Why the departure tax increase will pass largely unnoticed

Angus Kidman 28 September 2016


You'll pay more to leave the country from July 2017.

In July next year, the departure tax for leaving Australia will go up $5, to $60. Chances are you've forgotten you were paying it in the first place.

The "Passenger Movement Charge" (as it's formally known) is automatically added to the price of international airline tickets when you book them. Under Australian consumer law, it has to be shown in the first price you see, so many people don't realise it has been applied. A survey earlier this year found that 85% of Australians didn't realise the charge exists.

It wasn't always so automated. Back in the 1980s, I remember well the queues of people waiting to pay departure tax at Sydney International Airport ahead of their trip. If you were organised, you could pay it in advance at Australia Post, but many travellers clearly weren't that efficient.

In recent years, paying as part of your ticket has become the norm around the world, so it's always a shock when you suddenly do find yourself having to pay at the airport once again. That's happened to me twice: once in China, and once in Newquay. I'd much rather pay up front within the ticket, though really I'd rather not have to pay at all.

The increased charge is part of a broader suite of modifications to the government's controversial "backpacker tax" changes. The proposal to tax all working holidaymakers at 32.5% with no tax-free threshold was introduced in this year's Federal budget, but delayed after complaints from the agricultural sector that it would result in a drastic shortage of workers.

Under the revised proposal, backpackers will now be taxed at 19%, and most of the superannuation paid by their employers will be "clawed back" when they leave the country. In 2014-2015 there were 214,830 working holidaymaker visas issued in Australia, so a lot of travellers will be impacted.

But that number is still dwarfed by the 18 million people or so people who depart the country each year, all of whom will now pay $5 more. That's a handy $90 million extra in the coffers for the government.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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