In defence of the Passenger Movement Charge

And a call for much needed reform

The Australian Federal Budget was read in parliament last week and the Passenger Movement Charge (PMC), ostensibly the international departure tax was increased from $70 to $80. The commentariat jumped on this decrying how it’ll now cost a family of four a total of $320 to leave the country. How outrageous?!?!

While the headline in that article is provocative, the article itself is pretty good, highlighting the industry response. As expected, they criticised the move and we don’t blame them (see here, here). Global fuel prices are pushing up costs for airlines, leading to increased prices and demand destruction. The timing couldn’t come at a worse time for airlines.

Some of the framing has been absurd, for example some resorting to calling it a “big new cost”, despite the PMC having been around since at least 1978 (and probably earlier in some form or another). It was introduced at a rate of $10 in 1978, equivalent to $65 in 2025. While the PMC has increased quicker than inflation it’s hardly a “big” increase or “new”.

Analytic Flying isn’t a political blog and we try to avoid politics at all cost. We have political views, but they aren’t interesting to our readers, so we leave them at the door. Today’s post isn’t about the politics of the PMC, but the economics of it. We’re here to talk policy, not politics!

To some extent we write in defence of the PMC, but also in criticism of its regressive and distortionary structure, arguing for much needed reform!