Aviation Consumer Protection Levy (Collection) Bill 2026: how it would fund airline passenger protections

The short answer

Aviation Consumer Protection Levy (Collection) Bill 2026: how it would fund airline passenger protections

The Aviation Consumer Protection Levy (Collection) Bill 2026 is a Government bill from the Infrastructure, Transport, and Communications portfolio that proposes to establish the collection mechanism for a levy imposed on airline operators. The levy would fund Australia's new aviation consumer protection framework, including an Aviation Consumer Protection Ombuds or equivalent dispute resolution body. Introduced in the House of Representatives as a companion bill to the Aviation Consumer Protection Bill 2026, it has passed the lower house and is now before the Senate in the 48th Parliament.

This is a federal system guide. State constitutions, parliaments and local-government laws can allocate comparable functions differently.

The useful question is not only “what is the rule?” but also “who administers it, which document controls it, and when might it change?” That distinction prevents an accurate general explanation from becoming wrong advice in a particular election, chamber or policy setting.

Evidence review

What the bill proposes at a glance

The Aviation Consumer Protection Levy (Collection) Bill 2026 is a Government bill introduced as a companion to the Aviation Consumer Protection Bill 2026. Together, these bills form the legislative backbone of the Australian Government's aviation consumer protection reforms. While the primary Aviation Consumer Protection Bill establishes the substantive consumer rights, complaint-handling mechanisms, and an independent dispute resolution body (such as an Aviation Consumer Protection Ombuds), the Levy (Collection) Bill provides the funding mechanism.

The bill is currently before the Senate after having passed the House of Representatives. It falls under the Infrastructure, Transport, and Communications portfolio. The levy would be imposed on operators in the Australian aviation industry—primarily airlines operating domestic and international services to and from Australia—and the funds raised would be directed to covering the costs of the consumer protection framework, including the operations of the dispute resolution body, enforcement activities, and consumer education initiatives.

The bill is structured as a machinery or collection bill. In Australian legislative practice, a levy or tax is typically created by two or more companion bills: one imposing the levy, another establishing the collection and administration mechanism, and sometimes a third dealing with the regulatory framework that the levy funds. The Levy (Collection) Bill is the administrative vehicle that sets out how the levy is assessed, collected, remitted, and enforced.

Evidence review

Why Australia needs an aviation consumer protection levy framework

The bill forms part of the Government's response to longstanding concerns about the adequacy of consumer protections in the Australian aviation sector. In recent years, high-profile incidents involving flight cancellations, delays, denied boarding, and lost luggage have highlighted gaps in the existing consumer protection framework. Unlike jurisdictions such as the European Union (which has EC 261/2004) and Canada (which has the Air Passenger Protection Regulations), Australia has not had a dedicated, legislated scheme requiring airlines to provide minimum standards of compensation and assistance to passengers.

Currently, consumer complaints about airlines in Australia are handled through general consumer law—primarily the Australian Consumer Law (ACL) and the oversight of the Australian Competition and Consumer Commission (ACCC). There is no aviation-specific ombudsman or mandatory compensation scheme. The Government committed to establishing an independent aviation consumer protection framework ahead of the 2025 federal election, and the two 2026 bills represent that commitment being legislated.

The levy model means that the cost of the new consumer protection framework is borne by the aviation industry itself rather than general government revenue. This 'industry-funding' model is comparable to how other regulated sectors—such as telecommunications (Telecommunications Industry Ombudsman) and financial services (Australian Financial Complaints Authority)—fund their external dispute resolution bodies.

Evidence review

How the levy would be structured and collected

The Levy (Collection) Bill sets out the administrative machinery by which the levy is assessed against airline operators and collected. While the precise levy rate and calculation method are typically set out in the imposition bill (the Aviation Consumer Protection Levy Bill which sits alongside this collection bill), the collection bill establishes the procedural framework: who is liable for the levy, when levy payments are due, how amounts are assessed, how records must be kept, and what enforcement powers the Commissioner of Taxation—or another designated Commonwealth agency—would have in the event of non-payment.

Based on comparable industry-funded ombuds schemes, the levy is likely to be calculated by reference to passenger numbers (such as a per-passenger charge on domestic and international flights) or airline revenue. The Aviation Consumer Protection Levy (Collection) Bill would require airline operators to lodge periodic returns, pay the assessed levy by a specified date, and maintain records sufficient to enable verification of their levy obligations.

The bill would also contain penalty provisions for late payment or non-payment of the levy, as well as for failure to lodge required returns or keep adequate records. These would likely mirror the general interest charge and administrative penalty frameworks used elsewhere in Commonwealth taxation law.

Evidence review

Relationship with the Aviation Consumer Protection Bill 2026

The Levy (Collection) Bill cannot be understood in isolation from the Aviation Consumer Protection Bill 2026, with which it was introduced as a package. The primary bill would establish the Aviation Consumer Protection Ombuds (or equivalent body), define the consumer rights that attach to air travel (such as rights to compensation for cancellations, delays, and denied boarding), and set out the complaint-handling and enforcement framework.

Together, the two bills would create a self-contained regulatory ecosystem for aviation consumer protection: the primary bill creates the rights and the institution, while the levy bill ensures that institution is sustainably funded by the industry it regulates. The collection bill would link to the primary bill through cross-references to the body being funded and the scope of its operations.

If the levy bill were to fail while the primary bill passed, the consumer protection body would lack a dedicated funding source and would need to rely on appropriations or other mechanisms. Conversely, if the primary bill were to fail, the levy bill would have no purpose. This interdependency is typical of companion-bill structures in Australian legislative practice.

Evidence review

Parliamentary scrutiny and industry implications

The bill has passed the House of Representatives, where it was introduced as a Government measure, and is now before the Senate. Senate scrutiny of the bill is likely to focus on several areas: the quantum of the levy and its impact on airline operating costs (and ultimately airfares), whether the levy is structured so that larger airlines bear a proportionate share, and whether the consumer protection framework that the levy funds is sufficiently robust to justify the new cost imposed on the industry.

For airline operators, the levy represents a new statutory cost of doing business in Australia. Larger carriers with higher passenger volumes will bear a proportionally larger share. The airline industry has historically resisted new statutory levies, arguing they increase costs that are ultimately passed on to consumers through higher fares. The Government's counterargument is that the cost is modest on a per-passenger basis and that the benefit—a credible, independent mechanism for resolving consumer complaints—outweighs the cost.

The Senate may refer the bill to the Senate Rural and Regional Affairs and Transport Legislation Committee or the Economics Legislation Committee for inquiry, which would provide a forum for airlines, consumer groups, and other stakeholders to make submissions on the proposed levy framework.

Evidence review

What comes next

If the bill passes the Senate without amendment, it will proceed to Royal Assent along with its companion bill, and the Aviation Consumer Protection framework will come into effect on a date to be proclaimed (or a default commencement date specified in the bill). If the Senate amends the bill, it will return to the House of Representatives for consideration of those amendments. As the bill is a machinery measure, substantive debate is more likely to focus on the companion Aviation Consumer Protection Bill 2026, with the levy bill passing or falling as part of the broader reform package.

Common questions

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