The Federal Government has bowed to pressure from industry and dropped its proposed 32.5 per cent backpacker tax plan.
Treasurer Scott Morrison today announced that working holiday makers would be taxed 19 per cent from 1 January 2017 instead of the originally proposed 32.5 per cent.
Further changes to the proposed tax will see the Working Holiday Visa application fee reduced by $50 to $390, an increase in age eligibility from 30 to 35 years, and the ability for workers to be employed by one employer for up to 12 months at two separate locations.
WAFarmers Chief Executive Officer Stephen Brown hailed the government’s decision as a significant win for industry.
“There have been sixteen months of uncertainty since the proposal was introduced in the 2015-16 Federal Budget,” Mr Brown said.
“WAFarmers, alongside the NFF and industry stakeholder groups, have done our part to highlight how the introduction of the backpacker tax would not only harm the agricultural industry, but also tourism and rural and regional businesses, and we are pleased these considerations have been taken on board.
“Given backpackers contribute approximately $3.5 billion to the Australian economy and boost both productivity in the agricultural sector and tourism spending, the original proposal had the potential to cause significant damage.
“I congratulate everyone involved in putting considerable and continued pressure on the government since this issue first came to light during last year’s Federal Budget.”
Mr Brown said while the ideal outcome would be for the tax to be abolished entirely, a reduced tax rate of 19 per cent was a fair compromise.
“Increased competitiveness in application fees and age eligibility will work towards securing a workforce that continues to see Australia as a destination of choice,” Mr Brown said.
“We have always considered a 19 per cent tax rate to be a reasonable concession, and we look forward to working alongside government to ensure our supply of working holiday makers not only continues, but thrives.
“We eagerly await the Federal Government legislation which will clearly outline the full range of changes and the implications.”
All media requests must be directed to WAFarmers Media and Communications Officer Melanie Dunn on (08) 9486 2100 or melan[email protected].