2016 Budget to drive future tourism growth

4 May 2016

The Coalition Government recognises that tourism is one of five super-growth sectors that will create new jobs and growth in the economy over the next decade. Tourism now accounts for 3 per cent of our GDP, supports one million Australian jobs and drives $30.7 billion in exports.

With the landmark achievement of one million Chinese arrivals in a year and a 43 per cent increase last year in spend from China, there is much to celebrate. Record spend has been achieved from nine key markets including China but also the US, New Zealand, Singapore, Malaysia, Hong Kong, India, Taiwan and France.

For the first time since 2009 we are on track to reach the Tourism 2020 target of doubling overnight visitor expenditure to between $115 and $140 billion annually.

However, we cannot be complacent and need to ensure our policy settings facilitate further tourism growth.

That is why the 2016-17 Budget supports tourism through key measures including:

  • Record funding for Tourism Australia of $629 million over four years.
  • Maintaining the current freeze on the Passenger Movement Charge.
  • No increases to fees for Visitor or Working Holiday Maker visas.
  • The announcement of a premium clearance service to international travellers within international airports, on a user-pays basis.
  • A trial of three-year, multiple-entry visitor visas for India, Thailand and Vietnam to be implemented by July 2016 and for Chile by December 2016.
  • Extending countries eligible for user-pays fast-track premium processing to include India and United Arab Emirates by December 2016 (subject to a preliminary evaluation of the trial currently underway for China).
  • Providing $115 million to Western Sydney Airport to fund preparation work - including $26 million on concept design for rail access and $89m for critical preparatory activities at the airport site.
  • Doing more than ever before to protect our great tourism asset the Great Barrier Reef by providing a $171 million boost to the Reef including an additional $70 million to the Reef Trust, bringing it to a total $210 million.
  • Providing $50 million over 4 years to promote Australian wine overseas and wine tourism within Australia.
  • Tax cuts that will benefit tourism operators - including a cut to the company tax rate for small businesses to 27.5 per cent from 1 July and in recognising that not all small businesses are companies, the unincorporated tax discount will be increased from 5 per cent to 8 per cent from 1 July 2016.
  • Over the next decade the small business tax rate will be extended to all companies and then progressively reduced to 25 per cent by 2026. The unincorporated tax discount will be progressively increased to a final discount rate of 16 per cent from 2026.

Australia welcomed a record 7.5 million international visitors in the year ending February 2016 and this suite of measures will grow that number further.

In particular, the announcements of a premium clearance service and extension of countries eligible to access fast-track processing will increase Australia's tourism competitiveness, increase tourism spending and attract more high-yielding visitors.

These announcements complement the three-year, multiple-entry visitor visa announced for Indonesia in November last year, and a 10-year visitor visa for China that will be available online in Simplified Chinese this year. This will be the first time Australia has trialled visa application lodgement in a language other than English.

With the tourism industry projected to grow at 4.1 per cent per year over the next decade - well above the national average - the opportunities for the sector are immense.

The 2016-17 Federal Budget ensures the industry is well placed to take advantage of the opportunities available for future growth, including in regional areas where 44 cents in every tourism dollar is spent.

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