In brief
- The passenger movement charge is raising from $70 to $80 in January 2027.
- This hidden charge is paid by everyone who departs Australia -- adding extra cost to travel.
Everyone leaving Australia will have to pay an additional $10 in exit fees when the passenger movement charge climbs to $80 in January next year.
The changes, introduced in the federal budget on Tuesday night, will drive the fee paid by Australians and tourists alike up from $70 to the new rate — a near 200 per cent increase since its introduction in 1995.
It's a move that has upset industry bodies who say the increased fee will dissuade travellers from booking journeys, hampering tourism and the expenditure that comes with it.
While many countries employ similar revenue-raising structures in their tourism sectors, Australia's departure tax is already one of the highest in the world.
The 14.29 per cent increase comes as airlines are facing rapidly rising aviation fuel costs.
The price of oil has climbed 60 per cent over the past year and spiked 12 per cent in March alone following the outbreak of the war in the Middle East.
Airlines such as Qantas and Virgin have previously said that increased fuel costs will have to be passed on to consumers.
With these changes combined, there are concerns that overseas travel could be pushed further out of reach for many.
What is the passenger movement charge?
The passenger movement charge (PMC) is an exit tax levied on every person leaving the country, except in special circumstances. The toll is paid whether the departure is via air or sea.
Introduced under the Keating government, the PMC is an updated version of the departure tax brought in in 1978 to recoup costs associated with passenger processing at Australia's air and sea ports.
At $27 in 1995, the PMC has climbed steadily over the years, often associated or tied to increased expenditure on passenger processing, aviation security, or other travel-related budget costs. This time, however, there was no such mention of how the money would be spent.
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The fee is typically included in international airfare at the point of sale and is often recorded on the receipt after purchase.
Travellers under the age of 11, foreign military, airline staff, and people who unintentionally arrive in Australia for reasons beyond their control are just some of the people who are exempt from paying the PMC.
Passengers are entitled to a refund if their departure does not occur for a variety of reasons.
What is changing?
From 1 January 2027, the government will increase the passenger movement charge by $10, from $70 to $80.
The changes will apply to anyone departing the country after that date, irrespective of when the ticket for travel was booked.
The government states in budget papers that it expects the change will provide an additional $755 million over the next five years.
The new $80 rate remains a flat fee applied to all travellers. This is unlike other countries, where similar exit fees are applied at varying rates.
The United Kingdom, for instance, operates a four-band system based on distance travelled and class of travel. A passenger travelling less than 3,000km in the lowest class can expect to pay £13 ($24.32) while a passenger travelling greater than 8,000km in first class will pay £188 ($351.52).
Tourism industry 'disappointed'
Australia's tourism industry has reacted with frustration and disappointment to the announced changes.
Cruise Lines International Association (CLIA) Australasia has cautioned that the price increase is likely to drive down tourism to the cruise industry at a time when more and more leisure vessels are turning away from the country.
"Increasing the Passenger Movement Charge places yet another burden on travellers at a time when the tourism community is working hard to overcome challenges at home and overseas," CLIA said in a statement.
The group says it has been warning the government about the country's loss of competitiveness in cruising, something it says this fee hike will only worsen.
The Tourism and Transport Forum (TTF), the industry's peak body, has said it has been "blindsided" by the changes and that there was zero consultation with the government.
TTF CEO Margy Osmond told SBS News that the country's customs and border process is in urgent need of modernisation and that efficiency and productivity losses will continue unless investment is made.
"It is not good enough to just slap an additional tax on the travelling public and the tourism industry without improving the conditions that those travellers will be experiencing when they cross the border," Osmond said.
The increased levy is not a cost that can be borne by the airlines, given that it is a per-passenger charge aimed solely at the person travelling.
Wider reform called for
The government has hit back at the suggestion that it will not be using the increased revenue to fund infrastructure and improve traveller experiences at airports and ports.
A spokesperson for Trade and Tourism Minister Don Farrell told SBS News that the government "remains committed to ongoing modernisation of the border".
"Australia's experience has been that relatively small increases to the PMC do not have a measurable effect on international visitation.
"Following the last $10 increase in the PMC, short-term international arrivals increased by 5 per cent year-on-year, rising from 7.97 million to 8.40 million visitors."
Gui Lohmann, professor of aviation and transport at Edith Cowan University, told SBS News that while he does not believe the additional price increase will have a major impact on the volume of people travelling, the government does have a duty to reinvest the money it is raising.
"Clearly, airports like Melbourne need a significant boost in that regard," he said while noting that others such as Perth and Brisbane may not need as much attention. "There is an airport-by-airport situation that has to be dealt with here."
Lohmann, like Osmond, wants to see the country do away with incoming passenger cards — the yellow customs cards filled out on international flights before arrival — something the latter has said could be done at a cost of $25 million, with a complete overhaul of biosecurity procedures working out as "budget neutral" thanks to the savings generated.
"It's unacceptable that that incoming passenger card still exists," Lohmann said. "A lot of countries have already solved this ... there are better ways of doing it."
The government's digital incoming passenger card pilot remains active, after launching on select Qantas flights from New Zealand in 2024 and expanding in 2025 to more international Qantas arrivals into Brisbane and selected trans-Tasman flights into Sydney.
A broader rollout has not yet been confirmed.
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