Government backs off backpacker tax

After industry backlash and pressure from backbenchers, the Government has backflipped on its plan to tax backpacker workers, instead presenting what it says is a new, fair deal.

The plan to impose a 32.5 per cent backpacker work tax, first announced in the 2015 Budget, was not welcomed by Australian farmers, for whom backpackers represent a quarter of their workforce. In the Northern Territory alone, backpackers make up 85 per cent of farm labourers. Many farmers declared the tax would create a disaster come harvest time.

It also split the Government and faced harsh criticism from the tourism industry, as well as many backbench MPs.

The new deal will see backpackers taxed at a rate of 19 per cent.

Within weeks of the Government’s last backtrack on superannuation, there is speculation that the real mover and shaker behind the dumped proposal is Senator George Christensen, with Bill Shorten wondering just who is running the country.

“We’ve just seen this latest backflip from the Government on this backpacker tax, there’s no doubt that George Christensen and the right wing of that party are spelling out the song that Mr Turnbull has to sing,” said Mr Shorten.

The backpacker tax was expected to raise around $500 million. To offset the losses, the Government is changing the Passenger Movement Charge (PMC), increasing the passenger departure tax, which is usually bundled into the cost of transport, from $55 to $60.

Unsurprisingly, this has the Tourism and Transport Forum up in arms, with Tourism and Transport Forum Chief Executive Margy Osmond saying the Government is treating the tourism industry as a “cash cow”.

“This is a long way from fixing the problem, effectively it’s a blatant grab for cash by the Government,” she said.

Mr Morrison is happy that the new deal upholds the integrity of the budget, and the fact that it addresses industry and backbench concerns. Legislation is still required in order to enact the new deal.


What do you think of the new deal? Are you happy to cover the cost of backpacker workers, so they, in turn can support our farmers with lower priced labour? Or would you prefer to see Aussie jobs go to Aussies?

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Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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