Resolution of backpacker tax welcomed by hospitality industry

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Carlita Warren

 

The resolution of the backpacker tax will provide much needed certainty to tourism and hospitality operators heading into the busiest trading period of the year, according to peak industry body Restaurant & Catering Australia (R&CA).

 

From January 1, 2017, a tax rate of 15 per cent will apply to working holiday makers, down from the 32.5 per cent originally proposed in the 2015-16 Federal Budget. Tax on superannuation payments will also be revised from 95 per cent to 65 per cent.

 

The Government has also agreed to freeze the Passenger Movement Charge for the next five years following a $5 increase in the charge to $60. In addition, a $10 million youth campaign will be designed to promote Australia as a destination to holiday and work.

 

R&CA CEO and Chair of the ACCI Tourism Council John Hart has welcomed the long-awaited decision, saying the decision brings certainty to many businesses reliant on these travelers to supplement their workforce.

 

“It hasn’t been an easy process arriving at this decision. Operators need certainty of the tax arrangements for these workers. Any further delays would have had huge administrative implications for the sector come January 1, 2017.

 

“We cannot underestimate the importance of transient workers to our industry, particularly in regional Australia. For every 100 working holiday makers to Australia, a further 6.3 full-time jobs are created elsewhere in the economy. Tax arrangements for these workers need to be fair but also ensure Australia is still an attractive destination to holiday and work,” Mr. Hart says.

 

Mr. Hart indicated the industry’s attention must now be squarely focused on promoting Australia as a travel destination.

 

“The industry remains concerned over the potential damage the delayed decision has caused the sector. We must reengage young travelers and reiterate our competitive rates of pay and amazing visitor experiences on offer,” Mr. Hart says.

 

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