Proposed backpacker tax rate reduced

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The Federal Government has backed down over plans to tax working holiday visa holders at 32.5 percent. The Federal Government has backed down over plans to tax working holiday visa holders at 32.5 percent. The Federal Government has backed down over plans to tax working holiday visa holders at 32.5 percent.

A plan to tax people on Australian working holiday visas 32.5 percent has been revised to 19 percent, as the Federal Government announced it will reduce the so called ‘Backpacker Tax’.


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UPDATE: The Government will extend the eligibility age of the working holiday maker scheme from 30 to 35 years and implement a reduction to the application charge for working holiday maker visas from $440 to $390.


The move comes in response to outcry from Australian farmers who were concerned the high tax would lead to fewer backpackers coming to Australia, making it difficult for regional employers to find seasonal farm workers.

Opposition to the 32.5 percent tax rate included a petition which attracted around 50,000 signatures.

National Farmers’ Federation (NFF) president Brent Finlay says the Federal Government backdown is a win for regional employers.

"The NFF has always advocated for a rate of 19 per cent as a fair and reasonable measure," Finlay says.

"We are delighted today to see Government listen to its constituency and not put in place a tax that would have hurt farm production and the Australian economy.

"We have consistently said agriculture simply cannot do without backpackers and, following today’s announcement, we can again go to the working holidaymaker community and say that coming to work on our farms is worth it.

"We are also greatly heartened to demonstrate that, when an industry as a whole works together, we can achieve national advocacy outcomes that are positive for both our sector and the broader Australian economy."

The Federal Government has flagged that there will be some changes to the working holiday makers’ superannuation entitlements, the details of which are yet to be released.

"We now look forward to seeing further details of this announcement and working with Government to make sure that we have backpackers coming to our country who are eager to work on our farms and contribute to our rural and regional communities," Finlay says.

 

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