Backpacker Tax – No U-turn but concessions made.

The Australian government have finally announced concessions to the proposed “Backpacker Tax”.

Scott Morrison, Treasurer announced the government would impose a 19% level of tax from the first dollar earned instead of the proposed 32.5%  He also announced a drop in the cost of a working Holiday visa, reducing it from $440 to $390

Treasurer Morrison said these changes were designed to encourage backpackers to come to Australia as they were an “important source of labour for the agricultural sector”.   He also added that The new rate of tax was “commensurate” with the likes of Canada, the UK and New Zealand.

The announcement has split opinion amongst agricultural and tourism groups with The National Farmers’ Federation chief executive, Tony Mahar, happy at the announcement and said that this is “really important for the growth of the agricultural sector”.  However Margy Osmond of the TTF,  suggested this was still a “cash grab” by the government but still welcomed some of the key concessions.

In his statement the treasurer also highlighted some other key points, including the age limit increased from 30  to 35 and that employers could employ working holiday makers in different areas during the 12 month period  He also added that Tourism Australia would be given an addition $10millionAUSD to specifically promote the country to potential working holiday makers.

Summary of the Treasuer’s Announcement

-19% tax from first dollar earned
-95% of super taxed
-Age limit increased to 18-35
-Working Holiday Visa Fee dropped by $50 to $390AUSD
– Exit Levy increased by $5

– Tourism Australia to be given $10million to promote WHV and specifically target backpackers

One major positive thing from this announcement is that the period of uncertainty is over and that backpackers can now make informed decisions on their travel plans.

Is this a good deal? could more be done? Have your say, get in touch and let us know.

2 thoughts on “Backpacker Tax – No U-turn but concessions made.

    • October 24, 2016 at 4:39 am
      Permalink

      When the traveller leaves Australia, 95% of the super they have paid will go back to the government meaning they can only claim 5% of it back instead of around 30-35% they can currently claim.

      Reply

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