September 27, 2016
Member for Maranoa David Littleproud says the Federal Coalition has listened to industry concerns by cutting the “backpacker tax”.
“From January 1 next year, the government will set the tax rate applying to working holidaymakers at 19 per cent on earnings up to $37,000 rather than the 32.5 per cent announced in the 2015-2016 Budget,” Mr Littleproud said.
“This is a win for not only producers – who can get their fruit off the tree, off the vine and off to market – but also tourism hubs which rely on this type of labour in the Maranoa.”
Mr Littleproud said he had not supported the backpacker tax as it was presented in the last Federal Budget.
“I do support the Coalition Government’s swift response to review this tax and the consultation process that we undertook,” he said.
“We sought comment and more than 1700 stakeholders made submissions to reach this new outcome.”
Deputy Prime Minister Barnaby Joyce said the change recognised the importance of keeping regional economies strong.
“The Nationals … have been fearless champions on behalf of their regions, their agricultural stakeholders and common sense.
“The decision to reduce the proposed tax rate from 32.5 per cent to 19 per cent tax maintains Australia’s status as one of the most competitive destinations for working holiday makers, while ensuring they pay a fair level of tax.”
The Queensland Farmers’ Federation (QFF) and the Queensland Tourism Industry Council (QTIC) both welcomed the Federal Government backdown.
QFF President Stuart Armitage said that he was relieved the backpacker tax had been revised as it restored the certainty farmers needed to plant and harvest their crops.
“QFF and its industry members welcome the revised 19 per cent tax rate as it is consistent with what we and others in the agricultural sector have been calling for,” he said.
“On behalf of the Queensland agricultural sector I would like to thank the broader community for joining our campaign against the uncompetitive backpacker tax and for the Members of Parliament that spoke up on behalf of their constituencies.”
QTIC CEO Daniel Gschwind welcomed the government’s modifications but stressed that the Australian tourism industry was still challenged to remain competitive in the backpacker market.
“However, the now proposed tax rate which applies from the first dollar earned still positions Australia as uncompetitive compared to Canada, New Zealand and the United Kingdom for working holiday makers,” he said.
The Federal Government also announced on Tuesday that it would extend the eligibility age of the working holidaymaker scheme from 30 to 35 years and cut the application charge for working holidaymaker visas from $440 to $390.
As well, $10 million has been allocated to the Australian Taxation Office and the Fair Work Ombudsman to establish an employer register and assist with ongoing compliance initiatives to address workplace exploitation of working holiday makers, and a further $10 million will be given to Tourism Australia to promote working holiday makers to come to Australia through a global youth targeted advertising campaign.
To help recoup the lost income, government has increased the departure tax (passenger movement charge) by $5 to $60 per passenger.
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While Queensland farmers welcomed the change, the State Government said the “tinkering” to the scheme by the Federal Government was not enough.
Tourism Minister Kate Jones said the Federal Government should have axed the tax.
“Tinkering at the edges will not fix the problem that is the Turnbull Government’s backpacker tax,” Ms Jones said.
“The tax needs to be scrapped all together. We want backpackers to visit Queensland and spend their money in our regional economies.
“Taxing backpackers thousands of dollars is just giving them thousands of reasons not to come to Australia.
“Since the tax was announced we have seen working visa holiday visitor nights down by close to 9 per cent in Queensland.
“We do not want backpackers to choose other destinations like New Zealand and Canada.
“We know backpackers are worth more than $900 million to the Queensland economy and Mr Turnbull is putting that at risk.
“It doesn’t make sense to slug backpackers with a new tax when their contribution to regional economies is so important.”
In the year to June 2016, Queensland recorded 12.3 million backpacker visitor nights down from 13.5 million in the 12 months to June 2015.
The total number of backpackers visiting Queensland dropped from 338,000 to 331,000 over the same period.
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