Announced in the federal budget this week, the federal Government has decided to forge ahead with the 32.5 per cent backpacker tax on working holiday makers.
Backpacker visitors will now pay a marginal tax rate of 32.5% from their first dollar earned, further encouraging them to take their holiday in New Zealand.
“This budget locks in a tax which will deliver a negative result for Australia’s tourism industry and which will drive our backpacker visitors into the arms of our New Zealand competitors,” said Peter Shelley, Managing Director of the Australian Tourism Export Council (ATEC).
Tourism & Transport Forum Australia (TTF) CEO Margy Osmond is also bitterly disappointed with the Government’s decision.
“Working holiday backpackers are a crucial source of labour for tourist operators in remote and regional parts of Australia. These are businesses that are heavily influenced by seasonality and locations where it is extremely difficult to find local or permanent staff.”
Shelley has said that ATEC and other concern industry representatives will be pushing hard on this issue during the upcoming election.
“Australia’s tourism industry will not stand by and watch as the Turnbull Government introduces a tax that sends out a message that working holiday makers are not welcome – a message that is in stark contrast to the growth-focused approach taken by New Zealand.”
But the Federal Budget is not all bad news for Australia’s booming visitor economy.The Coalition has maintained its election commitment to not increase the Passenger Movement Charge (PMC), establish a framework for the commercialisation of the Passport Application Lodgement Service (PALS) while also re-setting the macroeconomic settings to support growth and jobs.
“The Federal Government’s decision to stay its hand on visa fees and the continuing freeze of the Passenger Movement charge at the current $55 rate is good news,” said Ms Osmond.
The Government has also ensured Australians are fairly rewarded for effort and hard work which will see around 500,000 Australian’s avoiding the 37 percent marginal tax rate. This will mean more Australians will have additional discretionary income to spend on domestic and international travel.
With this tax cut, record low airfares and the continued freeze on the PMC, means there has never been a better time to travel.