What the Federal Budget Means for Tourism Businesses

04 May 2016

Last night's Federal Budget focuses on the future while providing real help right now for more small and medium enterprises and its investment in tourism will help Australia to attract more international visitors and support jobs and growth in the sector.

Maintaining funding for Tourism Australia is a key commitment, which will pay dividends for the whole economy. Tourism Australia has been allocated core funding of $140.3 million in 2016-17. Total net funding for Tourism Australia is expected to be $176.3 million compared to $175.7 million in 2015-16. A decrease of $4 million in funds from Government is expected to be made up by funds from industry sources.

The Government will also provide $50 million over four years to the Australian Grape and Wine Authority to promote wine tourism within Australia and Australian wine overseas to benefit regional wine producing communities.

The Government sends a positive message to inbound tourists, by honouring its commitment to freeze the Passenger Movement Charge at $55 a head. Keeping upfront taxes and charges as low as possible is critical for promoting tourism and ensuring our visitors have more to spend when they are here.

The establishment of a premium border clearance service which has been advocated by the sector, a user paid service that will help to attract more high-spending visitors to Australia.

These initiatives reflect the fact that tourism is a star in an otherwise sluggish economy, creating many jobs and supporting our balance of trade. Every dollar invested in tourism marketing and developing our product delivers several dollars of returns to the economy and the Government.

About 1 in 20 Australian jobs is in tourism, following strong employment growth over the past year, it is vital that Government policies support tourism growth rather than strangle it.

It is disappointing that there has been no shift on the Government’s proposed tax increases for working holidaymakers, also known as the Backpacker Tax. The current proposal will lead to labour shortages in tourism, hospitality and agricultural businesses, particularly in regional areas, and see travellers choosing other competing destinations.

The Tourism Demand Driver Infrastructure Program continues into the new financial year.

Export Market Development Grants remain at $137.9 million for the coming year.

The Industry Skills Fund will be cut although $207 million over 5 years is still available.

The government is committed to reducing the company tax rate over the next decade, providing benefits for small and medium enterprises, and at the same time providing practical measures to help people become job-ready and give them a path to meaningful work.

Lifting the small business entity threshold from $2 million to $10 million turnover from 1 July 2016, will provide more businesses with access to benefits such as accelerated depreciation.

Reducing income tax through increasing the 32.5 per cent threshold from $80,000 to $87,000 will mean consumers have more discretionary spending available.

Training to work initiatives will give businesses access to youth workers with financial incentives.


SATIC is a member of the Australian Chamber of Commerce, the Australian Chamber's Budget In Depth publication provides you more detailed information on what has been laid out in last night's Federal Budget.

If you have any questions, I invite you to contact me or leave a comment below.

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