VOTERS will have their say on the controversial backpacker tax after the Federal Government yesterday shelved the measure for six months in the face of strong opposition from the agricultural sector.
The issue went unchecked in the recent Federal budget but Assistant Treasurer Kelly O’Dwyer yesterday granted backpackers a six month reprieve from the changes which were set to take effect from July 1.
The government planned to tax backpackers at a rate of 32.5 per cent from their first dollar earned and make them ineligible for the $18,200 tax-free threshold.
If the Coalition is re-elected, it will instead launch a “whole of government” review examining how working holidaymakers should be taxed.
A reviewed tax regime for backpackers could still be implemented by January 1 next year.
Yesterday’s announcement came amid growing concern from the agricultural industry that an increased tax rate would deter backpackers from seeking employment in Australia, creating a labour shortage.
Member for Mallee Andrew Broad welcomed the decision to delay the changes and reiterated his previous stance for a tax rate lower than the changes originally proposed by his government.
“Everyone (in the agricultural industry) thinks (backpackers) should pay something but 32.5 per cent was always going to be too high,” he said.
For more on this story, pick up a copy of Wednesday’s Guardian (May 18, 2016).
