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Tourists slugged for budget repair

One of Australia’s biggest growth industries could hit a speed bump, with the government signalling extra visa fees for tourists.

Visa applications made overseas will now cost as much as applications made within Australia, Tuesday’s federal budget announced.

In the case of China, the cost increase is understood to be around $5.

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Tourism has been a rare bright spot in the nation’s economy, absorbing some of the spare capacity created as the mining boom ends. And its future looks bright.

As China’s economy matures it will cease to build infrastructure at such a breakneck pace. That may mean it buys less iron ore, while at the same time developing a strong consumer culture.

High on the list of consumption preferences for the millions of newly middle class Chinese people is travel.

Recovering economies in Europe and the US are also expected to boost tourist numbers visiting Australia’s natural attractions and spending money in Australian cities.

The Treasurer is highly alert to the need to develop high-value services exports as a way to drag Australia’s economy out of its recent malaise.

“Consider this, if we could lift our services exports like higher education, tourism, health care and financial services to just half the level of our commodity exports, it would add $50 billion to our economy each and every year,” Joe Hockey told parliament on budget night.

But even as the Treasurer talked up the sector, its growth was placed at risk by changes to the cost of visas.

The revenue impact of the change is an extra $400 million in Treasury coffers, but the extent to which it could deter visitors to Australia is unclear.

With the Aussie dollar falling, the tourism industry is in a better position to reap an economic windfall.

Over the last four years, the dollar has fallen from a peak of over $1.10 during the mining boom to under 80 US cents on budget day.

As it fell, international tourist numbers have risen.

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