy, the first step in evidence based policy 101. On the second step, economic modelling to underpin the implementation of this policy and the increase in the passenger movement charge: we heard from the witnesses that there has been no modelling of the impact that this increase will have on the travelling public, on the tourism sector and on Australians at large. In my case in particular, being a senator for South Australia, I was very concerned to hear evidence from Mr Phil Baker, from the Adelaide Airports Corporation, as to his concerns about the particular impact of this increase on people who travel through Adelaide. Irrespective of the fact that it is a flat increase nationally, Mr Baker gave evidence that this increase would impact particularly on passengers likely to transition through Adelaide, given the comparison of the South Australian market with the market nationally.

I look forward to the government providing the economic modelling of the impact of this measure on the travelling public and on the Australian community. I also look forward to their delivering transparency and accountability in the appropriation or the expenditure of the money. Clear evidence from the witnesses was, thus far: there is none. Indeed, how can there be when the government on its own say-so is unsure of the reason for which this policy is being implemented? That is what one inevitably has to conclude, from the information on the public record at this stage. If it be not so, I look forward to hearing from the minister as to the clearly articulated purpose for the increase in the passenger movement charge.

It is no answer for the government to say, as they have attempted to say: ‘We’re just continuing what you did.’ It is no answer from my colleagues opposite, or the government, to say that, because, as I have said, we have had transition in ownership of airports from public to private over a number of years; we have an industry that is facing new and emerging threats; and we have a new federal government with a Prime Minister who has promised delivery of evidence based policy.

I call on the Australian government to tell the Australian people and to show the Australian people the why, what and how of this increase in the passenger movement charge. I say to the Australian government: tell the Australian people for what evidence based purpose is the government increasing the passenger movement charge. Tell them the why. Tell the Australian people and show the Australian people the what. Show the Australian people how the increase will impact on the tourism sector and the Australian community. Show them which bits of the increase will go where. Be transparent and deliver on the Prime Minister’s promise to deliver evidenced based policy.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

The increase in the passenger movement charge, as proposed in the Passenger Movement Charge Amendment Bill 2008, is an extremely important issue. I want to reinforce the imperative that we must look after Australia’s tourism industry, especially in my state and in the state of Senator Brandis, Senator Macdonald and Senator Boswell—the state of Queensland. Tourism represents about 3.9 per cent of Australia’s GDP. It is a vast industry that generates $23 billion worth of exports and employs about 480,000 people. The tourism industry, especially in North Queensland, has some serious problems now. The price of fuel has been an incredible dampener on the capacity of people to come to Australia. Without those people coming to our nation, there is a huge hole in the economy, especially for places like Cairns. We have to remember these areas rely on things such as sugarcane farming, tourism and fishing, and then it starts to wind down. The economies of towns, especially those in the far north—Airlie Beach, Port Douglas and Cairns—and also on the Gold Coast, have been built around tourism. Anything that we do in these precarious international economic circumstances can make it even more difficult for people to come to Australia and be part of our nation and of what we have to offer, and that has a huge economic cost.

What is also very galling about the bill is that we are apparently looking at a cost recovery mechanism. It is one of these Labor Party cost recovery mechanisms. It is very similar to the alcopops tax. I believe that the government is going to collect another $100 million with the increase of $9 with this charge. The point is: why can’t we get clear numbers on how this is cost recovery? I do not think the government can prove it. If the government cannot prove it then it is not so much cost recovery but another tax.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Exactly.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Yes. The most important thing here is that we must stand up for a bit of honesty and transparency and move away from a certain, dare I say it, deceitfulness where taxes are brought in under the guise of national security. You know what they always say about patriotism: it is the last refuge of a scoundrel. This charge is the tax of a scoundrel. The government says: ‘We must cover the costs of increased security measures but we can’t table them. The reason we can’t table them is that they don’t exist.’ This is in fact just another mechanism to collect money for the government.

This charge is a double whammy. There is a tipping point with charges. If you keep putting charges on, you will get to the point where they do make a difference: people make a decision not to come here. When they make a decision not to come here, they go somewhere else and enjoy their holidays in Hawaii or in Bali or wherever. It is an extremely competitive market. We have a big problem with the Japanese. They have started moving away from Australia, their former attraction. One might suggest that this has not been helped lately by the leading officer of this nation and his snub of Japan at the start of his exposure in that office. As the Japanese are moving away from the north, there is a huge hole emerging in the North Queensland economy. So, far from putting a tax on movement, we should be encouraging it. We should be making travel as affordable as possible and doing everything in our power to encourage people back to our nation. It just stands to reason that, the more affordable you make a destination, the more it will stimulate the economy and the more benefit you will get from the greater income stream into the nation by our being an affordable destination.

The Labor government has also been completely incapable of dealing with the fuel crisis. The price of fuel is also a huge inhibitor in the tourism industry of Northern Australia. The Labor government has come up with no real policy to deal with the fact that a fundamental underwriter of our economy, the price of fuel, is moving to a point where, without a shadow of a doubt, we will head into a recession. If we continue to put these downward pressures on the Australian dollar by making Australia less affordable to travellers from overseas, and if we start to get a devaluation in the Australian dollar, then the current indictment of the Australian motorist paying for fuel at $1.70 could easily blow out to $2.50 and $3.

Just think of it; the maths is quite simple. I remember locking the $1 in when the exchange rate was getting close to US50c. If that pressure were to continue, then the cost of fuel, which underpins the tourism industry, the agricultural industry and the mining industry, could take them to a tipping point where the underlying economy of those industries would become unviable and, of course, the economy would crash. I believe we would have a recession like we have never seen in living memory.

This is something that you would have thought the Labor Party would, during their 2020 Summit, have gone into bat for. That would have been something constructive to come out of the 2020 Summit—the idea of a new form of supply, a new mechanism to drive down the price of fuel by increasing supply. But instead we get other things, such as this bill before us today that does completely the opposite. This is in a market where we are trying to encourage people to come to our nation and to help underpin the economy—especially in the north; and I am talking about the remote north of Australia. The economy in the remote north has been created on the promise of a certain income stream from tourism. Now that that income stream from tourism has had a huge hole put in it, the whole financing capacity of that capital infrastructure has also got a major problem before it. Why would we bring forward a bill that is going to add to the problems? If this bill is truly for security measures—and we know it is not, because they cannot be tabled—why doesn’t it bring some transparency and honesty? Surely, after the alcopops fiasco, you would think that the government would realise that Australia was catching on to this idea that if you just bang on a tax and give it a romantic name, everybody will swallow it. Well, they are not anymore. It is interesting to see now that even Family First and a whole range of people are now awake to where the Labor government is on certain issues and how they try to weasel these taxes in.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Typical Labor government; they always do.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Yes, that is correct, Senator Brandis. I am sure that my good colleague Senator Brandis would agree that we always thought it would take a little longer before the Labor Party got clever and tricky; but it did not take long at all. They immediately started taking the Australian people for granted and became clever and tricky instantaneously. It was interesting reading through the speeches in the other place. I noticed that the Minister for Resources and Energy and the Minister for Tourism had not made a contribution to the debate by the time Mr Ciobo made his speech. It is a crucial issue in his portfolio and he did not show up. Maybe he appeared later on. It is vitally important that we see how the Labor government are going to deal with this—amongst a whole range of other problems that they seem to have stewardship of at the moment or have managed to exacerbate. You cannot deal with problems by creating a new tax.

During the campaign, Labor grabbed on to something former Prime Minister John Howard said. They accused him and tried to drag him backwards and forwards through the prickles because he said that working families had never been better off. There is a very clear question that has to be asked now. I strongly believe that working families were better off under John Howard than they are now, with what is happening to them. Working families now, under the government, are certainly worse off. Working families now are certainly paying more for fuel. Working families now are certainly paying more for groceries. Working families now have to deal with the tourism industry that is in decline. Working families now have to deal with the impost of ridiculous taxes that the government are trying to place on them, such as the alcopops tax. Working families now have to deal with the ridiculous issue of changes in the Medicare levy surcharge that is coming forward, so more people are going to be pushed into public hospitals and working families will not have the capacity with the problems they have got. The government are going to make the problems worse. These are the sorts of issues that I believe are coming into clear focus for working families—what the world looks like now under Mr Rudd and the Labor government. That is why it is important that, with this piece of legislation, we clearly understand that this will become yet another impost—another mechanism that will make things worse for Australia.

I can understand it, especially around the unfortunate circumstances of September 11 and the increase in charges that was required to maintain the security of our airports. That is understandable. One now has to ask, with regard to the capital that is currently in place: do we see a greater reason for this sort of increase in the charge? It will be another $106.3 million in 2008-09 alone. Sometimes in this job these numbers just roll off the tongue. We have to understand that when that money disappears—because there is an opportunity cost—from places such as North Queensland, shops go out of business, tourism operators go out of business, and there are a whole range of things. You give the people who have the smarts in the industry—the tour operators in Japan, the tour operators in China, the tour operators in the Middle East, the tour operators in Europe—another reason to select another destination. And when they select another destination, that is another amount of money that is taken out of the Australian economy, not to be replaced.

In closing, I would say that you have to be extremely careful, especially in the north of our great state of Queensland, of the sorts of unforeseen implications of policy from certain pieces of legislation. These unforeseen outcomes may not be apparent when the ink is on the paper, but become very apparent for the people of those areas when the rubber hits the road. The rubber has hit the road for the tourism industry, and there are other issues on the horizon for North Queensland and other areas that we need to be completely aware of. Even though the government has to, I suppose, run the show and it has to get its appropriations through, I think that this bill before us is not good law.

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

In the absence of Senator Conroy—he may attend the chamber shortly—I will attempt to sum up for the government. The government did understand that Senator McGauran was going to speak, and I now understand that he has decided not to speak at the last minute.

In relation to a couple of issues raised by Senator Fisher and Senator Joyce suggesting this is just a tax, the advice I have received is that passenger movement charge is a cost recovery levy imposed under a taxation act, rather than a fee-for-service levy. The PMC was reclassified as a tax in the MYEFO, based on ABS classifications. Revenue raised by the passenger movement charge is paid into consolidated revenue, as are other tax receipts, and it is not hypothecated to the Australian Customs Service, the Department of Immigration and Citizenship, the Australian Quarantine and Inspection Service or the Australian Federal Police. If the chamber does not mind, I will yield the floor to Senator Conroy, who, I am sure, can sum up much more eloquently than I.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

You were doing pretty well, Senator Wong.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

She was doing an excellent job.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

There is nothing more that you can add, Steve.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

There are a few things I can add.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

We always enjoy hearing Senator Conroy’s dulcet tones.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I know that you mean that, Senator Brandis. I note that the matters raised in debate were similar to the comments raised by the opposition senators in their report. Customs have provided detailed figures in their submissions to the committee, indicating what is spent on processing passengers. They have been very transparent about it—so, that information has been supplied. The government will not be deferring or abolishing the commencement of the charge. As said in the other place, and reiterated in the standing committee report, this is a measured increase in line with CPI. Moreover, it will assist with the huge cost of aviation security necessary to ensure the safety and security of tourists, and Australia’s reputation as a safe destination.

The Customs budget is around $1 billion this year and, like all agencies, it has been asked to achieve some efficiency savings. The efficiency dividend that will apply to Customs has been more than offset by the injection of $16 million, following an election promise by the government, to provide increased capacity for Customs to inspect cargo at four important regional ports: Darwin, Newcastle, Launceston and Townsville.

I want to thank all senators for their contributions to the debate and look forward to the bill passing.

Question agreed to.

Bill read a second time.