Robyn Ironside, The Australian, Thursday 25 June 2026
The federal government is under pressure to delay the start of its departure tax rise, after airlines said they would have to fund the increase unless it was pushed back.
It was announced in the federal budget that the passenger movement charge would rise from $70 to $80 effective from January 1, 2027.
Budget papers showed the increase would raise $755m in additional revenue over the next five years, including $90m for the six months from January 1 to June 30, 2027.
The problem for 59 airlines operating out of Australia is that thousands of tickets have already been sold for early 2027 and they do not incorporate the higher tax.
In addition, airlines cannot simply add an extra $10 to fares sold for 2027 flights, because the carriers cannot collect more tax until any change is passed by parliament.
Airlines for Australia and New Zealand chief executive Stephen Beckett said it appeared no one in the federal Department of Home Affairs considered that the industry sold fares up to a year in advance.
He said that given the profit margin on tickets was now as low as $6.50 per passenger, some airlines could be forced into the red to fund the government’s higher charge.
Travellers leaving Australia already pay one of the highest departure taxes in the world.
Three industry groups have written to Transport Minister Catherine King expressing their concerns about the implementation schedule of the tax, and requested an urgent briefing.
Airlines for Australia and New Zealand, the Board of Airline Representatives of Australia, and the International Air Transport Association said the budget measure amounted to an “irrecoverable industry cost on thousands of seats already sold and ticketed”.
“As the PMC increase has not yet been formalised/gazetted since the budget announcement, it is not permissible for carriers to collect an undocumented charge from consumers,” the letter to Ms King states.
“Until that occurs, airlines can only recover the currently filed $70 PMC. They cannot recover the cost of the increased PMC from already-ticketed passengers.”
The groups expressed disappointment they were not consulted on the increase, pointing out that could have helped avoid this issue.
Late Wednesday, Ms King’s office indicated the government was working on “a path forward” with airlines in relation to the issue.
However, any delay in the tax increase will mean the government forgoes some or all of the $90m in revenue it expected to raise in the first six months.
The last time the tax was raised from $60 to $70 – in 2024 – airlines were given more than a year’s notice.
Mr Beckett hoped common sense would prevail and thanked Ms King for her help, but said airlines were unhappy with the rising PMC.
BARA executive director Stephen Pearse said Australia’s departure tax was already among the highest in the world and the increase could result in more international airlines rethinking future growth plans for services down under.
“Decisions that directly impact passengers by adding a direct cost to airfares should not be made without meaningful engagement with the international airline industry particularly in this challenging global environment,” Mr Pearse said.