The introduction of a new 7.5 per cent tax on short-stay accommodations by the Victorian Government is causing distress in regional communities and tourist destinations.
State Member for Shepparton Kim O’Keeffe has criticised this move, highlighting its direct impact on regional economies.
Ms O’Keeffe said tourism played a crucial role in both local and national economies, with regional areas relying heavily on the financial benefits brought by visitors to support local businesses.
This tax is expected to significantly increase the cost of weekend getaways, possibly by more than $100, making it less affordable for people in regional communities to access services and medical care in metropolitan areas.
“A rate this high could have a negative impact on Victoria’s appeal as a tourism destination, while also punishing everyday Victorians seeking a holiday in their own state, at a time when many are already struggling with cost-of-living pressures,” Ms O’Keeffe said.
“The premier cannot explain how this new tax will do anything to steer housing back to the long-term rental market or address the causes of Victoria’s housing affordability crisis.
“All it will do is make Victoria a less attractive destination for international and interstate visitors, while making it more expensive for visitors to explore the great offerings and events in regional areas and life even more expensive for Victorians.”
In Greater Shepparton alone, total tourism sales in 2021-22 amounted to $216.1 million, with a total value added of $107.8 million.
The local economy has already faced significant challenges due to the COVID-19 pandemic, devastating floods and the cancellation of the 2026 Commonwealth Games, which would have provided a much-needed economic boost.
Given these concerns, Ms O’Keeffe has urged the Victorian Government to reconsider the 7.5 per cent tax on short-stay accommodations and listen to the objections of communities and peak bodies rejecting this policy change.
A government spokesperson said the levy would not affect regional tourism.
“Regional Victoria, including border towns, have great nationally and internationally renowned attractions,” the spokesperson said.
“This will not change because of a modest levy invested back into regional communities to help house more regional Victorians.
“It applies equally across Victoria, with 25 per cent of the revenue to go towards regional Victoria to pay for more and better social and affordable housing.”