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

Hot on the heels of the government's backdown, where it has just moved to amend its own budget, this is the second time today that it will move to do exactly the same thing. It is extraordinary that we are now in a position within this minority government that six weeks after they bring down what is supposed to be the seminal document outlining their priorities for the coming year that we are debating in this chamber for the second time today moves by the government to amend its own document. In this case we are dealing with the increase in the passenger movement charge, which is really just another dodgy tax that they are using to try to cobble together this dodgy surplus that nobody in their right mind believes they will ever achieve.

In this case, they are doing two things. They are increasing the passenger movement charge by $8, from $47 to $55, which means that since the Labor Party came to office they have increased that particular tax by 45 per cent. They are also doing something that concerns the coalition greatly, and which we have moved successfully to get them to cease: they were going to link this particular tax for an annual increase every single year to the CPI. The extra tax on the tourism industry would be indexed to CPI. Every year under the government's proposals announced in their budget—which of course they are slowly abandoning—we were going to see an annual increase on the tourism industry, an increase that was going to affect an industry already struggling because of the lack of confidence in the Australian economy and other factors such as the high Australian dollar. We did not think that was fair and we did not think it was justified, and we joined with the tourism industry to get that measure stopped.

We would have loved to have knocked off this measure completely. The coalition parties do not believe in tax increases. We do not believe in making life harder for small businesses such as those small businesses in the tourism industry. But unfortunately we are faced with the reality of Labor's wasteful spending where they have wasted money—billions of dollars on pink batts, billions of dollars on their border protection debacle, tens of billions of dollars in mailing cheques out to people through the second stimulus package—and because of the wasted money and the appalling fiscal situation that Labor has now got Australia into, we were faced with a situation where we did not think it was feasible to stop the increase from $47 to $55.

If we were in government though, this would not be happening. We would not be levying extra taxes on small business. We would not be levying extra taxes on the tourism industry. We would not need to be doing so because we would not have wasted the money that has forced the government to take these measures in the first place. The government is now reaping what it has sown. The fact that it cannot control its expenditure, the fact that it has wasted so much money, means that it has to run around finding these sorts of savings and increasing these sorts of taxes in a way that the people who are subject to them can ill afford.

I would like to commend the tourism industry for taking this stand against this particular tax. They launched a campaign called Stop Taxing Tourism and they showed that the industry has had it up to here with the incompetence of this Labor government. I particularly acknowledge the Tourism and Transport Forum, the Australian Federation of Travel Agents, the National Tourism Alliance and the Australian Tourism Export Council for their excellent advocacy on behalf of the industries they represent; for saying, 'The tourism industry is doing it hard; we cannot afford these extra taxes,' and for joining with the coalition in trying to get these taxes stopped.

They are also outraged that they have been lied to yet again by this government. This government has a problem with the truth. Increasing this tax is just another grievous example. As recently as 2 March 2012, at a full board meeting of the National Tourism Alliance, the Minister for Tourism told the industry that there would be no increase in the passenger movement charge. Two months later this became yet another broken Labor promise. Sadly, this is a government with a very long history of deceiving the Australian people on everything from the carbon tax to border protection.

The tourism sector is particularly worried about the introduction of the carbon tax. It is one of Australia's most exposed industries with Australian Tourism Export Council modelling showing cumulative electricity prices will go up as much as 30 per cent. Labor has refused to model the impact of the carbon tax on the tourism industry. The change that the opposition are championing here today will at least give this industry some much needed relief by knocking off this budget measure.

The reasons the coalition is proposing to knock off this CPI indexation are many. We do not believe it is a good way of making public policy to have an automatic tax increase for a particular industry. The passenger movement charge itself is already set at a far higher level than the service which it purports to pay for. The government spends about $240 million currently in processing passengers through our major airports, but the total revenue from the passenger movement charge will be $655½ million this financial year and almost $800 million in the coming financial year. This is opposed to the government's own budget estimate for the cost of processing passengers of $240 million this financial year and $230 million the following financial year.

Over the past few years many levies and charges have been added to the passenger movement charge in response to specific measures—for instance, foot-and-mouth disease. There were significant costs associated with processing passengers in and out of Australia when the threat of foot-and-mouth disease existed, so the then coalition government increased the passenger movement charge by $8 to offset that. It is a good example that, no matter which government is in power, there is really no such thing as a temporary tax. Once a tax has been introduced it is very rarely rolled back. Those increases to the passenger movement charge are still in place, but at least they were made in relation to extra costs the government faced in processing passengers to and from Australia.

There is no direct correlation between CPI increases and the increased costs associated with passenger movements. By the government's own figures the cost of processing passengers is going down. This is one of the most insulting things about this bill—at the same time as the government is increasing this tax, the cost is going down because it is ripping money and personnel out of a service it purports to fund. The government has cut, and is cutting, funding significantly for passenger facilitation through our eight major airports. What they are saying to the Australian people and international passengers coming to Australia is: 'You are going to wait longer when you come through our eight major international airports and we are going to charge you more for the privilege.'

The CPI has the capacity to move up and down at varying rates. The fact that the tourism industry could not have any certainty that this tax was going to be in line with CPI in any given year was a cause of great concern for the industry. The tourism industry needs to set prices well in advance. They did not know what this tax was going to be and that created another layer of uncertainty, making it harder for this very significant industry to do business. A government tax that is going to impose an automatic increase on the price of travel to and from Australia, without any regard for the global marketplace or the need for travel and tourism operators to price competitively, is not something the coalition is prepared to support.

Any suggestion that the travel and tourism industry will be in a position to absorb this automatic increase year on year without any other economic factors being considered is a clear demonstration that this government just does not understand the global ramifications and the competitiveness of the travel and tourism industry. It is an insult to an industry that already contributes significantly through a range of other taxes and is, importantly, a key source of employment for Australians.

It is pretty shocking to me and to other members of the opposition that the tourism minister is not actually listed to speak on this bill. He gave a commitment to the tourism industry that the government was not going to increase the passenger movement tax as late as March this year yet he has not deigned to come into this House to explain himself. He is not going to talk on a bill that will clearly have an immediate impact on the industry that he is supposed to support. The tourism industry can draw its own conclusions about the fact that the Minister for Tourism is not prepared to come into the House to address what is a very significant measure within his own portfolio. This is a cause of great concern to the opposition and, quite frankly, leaves its members flabbergasted.

This bill has been thoroughly examined by both houses of the parliament. The House Standing Committee on Economics, which looked into it, was very concerned about the impact the bill will have on the industry. In their submission to that inquiry, the Australian Airports Association wrote that their main request to the government was that it remove the CPI indexation attached to the 17 per cent passenger movement charge increase and that moneys received through the passenger movement charge be directed to funding Customs staff and technology at the primary line. They further said in their submission:

The AAA is most concerned about this indexation due to the impact it will have on Australian tourism. The significant increase to the PMC with indexation attached comes at a time when the industry is incredibly vulnerable.

Airports are at the front line of this Labor government's incompetence. At the same time as the government is increasing the costs associated with people entering and leaving Australia, it is ripping funding away from Customs' ability to process those passengers. As the airports themselves will tell you, this is leading to increasing delays at our major international gateways. They have come to see me about this and they have lobbied the shadow tourism minister extensively about this. They are very concerned about what the government is doing. The government's own KPIs show that the time for processing passengers coming in and out of Australia is increasing, and that is grave cause for concern.

The House Standing Committee on Economics looked into this measure, and the dissenting report by the coalition members explained:

It is evident to the Liberal members of the committee that the Government’s increase of the Passenger Movement Charge (PMC) is patent revenue raising and will effectively be a ‘tax on tourism’. However, for the industry, it could not have been introduced at a worse time.

Specifically in relation to the CPI increase, the Liberal members of the committee said

The indexation of the Charge is patently ill-thought-out and it is further evidence of this being a ‘cash grab’ by the Government. To have the charge increase automatically, serves no other purpose than to generate additional revenue …

Mr John Lee of the Tourism and Transport Forum, who has been quoted extensively in the parliament today, gave evidence to the committee. In his submission he said:

As a minimum, MPs should stop the indexation. There is no other indexation on a tax. In terms of pure philosophical, hard Keynesian economics, you should reject it on that basis alone.

Liberal members of the committee were particularly concerned that this additional charge would only serve to make other destinations more competitive to visitors considering Australia or, for those who do wish to come—if they do come—to make them spend less on discretionary items or services.

Mr John King from the Australian Tourism Export Council gave evidence to the committee pointing out the additional disadvantages Australian tourism operators face in the form of excessive regulation. Mr King said:

As well as battling a high Australian dollar, our tourism exporters have been hit with an almost endless tsunami of government regulation, red tape, the carbon tax, inflexible and inappropriate labour laws and imposed costs, all of which are increasingly destroying our competitiveness. Australia unfortunately is now one of the most expensive and difficult countries to get to and to travel in.

The Labor government seems intent on ruining a core Australian industry—an industry that employs over 900,000 people, representing almost eight per cent of total Australian employment. And this is shrinking as the industry is choked with Labor's penalising measures.

With the emergence of new and highly competitive destinations overseas, Australia's share of global tourism has fallen. Australians heading overseas now outnumber visitors coming to our shores. Since 2008, Australia has slipped from fourth to 13th place in the World Economic Forum Travel and Tourism Competitiveness Index Rankings. The 2012-13 budget did not help the tourism sector to reverse this trend. I know that my friend, the shadow minister for tourism, will be speaking more about the concerns he has for this industry within his remarks. I want to turn my attention—

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