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Crunch-time for backpacker tax

24 March 2016
24 Mar 2016 -
Backpacker tax image

Crunch time: The Federal Government kicked off its formal review of the controversial backpacker tax this week.

TIME is ticking to get changes to the backpacker tax made ahead of the May 3 Federal Budget — and a possible double dissolution election.

The Federal Government kicked off its formal review of the controversial tax this week, when 19 agriculture and tourism bodies gathered in Sydney to make known their concerns about the 32.5 per cent tax on working holiday-makers.

Pressure had been mounting on the Government to reconsider the tax, with horticulture producers fearful it would deter travellers from visiting Australia, potentially wiping out the workforce they relied upon during harvest.

The tax, due to come in on July 1, is expected to bring in $540 million, though doubts have been raised that figure could be reached with already declining backpacker numbers.

Tourism Minister Richard Colbeck last week announced he would head a review to find a fairer but “revenue-neutral” tax option, to be presented to Treasurer Scott Morrison and Cabinet.

While the Government has not set a deadline for the review, Mr Colbeck’s office said it aimed to finish before July 1, while a spokesman for Mr Morrison said the outcome “would be announced in due course”.

But any changes would need to be included in the ­Budget, which Prime Minister Malcolm Turnbull this week moved forward to May 3 as he paved the way for a possible double dissolution.

It leaves six weeks for the review and any changes to the tax to be approved by Cabinet. Parliament will resume on April 18 for an extra three-week sitting.

Apple and Pear Australia chief executive John Dollisson — who attended the Sydney discussions — conceded the pressure was on to get an outcome before the Budget, particularly given it had been moved forward a week.

“Already we’re seeing clear signs that if the tax stays, a lot of the second-year working holiday visa holders won’t come back,” Mr Dollisson said.

“We’re looking at ways to equalise the tax, ways to increase the volumes of backpackers, and now were planning on meeting with the tourism industry to see what else we can come up with.”

Source: The Weekly Times, Australia

http://www.weeklytimesnow.com.au/news/politics/crunchtime-for-backpacker-tax/news-story/b23c40bbc28adfed1c18799b2d337135