Australians travelling overseas will pay more from next year after the Albanese Government used the 2026-27 Federal Budget to increase the Passenger Movement Charge from $70 to $80.
The charge, often included in the cost of international airline and cruise tickets, applies to passengers departing Australia by air or sea unless an exemption applies. The new rate will take effect from January 1, 2027, and is expected to raise an extra $755 million over five years.
Budget papers also show the Government will align the calculation date of the charge to the passenger’s departure date, rather than the date the ticket was sold. A six-month transition arrangement will apply for carriers where tickets have already been sold.
The increase means holidaymakers, migrant families visiting relatives overseas, business travellers, international students and cruise passengers will all face higher costs when leaving Australia.
The move comes despite the Government framing the Budget around cost-of-living relief, fuel price pressure and economic resilience.
Treasurer Jim Chalmers told Parliament the Budget was designed to help Australia through a period of global instability.
“This is the most important and ambitious Budget in decades,” Dr Chalmers said.
“Important because the world is throwing a lot at us, and this Budget is about helping Australia deal with these challenges.”
He said the conflict in the Middle East was “pushing up prices, pushing down growth, and punishing Australians”, adding that the Budget was aimed at helping the country become “stronger, fairer, more productive and more resilient”.
The Government has said it is delivering cost-of-living support through tax relief, fuel measures, cheaper medicines and health funding.
“People are under pressure, we recognise that, and we’re doing something about it with more cost-of-living relief in the Budget, including a new tax cut for Australian workers,” the Government said in a Budget media release.
But the travel and tourism sector has reacted sharply to the higher departure charge, warning it will add pressure to families and weaken Australia’s competitiveness as an international destination.
Tourism and Transport Forum chief executive Margy Osmond described the decision as “an absolute shocker for the tourism industry”.
“We’re outraged that the Government has decided to make travel even more expensive, when operators are already under enormous pressure from the ongoing fuel crisis and surging operating costs,” Ms Osmond said.
“For a family of four, that’s $320 they’ll soon have to pay in tax as part of their airfare.”
Ms Osmond said the industry had been working with the government on border reforms and was frustrated that the Budget did not clearly direct the extra revenue towards modernising Australia’s airport and port systems.
She said,
“It’s inconceivable that none of the extra revenue that’s going to be collected from this tax hike looks set to fund the urgent border modernisation we have been calling for.”
The Australian Airports Association also criticised the increase, saying the Passenger Movement Charge already raises about $1.4 billion a year, but only about half is used for border management.
AAA chief executive Simon Westaway said the tax rise risked adding pressure at the wrong time.
“At a time when household budgets are already stretched, any increase to this passenger tax needs to be carefully considered because it risks making overseas travel more expensive for regular families wanting to take a holiday,” Mr Westaway said.
“If passengers are being asked to pay more, it is essential that the additional revenue is reinvested in tangible border upgrades rather than being absorbed into consolidated revenue.”
Mr Westaway called for the Government to digitise the paper Incoming Passenger Card and invest in more SmartGates, biometrics, digital declarations and Australian Border Force resourcing.
“Our competing neighbours, including New Zealand, Indonesia and Singapore, are already delivering a far better border experience than us,” he said.
Cruise Lines International Association Australasia also warned the increase would make Australia less attractive for cruise operators and passengers.
“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.
“Australia already charges travellers some of the highest fees in the world, increasing the cost of international travel and creating a disincentive for overseas visitors.”
The Australian Travel Industry Association took a more cautious position, saying the increase was disappointing but would be judged against whether the Government delivered promised border improvements.
ATIA chief executive Dean Long said many Australians did not see travel as optional.
“For many Australians, travel is non-discretionary, whether it’s seeing family, travelling for work, or a long-planned holiday,” Mr Long said.
“Cost pressures are real, but travel holds its place even when household budgets are stretched.”
A spokesperson for Trade and Tourism Minister Don Farrell told SBS News the Government “remains committed to ongoing modernisation of the border” and argued previous small increases to the charge had not had a measurable effect on international visitation.
The spokesperson said short-term international arrivals increased after the previous $10 rise, from 7.97 million to 8.40 million visitors.
The debate over the charge comes as airlines and travellers are already facing higher fuel costs, global uncertainty and inflationary pressure linked to the Middle East conflict.
Dr Chalmers said Australians were paying “a hefty price” for the war, at the bowser and beyond”, with Treasury expecting inflation to peak around 5 per cent in the middle of the year because of the conflict.
For travellers, the Budget measure means the cost of leaving Australia will rise again from January, even as the Government insists its broader economic plan is designed to ease pressure on households.
For the tourism sector, the central question is now whether the additional revenue will fund better border technology and faster passenger processing, or simply become another cost folded into already expensive international travel.
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