Tourism industry demands major tax review, as wages and charges hit hard

Australian tourism businesses are calling for a tax review, as a new survey shows high wage costs, taxes and government charges are becoming bigger concerns than ever before.

Tourism companies facing tough trading conditions are also being urged to expand their services into regional Australia to combat the higher costs.

Research conducted by the Victorian Tourism Industry Council has found the biggest concern for the industry is wage costs, with 68% of businesses identifying this as a moderate or significant constraint on their business.

VTIC chief executive Dianne Smith told SmartCompany concerns used to primarily be about driving demand in the sector.

“People still certainly did talk about demand as a factor, but we infer from these results there’s been a slight shift in the main concerns of these businesses.”

Smith says given the 24-hour nature of tourism, high wage costs were not a surprising concern.

“For some operators, keeping up with wage requirements makes running a successful business really difficult. We urge both parties to take this into consideration in the upcoming federal election,” she says.

Taxes and government charges also ranked highly, with 60% of businesses saying they were a constraint on their business.

Tourism and Transport Forum spokesperson Rowan Barker told SmartCompany taxes and a lack of reinvestment are the number one concerns for the sector

“Ideally we’d like the next federal government to freeze and remove the passenger movement charges. It’s had a significant increase of 45% over the past few years and there has been no quid pro quo and no additional investment in the tourism sector,” he says.

The current charge is $55 for any person leaving Australia.

“This generates around $1 billion a year. Originally it was designed to pay for passenger processing at airports, which only costs around $250 million a year,” Barker says.

“Reinvestment in the industry would be good. Tourism Australia’s funding is currently lower in real terms than six years ago.”

More than 57% of respondents also said poor consumer confidence had a moderate or significant impact on their business.

Smith says these results indicate the cost of doing business is a genuine threat to tourism.

“Our industry is mightily resilient and very optimistic about the future, but we do need these constraints to be understood and addressed,” she says.

Within Victoria there are more than 70,000 tourism businesses, many of which are small businesses, and tourism businesses employ around 117,000 people.

Smith says while the survey was just of Victorian businesses, these views are reflected, and sometimes compounded, across Australia.

“In other states, particularly Western Australia, there are also added concerns about the availability of labour in the mining sector, so workers in this state generally have to be paid more,” she says.

Smith says furthering regional tourism offers the greatest opportunities for the sector.

“Regional tourism full stop has so much to offer. We’ve been discussing opportunities around regional events, the opportunity for linking tourism with agribusiness and the food and wine sector and generally highlighting regional cultural and natural attractions,” she says.