The Victoria Tourism Industry Council (VTIC) today called on the Federal Government to use next week’s budget to abandon its controversial proposed backpacker tax.
“Victorian tourism businesses remain strongly opposed to this proposed tax, as it will deter backpackers from visiting and working in Australia and stifle tourism growth,” said VTIC Chief Executive Dianne Smith.
Under the Federal Government plan revealed in last year’s budget, from 1 July 2016 the tax-free threshold (currently $18,200) for working holiday makers will be removed and their earnings will be subjected to a 32.5 per cent tax rate from the first dollar earned.
Ms Smith said the government had announced a review of the proposed tax earlier this year but needed to provide certainty to the tourism industry with a decision next week.
“International backpackers contribute over $600 million to the state’s economy and represent more than one in 10 international overnight visitors to Victoria,” said Ms Smith.
“Hitting travellers with this tax will damage Australia’s reputation as a desirable place to visit and work, and in the highly competitive international tourism market we cannot afford to put travellers off side.”
Ms Smith said backpackers were a valuable source of labour for Victorian tourism operators and the tax would make it harder for businesses to grow.
“The hospitality sector in particular relies on the involvement of a transient workforce to meet seasonal market demands,” said Ms Smith.
“Victorian tourism operators are facing a shortage of more than 30,000 workers over the next five years, so the government must do what it can to grow our workforce.”