How Federal Budget 2023-24 impacts the visitor economy

The Federal Government has delivered its 2023-24 Budget, which Federal Treasurer Jim Chalmers said would continue to strengthen the nation’s finances while laying the foundations for a stronger, fairer and more resilient economy into the future.

In a joint statement, Minister for Foreign Affairs and Trade Senator the Hon Penny Wong, Minister for Trade and Tourism Senator Don Farrell and Minister for International Development and the Pacific Pat Conroy MP said the Federal Government would continue to support the recovery of Australia's visitor economy and fourth largest export earner through the $48 million tourism and travel package.

"This funding is helping tourism businesses attract and upskill workers to address current workforce shortages and improve the quality of Australia’s tourism offerings," the statement said.

The Budget confirmed Tourism Australia's appropriation of $169.1 million for the next financial year.

Tourism Australia CEO Phillipa Harrison said: "Our base appropriation remains above pre-pandemic levels and provides the certainty we need to deliver our program of work for the year ahead. We will target our spend to drive international demand back to Australia from our key markets, and we will continue to support the industry in its ongoing recovery.

"At Tourism Australia we remain optimistic about the opportunities in the year ahead. Now that Chinese travellers are returning we are able to plan for the future with greater certainty, with Working Holiday Makers back we are seeing an easing of pressure on our skills shortage, and with the continued strong demand in the premium sector in particular, we're on track to get back to 2019 visitation and spend levels in the next few years."

Major initiatives will include:The global 'Come and Say G'day' brand and partnership campaign continuing in key international markets, including a launch in China
Premier tourism and trade events including the Australian Tourism Exchange, Marketplace, Dreamtime, G'day Australia, Destination Australia and more
Ongoing support for the Business Events Bid Fund program, with an additional boost of $4 million to support bids for events out to 2029

The Aussie Specialist travel agent training program.

The Australian Tourism Export Council (ATEC) congratulated the Federal Government on retaining funding for Tourism Australia.

“In a highly competitive international travel marketplace, Australia needs to maintain its presence across the board, from existing traditional markets to newly emerging opportunities and a well-funded destination marketing agency is key to doing this successfully," said ATEC Managing Director Peter Shelley.

However, Mr Shelley said Federal Budget measures such as an $10 increase in the Passenger Movement Charge (PMC) plus the increase to application fees for tourism visas were disappointing in the current environment.

“While these individual charges may seem small, the collective impact on the traveller is significant and the industry calls for a freeze on these increases over coming years," Mr Shelley said.

Industry bodies including Cruise Lines International Association (CLIA), the Tourism & Transport Forum (TTF), the Australian Federation of Travel Agents (AFTA) and the Australian Airports Association (AAA) also opposed the increase to the PMC.

BUDGET SUPPORTS ARTS & NATIONAL PARKS

The Federal Budget included a record new investment in Australia’s arts sector, with almost $950 million in additional spending over four years on national institutions, training and supporting creators and delivering on the vision of its new national cultural policy, Revive.

Learn more here.

Additionally, the Federal Government will invest in programs aimed at stopping environmental destruction, repairing nature and restoring damaged ecosystems.

This will include rolling out a second round of the Urban Rivers and Catchments Program; investing in the National Heritage Trust; $45.2 million for the Sydney Harbour Federation Trust; injecting $262.3 million in national parks; and remediating the national flood warning infrastructure network in Australia’s highest-risk areas.

Learn more here.

BUDGET INITIATIVES FOR SMALL BUSINESS

The Federal Budget featured measures to assist small businesses, including a $20,000 instant asset write-off; a new Small Business Energy Incentive to support investments in power-saving assets and new help for small businesses to adopt and adapt to digital technology.

The Small Business Energy Incentive will help small and medium businesses electrify and save on their energy bills. This incentive will provide $310 million in tax relief and support up to 3.8 million businesses make investments like electrifying their heating and cooling systems, installing batteries and upgrading to high-efficiency electrical goods.

Businesses with annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and more efficient use of energy, from 1 July 2023 until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.

The Federal Government is providing approximately 2.1 million eligible small businesses with cashflow relief by halving the increase in their quarterly tax instalments for GST and income tax in 2023–24. Instalments will only increase by six per cent instead of 12 per cent.

The Federal Government is also investing $23.4 million to help small businesses build their resilience to cyber security attacks, while a new $392.4 million Industry Growth Program will help support small to medium-sized businesses and startups develop new products and services to grow their operations.

Learn more here.

BUDGET BOOST FOR SKILLED MIGRATION

The Federal Government has allocated around 70 per cent of places in the 2023–24 permanent Migration Program to skilled migrants to address persistent skill shortages.

It will also provide an extra two years of post-study work rights to Temporary Graduate visa holders with select degrees, to improve the pipeline of skilled labour in key sectors.

The Federal Government is increasing the Temporary Skilled Migration Income Threshold to $70,000 to ensure skilled migration settings are better targeted; exempting international students working in the aged care sector from the capped fortnightly work hour limit until 31 December 2023; and providing additional training places for Pacific Australia Labour Mobility scheme workers in priority sectors for the Pacific and Timor-Leste and where there are job shortages in Australia.

Additionally, the Federal Government is negotiating with the states and territories on a new five-year National Skills Agreement to commence from 1 January 2024. It will also fund a further 300,000 TAFE and vocational education training places to become fee-free.

Learn more here.
BUDGET DOCUMENTS

*Source: Destination NSW