Three major tourism industry bodies have joined forces to oppose the Federal Government’s proposed increase to the Passenger Movement Charge (PMC), warning the added cost threatens Australia’s international tourism competitiveness and piles further pressure on regional visitor economies.
Airlines for Australia & New Zealand (A4ANZ), the Tourism & Transport Forum (TTF) and Accommodation Australia (AA) are standing together to oppose the increase and push for policies that strengthen Australia’s standing as an international destination.
Under the 2026 Federal Budget, the PMC is set to rise from $70 to $80 per passenger. From next year, passengers aged twelve and over departing Australia by air or sea will pay the higher charge, with the increase currently before the Australian Parliament.
Tight margins
A4ANZ chair professor Graeme Samuel AC said the hike forms part of a broader wave of cost pressures on airline services. Fuel volatility, higher government levies, increased security and credentialling costs, airport passenger charges, accessibility reforms and sustainability-related policy measures were all adding pressure at once, he said.
“Airlines have been warning governments that piling new taxes, fees, charges and regulatory costs onto aviation will inevitably flow through to higher airfares, fewer services, or both,” Samuel said. “That is not academic; it is the commercial reality of operating routes on tight margins.”
He said the pressure was felt first on thin and marginal routes, including services connecting regional communities and supporting tourism, trade and investment. Airlines had recently cut international routes from the Sunshine Coast and Cairns to New Zealand and between Darwin and Singapore, as well as domestic routes to Uluru, Alice Springs, Wollongong, Mount Gambier, Coffs Harbour, Devonport, Burnie and King Island, he said, all due to rising costs on marginal routes.
“Air travel is not a luxury,” Samuel said. “Governments and regulators need to consider the cumulative impact of these decisions before more routes are lost, competition is weakened and travellers are priced out of the market.”
Recovery stalls
TTF chief executive Margy Osmond said Australia could not afford to make international travel more expensive while the tourism sector was still rebuilding its international visitor base. Australia was competing in one of the most competitive tourism markets at a time of significant global uncertainty, she said.
“Our industry has demonstrated extraordinary resilience, but resilience cannot be the policy response to every challenge our sector faces,” Osmond said. “Tourism businesses, particularly those in regional Australia, have worked incredibly hard to rebuild, invest and deliver exceptional experiences for visitors. We now need policy settings that support that work, not additional costs that make Australia less competitive.”
She noted international visitor numbers had only recently returned to pre-pandemic levels in November last year, and again this past February, but the recovery had steadily fallen since. The focus should be on accelerating that recovery and growing the visitor economy, not adding barriers to travel, she said.
AA chief executive James Goodwin said even a modest charge increase carried weight for travelling families. “Ten dollars may appear relatively small in the context of a Federal Budget, but for a family or group trying to manage the cost of an international holiday, every additional expense matters,” Goodwin said.
He said the increase made Australia a more expensive destination and sent the wrong signal at a time when the country needed international visitor growth. Australia already faced the disadvantage of being a long-haul destination for most international visitors, he said, and the increase added to the total cost of visiting.
“Australia cannot simultaneously say it wants to grow its visitor economy while continually increasing the cost of coming here,” Goodwin said.
“If government insists on collecting more from international travellers, that additional revenue should at the very least be reinvested in tourism and a faster, more seamless Australian border experience.”
The three organisations are calling on the Federal Government to prioritise policies that improve Australia’s international tourism competitiveness.
