Victorian Government flags new tourism tax for Melbourne

Victorian State Minister Daniel Andrews flagged a significant overhaul of Labour’s housing policy on Sunday, including controversial council rates and new rent controls.

Andrews said the potential for a future $5 tax on short-term rentals and hotel reservations in the state is being considered.

The chief executive of Victoria’s peak tourism body weighed in on potential new taxes being considered, arguing the industry should face no further hurdles as it recovers from the shock of the pandemic.

The chief executive of Victoria’s Tourism Industry Board has questioned the state government’s imposition of a new tourism tax.

Felicia Mariani has slammed a possible new tourism tax, saying it “hasn’t been spoken” while the tourism industry is still resigned to the decision to cancel the Commonwealth Games.

“The news of the new tourism tax on Sunday morning was a blow nobody expected,” he told Sky News Australia.

“Everyone is shocked and disappointed that this is even on the table.

“We are now seeing the cost of living pressures affecting people planning their holidays.

“Yes, people are still traveling but spending their money more carefully.”

The news was welcomed by others in the industry, including Airbnb’s Michael Crosby.

“Tourism tax means that every short-term rental booking in Victoria contributes to society,” he said.

“It would work by charging the guest a small fee, about the cost of a cup of coffee, at the time of booking rather than hosts being slugged with higher council rates.

“We have worked with many cities around the world to make this visitor levy work, remitting $USD 7-billion in taxes globally to support much-needed community infrastructure, housing projects, and services.”

Ms. Mariani said that while the state is on the way to recovering, it has “not fully recovered from the trauma of the last couple of years,”

“When we look at our international performances, Victoria is lagging behind the rest of the country in recovering our international tourist spend,” she said.

“This is not the time to put more hurdles before our industry.

“We should be doing everything to get the impediments out of the way so that Victoria can compete aggressively for international and domestic visitation.”

Corporate Keys Australia’s Director of Business Development also added: “The new $5 charge is just another blow to an industry still struggling to pay back significant debts from the covid years. This will not only impact larger Melbourne serviced apartment accommodation providers like ourselves but may have a more significant impact on small mum and dad operators who can not simply increase their rates to cover the new tax”.

Airbnb’s head of public policy in Australia and New Zealand, Michael Crosby, has said the company supports introducing a tax on short-term rentals, empowering short-term rental revenue to contribute to community needs.

“Airbnb is committed to working with state and territory governments to enable local councils to establish a tourism levy applied to all accommodation providers,” he told SBS earlier this year.

Labor is also considering various rent controls, which could limit landlords to one rent increase every two years, along with a cap on increases.

Meanwhile, the Opposition will explore various options to address the rising cost of living crisis by releasing a tax reform paper on Tuesday. Opposition Leader John Bisoto also criticized the new tax proposed by the Labor Party, insisting that steps had been taken to offset previous taxes.

“They would do everything they could to avoid scrutiny of their blatant incompetence and deceit,” he said, “and would gladly pay for the cost of their mistakes by imposing more taxes on hard-working Victorian workers, families, and businesses under unprecedented cost-of-living pressure.”

“Many struggling Victorian tenants deserve deliberate reform from the Andrews government, not out-of-control policies and, of course, more new taxes.”