While the Australian Federal Budget handed down Tuesday night is a mixed bag, with some aspects benefitting the tourist industry, tourism leaders are adamant that one measure stands out as spectacularly dumb.
Despite earlier indications to the contrary, the Government seems determined to push ahead with its decision to raise taxes on backpacker visitors. Industry bodies are determined to fight the measure tooth and nail during the build-up to Australia’s Federal Election on 2 July 2016.
The Australian Government’s decision on the backpacker tax is great news for New Zealand, because young backpackers will be more likely to stay and work there, rather than in Australia. This could hurt Australia more than any money the tax might raise. Young backpackers provide vital seasonal labour for agriculture and the tourism industry.
Both the Australian Tourism Export Council (ATEC) and the Tourism and Transport Forum (TTF) were quick to slam the decision. ATEC said it was “extremely disappointed” over the Government’s determination to force backpacker visitors to pay a marginal tax rate of 32.5% from their first dollar earned.
“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,” ATEC managing director, Peter Shelley, declared.
“Over the past few months ATEC has worked alongside other concerned industry representatives to find alternative solutions to this tax, and we met the Government’s deadlines and demands to work with them on a negotiated outcome.
“Tonight we have had no alternative proposal and, instead, face a further decline in the number of working holiday maker visitors compounding an already apparent labour shortage for tourism businesses in regional and remote Australia.
“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.
“This is an issue which will not go away and one we will be pushing hard during the upcoming election.”
TTF chief executive Margy Osmond said the industry was “bitterly disappointed” that the Government has decided to forge ahead with the controversial measure.
“The Federal Government’s destructive backpacker tax is going to smash the number of people choosing Australia as a backpacking destination when working holiday makers are taxed 32.5 per cent on every dollar they earn on their holiday,” she said.
“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.
“TTF will be actively working during the Federal Election campaign to hold both sides of politics to account to continue the freeze on the Passenger Movement Charge [the departure tax], scrap the backpacker tax, reform visas, boost Tourism Australia and privatise the Tourist Refund Scheme.’’
Written by Peter Needham