You’ll Soon Pay More to Leave Australia

The Australian government will increase the Passenger Movement Charge payable when departing Australia to $70 from 1 July 2024.

The government did not give a specific reason for raising the Passenger Movement Charge, but noted that it was “broadly in line with inflation”. According to budget papers, the government expects to make an extra $520 million in tax revenue over the next five years due to this increase.

The Passenger Movement Charge was first introduced in 1995 to help fund immigration, customs and biosecurity services at Australian airports. Originally set at $27 per passenger, the rate has since increased five times and currently sits at $60. Next year’s increase of $10 per passenger will be the sixth time this tax has been increased.

Tax increases may reduce demand for travel to Australia

The Australian Federation of Travel Agents (AFTA) blasted the decision, saying it would reduce demand for travel at a time when the industry is still recovering.

“We know that the PMC does reduce air capacity to Australia and with supply of air seat still tracking 30% to pre COVID levels this will slow down our recovery,” AFTA CEO Dean Long said.

“In the three years prior to the pandemic, the PMC collected on average $811 million more than needed to fund the biosecurity requirements to keep the community and agriculture sector pest free. The Government is now demanding an additional $200m for next year which is unwarranted and not appropriate especially in the current environment.”

Although $10 per passenger may not seem like a huge amount and is unlikely to deter business travellers, it does have an impact at the margins.

In 2019, Jetstar’s executive manager of commercial planning Alan McIntyre told a Routes Asia conference that even a $10 tax increase can affect their customers’ decisions to book holidays.

“[The airfare cost is] a big outlay, even travelling on Jetstar, because you’re travelling on Jetstar and then you’re maybe going on a two-week holiday,” McIntyre said.

“If you’re starting to add more to that, people will stay at home or they’ll travel short-haul. They won’t come. It’s a misnomer in both short-haul and long-haul to say ‘it’s only $10’. Quite frankly, if it was as simple as that, because I run revenue management as well, I’d put $10 on the price and make a bit more money. But I can’t, because it kills demand.”

Australia has the second-highest tax on departing international passengers in the OECD, behind the UK’s Air Passenger Duty.

Australia’s departure and arrival taxes

All passengers aged 12 years old or more are required to pay the Passenger Movement Charge when departing Australia by air or sea, regardless of their intention to return. This tax is included in the cost of all flight bookings.

It’s not the only fee you’ll need to pay when flying out of Australia. Other third-party taxes and fees vary by airport, but for example, you’ll pay a “Australia Passenger Services Charge Departure International” of $32.16 whenever you arrive or depart from Sydney Airport on an international flight.

As an example, a return Air New Zealand booking from Sydney to Auckland would include a total of $212.71 in government taxes and airport fees. These are included in the ticket price, and also include the following charges payable on the New Zealand side:

• A New Zealand Border Clearance Levy (International Arrival) of $41.20
• A New Zealand Passenger Service Charge (International Arrivals) of $33.60
• A New Zealand Passenger Security Charge (International Departure) of $16.00

When redeeming frequent flyer points, you’ll need to pay all of these fees & taxes in addition to the points and any airline-imposed carrier charges.

Matt Graham

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 70 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.