Australia’s Federal Government announced this morning that the proposed tax on backpackers visiting Australia on a working holiday visa would be reduced by 15%.

This means backpackers on a working holiday visa will only have to pay 15% tax on money earned. The move reduces the tax from earlier proposed figures of 32.5% and then 19% in order to get the bill passed by the Senate.

It has taken a long debate to reach this point, a process that has been met with severe disapproval from both Australia’s tourism and agricultural sectors. There is also evidence to suggest the protracted debate has resulted in a drop in backpackers visiting Australia.

Australia working holiday farm

Managing Director of the Australian Tourism Export Council (ATEC) Peter Shelley claims that, anecdotally, backpacker numbers have fallen as much as 25%.

“It’s been a very negative discussion  and our members are reporting right across the board a reduction in working holiday makers coming through, and the agricultural sector is saying the same,” he said.

Margy Osmond, Tourist and Transport Forum CEO, said the 15% tax would help Australia remain competitive with other countries.

The next hurdle for the proposed ‘backpacker tax’ is the Australian senate, and the improved percentage is expected to help the bill make it through relatively quickly. 


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