Federal Government announces delay on controversial backpacker tax

Industries welcome delay

Tourism and agricultural industry groups have welcomed an announcement by Assistant Treasurer Kelly O’Dwyer that the Federal Government will delay the proposed July 1 introduction of the controversial ‘Backpacker Tax’.

Chief executive of the WA Tourism Council, Evan Hall said delaying the tax until January 2017 was a positive step but warned a resolution was needed soon to avoid further damage to Australia’s appeal to backpackers.

“This reprieve has only been granted due to the election campaign. We need a proper review and a true economic assessment of the impact of the tax on regional WA,” Mr Hall said.

“The threat of the tax makes WA, and Australia in general, far less competitive as a destination for the backpacker workforce and leaves many businesses without options for their labour force.

“Each year, 38,000 visitors come to WA for a working holiday and stay an average of 121 days and spend an estimated $265 million in the State.”

Vegetable industry body AUSVEG deputy chief executive Andrew White said the tax would have a severe impact on agricultural industries regardless of when it was introduced. 

“Australian vegetable growers rely on backpackers to offset domestic labour shortages and perform the high amounts of manual labour needed in vegetable production,” Mr White said. 

“Whether the tax is introduced at the currently proposed level now or in six months, the effect will be the same; it will threaten the availability of this vital labour source and leave growers unable to get crops off the field.”

Margaret River Business Centre director Barbara Maidment raised concerns over the impact the drop in backpacker numbers would have on other industries.

“What this drop will do to all the tourism operators who cater to the kind of experiences that backpackers like to be involved in, like sky diving, scuba lessons, wine tours and so on.

The Government confirmed yesterday that the tax would be deferred until January 2017 pending a review.