Kayaks and canoes threatened by new tax dragnet

April 27, 2018

The Federal Government has not committed to legislate against a new tax on businesses hiring out kayaks, canoes, dinghys dragon-boats and small sail boats which the government - or a future government - could apply and drive many smaller operators out of business.

Australian Conservatives leader South Australian Senator Cory Bernardi is backing calls for a permanent exemption to be included in the legislation for all small-businesses which cannot afford to pay the levy.

The Marine Safety (Domestic Commercial Vessel) Levy Bill 2018 will introduce a cost recovery levy which the owners of one kayak and canoe rental operator say would cost them approximately $15,000 in the fourth year, with further annual rises expected after that.

The family-run business, which has been in operation for six years, urged social media followers to write to Deputy Prime Minister and Minister for Infrastructure and Transport Michael McCormack imploring him to establish an exemption for small, family-owned and operated businesses such as theirs.

During the consultation period for the bill, the Coalition Government published that it would exempt kayaks, canoes, dragon boats and small sailing vessels from the levy. There are concerns this exemption will only be by regulation - not included in the Act - meaning the exemption could more easily be removed by a future government.

In short, a legislated exemption is a guarantee - a ministerial exemption by regulation is only a promise.

Without a guaranteed exemption, costs would affect fleet owners disproportionately – for example in 2022-23 a residential camp offering canoeing as an activity with a fleet of 10 canoes being paddled on a small dam on their own property would need to pay $193 x 10 = $1,930 per year.

Whereas in 2022-23 a commercial vessel greater than 45 metres with unlimited domestic (including offshore) operations will pay just $385 per year.

The company wrote:

“This excessive cost per Kayak will be impossible to absorb. Adding this extra cost on to the price of hires and tours will make the cost much more than people are able to pay (including school groups and local community groups), therefore they will be forced to close.

Without this local business being able to provide safety advice and safety lessons, the waterway will become much more dangerous with an increase of unskilled and uninformed paddlers. Safety is Canoe Adventures’ first and highest priority. For most people, the only way they learn kayak and canoe safety is from small local kayak & canoe businesses.

I urge you to re-consider this decision and re-instate the levy exemption on Kayak and Canoe rental operators.”

Outdoors Victoria and other bodies representing canoe and kayak hire companies have sent warnings to their member operators that the Department of Infrastructure and Transport is calling for submissions on the draft proposal by this Monday 30 April 2018 urging them to lodge their objections to the new levy.

Australian Conservatives members are urging people to make submissions to the consultation - even after the 30 April deadline - to urge the government to make the canoes and kayak guarantee in the legislation, not by regulation.

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