The plan to tax working holiday makers at an inflated rate of 32.5% has been dumped by the federal government.
Treasurer Scott Morrison announced the ammendment to the so-called ‘backpacker tax’ increase on Monday, following intense pressure from backbench colleagues and the agricultural industry who rely on working holiday makers to fulfil seasonal harvest jobs.
The proposed 32.5% tax would have been too much of a disincentive to those workers, making it even more difficult for farmers to adequately harvest their crops, many argued.
Instead, working holiday makers will now pay just 19% tax, from the very first dollar they earn. They will still not be able to to take advantage of the normal tax-free threshold like regular Australian workers.
The government will also take 95 cents from every dollar of superannuation earned by a foreign working holiday maker.
The eligable age for the Australian working holidaymaker visa will increase from 30 to 35 years old.
Victorian citrus grower and chairwoman of lobby group Voice of Horticulture, Tania Chapman, said she was pleased with the changes to age eligability but that uncertainty about the government’s position on backpacker tax and super had had a negative impact.
“We have got such bad publicity out there at the moment about this backpacker tax, a lesser rate would have maybe made it more attractive to people who have already booked their flights to New Zealand or to Canada,” she said, acccording to the ABC.
“That reputation, I really have no idea how long it’s going to take us to rebuild that, social media is going to play a huge part.”
“As one said, they were a pig in mud when it came to the changes that I’m about to announce now,” Mr Morrison told reporters in Canberra.