True Blue Migration Services has welcomed the Government’s decision to review its ‘backpacker tax’ plans.

Background

The federal budget last year announced the Government’s intention to stop people on Working Holiday Visas from accessing the tax-free threshold of $18,200 as of July 2016. If changes go ahead, backpackers will be taxed at 32.5% from the first cent earned.

The proposal triggered outrage from the agricultural and hospitality sectors, with industry leaders claiming the change will lead to labour shortages.

A possible U-turn was signalled last week with the announcement of a review headed by Tourism Minister Senator Richard Colbeck.

Mr Colbeck said the review had been triggered by “legitimate concerns” about the impact the changes would have on the country’s global competitiveness and its ability to continue attracting backpackers.

“The backpacker workforce is vital to two of our key super growth sectors — agriculture and tourism,” he said.
“We have therefore decided that the proposed tax arrangements require further discussions to ensure Australia does not lose market share in backpacker visitation.”

True Blue Migration Welcomes Review

True Blue Migration Directors Joy Hay and Maryanne Gruar said there would be disastrous consequences if plans went ahead.

“Let’s not forget that Working Holiday Visa holders are tourists as well as workers. The majority of their earnings are invested back into the Australian economy.

“The number of backpackers coming to Australia has already dwindled in recent years, these changes would be the final nail in the coffin. Why would a backpacker want to pick fruit in 40 degree heat and hand a third of their pay to the taxman when they can travel / work in Europe and pay a normal rate of tax?

“We must also remember that many backpackers are highly skilled university graduates who have a great deal to offer Australian employers. Lots of Working Holiday Visa holders who come here decide to remain in Australia and apply for other visa types, plugging skill gaps along the way.

“We speak every week to Australian employers who are stressed and frustrated because they can’t find suitable workers, particularly in the hospitality sector and regional areas.”