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Government must clarify future of backpacker tax

May 16, 2016 Business News No Comments Email Email

As hundreds of Australia’s tourism businesses converge at the country’s biggest annual travel and tourism B2B event, the Australian Tourism Exchange (ATE), the industry needs clarification on the future of the potentially destructive ‘backpacker tax’, due to be introduced the day before the Federal Election.

“Tourism suppliers from across the country – including a large number focused on servicing the backpacker and youth market – are heading to the Gold Coast next week to sell Australia to the world,” ATEC Managing Director, Peter Shelley said.

“Unfortunately they have been left wondering what the future of their market will be with the Government sending conflicting messages on the implementation of the ‘backpacker tax’.

“Australia is in limbo, with the Deputy PM saying the issue needed to be resolved and to ‘watch this space’, and meanwhile the industry will be putting on a brave face as it pitches ‘Destination Australia’ to international buyers.

“There are many voices, including the Opposition’s Tourism spokesman and Queensland Parliament, along with many members of the National party and regional MPs who are against this tax and voicing their concerns.

“The Government needs to clarify this issue fast.”

ATEC established its Backpacker Youth Tourism Advisory Panel (BYTAP) over 20 years ago to act as a vehicle to represent the interests of the backpacker segment to the industry, government and the community – recognising its importance to the overall tourism offering of Australia.

“There is now a common consensus held by BYTAP members that this tax will crush this industry segment.

“The backpacker market has traditionally been a strong segment and it opens the door to many young people who return time and again throughout their life, so it needs to be recognised and nurtured to build its potential.

“We already have reports that a significant number of working holiday maker staff have left Australia to work and travel in New Zealand with the impending tax changes fuelling decisions to switch destinations. With the marginal tax rate increasing to 32.5% from the first dollar on 1 July, backpackers are looking for alternatives.

“This tax will send our backpacker market directly into the arms of our New Zealand competitors who offer 10% tax and a visa that only sets them back $AUD 187, compared to $440 for an Australian visa.

“We urge the Turnbull Government to make an informed choice by retracting this retrograde tax and in doing so, supporting its commitment to jobs and growth, especially in regional Australia”.

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