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Tuesday, October 23, 2012

ATEC: SWAN'S TAX GRAB YET ANOTHER BLOW TO TOURISM


The future of Australia's tourism industry, and the highly price sensitive youth market, is under threat with reported plans to increase the price of some tourist visas.

"Australia's tourism industry urges Wayne Swan to think closely about the affects any increase to visitor visas will have on our competitiveness in the international market," ATEC Managing Director, Felicia Mariani said.

"This Government needs to look beyond the short-term tax grab and recognise the significant economic benefit created by the tourism economy in this country.

"Any increases in visa costs would be a short-lived budget gain that puts at risk the $27 billion contribution inbound tourism makes to the Australian economy and its potential growth, which is estimated to be over $30 billion by 2020."

Of particular concern to the industry is the reported $70 increase to the Working Holiday Visa (WHV), as part of the Mid-Year Economic and ­Fiscal Outlook (MYEFO).

"This represents a 25% increase that takes the cost of a Working Holiday Visa (WHV) from the current $280 to $350.

"This kind of gouging will have a critical impact on our international competitiveness in the lucrative youth market.

"This increase would be on top of the 17% increase to the Passenger Movement Charge in the recent budget; an efficiency dividend of $34 million to passenger facilitation services of the Customs Department, which has resulted in a cut to front-line staff from our major gateway airports; and levies thrust upon our national airports for security services provided by the Federal Police.

"Australia is already way ahead of most of our competitor countries on fees associated to travelling here, with the WHV fees amongst the highest of most western countries.

"Since 2005, WHV fees have nearly doubled going from $180 to the currently proposed $350.

"In broad terms, over this 8-year period, the result has been a trebling in fees for the Brits – our weakest market – a 2.5 increase for our US Working Holiday Makers and a doubling for the Europeans.

"At the same time, the high Australian dollar has taken a real toll on our performance in the Youth Sector which is only just beginning to show signs of resuscitation.  Adding another tax increase to this fragile part of our industry will put us off the map for many young travellers.

"ATEC has previously outlined to Government the significant potential economic benefits that will flow from improvements to the Working Holiday Visa guidelines which have the capacity to increase annual GDP by over $85 million."

Ms Mariani said the recommended changes have the potential to significantly increase the $2.3 billion dollars already being spent by Working Holiday Makers by around $700 million over a 10-year period.  This contribution would be in jeopardy if the visa fee increases go ahead.

"Most significantly, this decision will impact on regional areas of Australia that heavily rely on tourism expenditure from this sector.   For many of these communities, tourism is the primary economic driver and their tourism businesses are already suffering from recent pressures felt by our industry.

"This proposal will only serve to increase the burden on the businesses and communities that can least afford it."

The current WHV already requires applicants to secure $5,000 in savings to gain entry to the country, plus they must have a return ticket to their home destination – putting Australian requirements well in excess of competitor destinations such as Canada and New Zealand.

"Such a short term measure may bring minor benefit to the Treasurer's efforts to balance his budget, but will deliver maximum negative impact to our industry."

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