Federal Budget draws mixed reactions from industry

Australia’s 2026 Federal Budget has sparked mixed reactions within the tourism industry, with the Australian Tourism Export Council (ATEC) calling it ‘disappointing’ for failing to support international competitiveness. The budget reduces Tourism Australia’s funding by $50 million over four years and increases the Passenger Movement Charge by $10, measures ATEC argues send the wrong signal about tourism’s role as a $40 billion export sector amid global travel uncertainty. ATEC Managing Director Peter Shelley highlighted growing pressures on inbound tourism, including softer holiday visitation due to the Middle East conflict and rising travel costs. March arrivals data shows momentum slipping, with international travellers increasingly sensitive to affordability and global instability. ATEC’s member survey reveals 57% of tourism exporters cite traveller hesitation as the top emerging risk, despite strong industry confidence in short-term bookings. Shelley urged the government to treat tourism marketing as a strategic export investment rather than a discretionary cut, warning reduced funding risks Australia’s ability to convert interest into bookings in a competitive long-haul travel market. The industry remains cautious, with forward demand sentiment softening despite stable confirmed itineraries. Accommodation Australia’s CEO James Goodwin described the budget as a ‘mixed bag,’ praising the retention of permanent migration settings but echoing concerns over Tourism Australia cuts and stricter Working Holiday Maker controls. The sector welcomes skilled migration policies but warns tighter visa restrictions could further strain labor shortages in tourism-dependent regions.