Australia defers backpacker tax hike after rural opposition ahead of federal election

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She agreed with Mr Fitzgibbon that the delay is just an election stunt: “the government’s proposed delay of the tax is a cynical election move to delay the operation of the tax until after the election. The government should abandon the tax now.”

Under the proposal, foreign travellers on working holiday visas would have paid tax of 32.5 percent on every dollar earned from July 1, when previously they paid no tax on income up to AU$18,000 (£9000), the same as locals.

Farmers said the change would discourage holiday workers who make up the bulk of fruit pickers at harvest times, threatening the country’s fruit industry, which is set for record exports of AU$2.27 billion next season.

Australia has encouraged backpackers to work on farms with special visas allowing them to stay for a second year if they do three months work in rural Australia.

But overseas workers had been targeted as an area to raise revenue as Australia looks to rein in ballooning budget deficits.

“[The review] is looking at much broader issues around labour force, particularly in rural and regional communities and how it affects our farmers but also our tourism sector as well,” O’Dwyer said.

Australia’s AU$34.8 billion international tourism industry was also threatened by the higher tax, with young travellers potentially deciding not to stay as long.

In total backpackers spend AU$4.3 billion a year, worth about 12 percent of all international tourist spending.

Australia has long been a popular destination for British travellers, with many seeking out work while there to fund their travels across the country.

British travellers can apply for a working holiday visa which will allow them to stay in Australia for up to 12 months, and work for up to six months with each employer. The visa costs from AU$420 (£211).

May 17, 2016 |

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