• Victoria Tourism Industry Council (VTIC)
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Tax relief for small tourism business, disappointment for backpackers in Federal Budget

04 /05/ 2016 Comments are Closed

The Victoria Tourism Industry Council (VTIC) is disappointed that the Federal Government did not use last night’s budget to heed calls from industry and abandon its proposal to tax Working Holiday Makers.

“International visitors are an easy target, but taxing backpacker income actually ends up harming hospitality businesses and farmers that rely on Working Holiday Makers for labour,” said VTIC Chief Executive Dianne Smith.

“It’s a disincentive to visit Australia.”

Ms. Smith continued, “We’re pleased to see that funding for Tourism Australia has been maintained, but the backpacker tax is counter-productive to Tourism Australia’s great efforts to attract international visitors to our shores.”

The clear winner in Budget 2016 is small business, with a reduction in the corporate tax rate for businesses with a turnover of less than $10 million per year, to 27.5 per cent from 1 July.

The threshold increase will provide over 90,000 additional small businesses with access to other tax concessions such the instant asset write-off provisions.

With small tourism businesses making up the majority of Victoria’s visitor economy, these measures will generate tax savings that can be re-invested in the industry.

Other positive measures for tourism in the Federal Budget include:

  • $1.5 billion in funding for Victorian infrastructure projects.
  • The introduction of trial visa arrangements in key markets – a user pays visa fast track service for nationals from India and the United Arab Emirates, and a three year multiple entry visa for low immigration risk nationals from India, Thailand, Vietnam and Chile.
  • Premium border clearance services for international air passengers at Melbourne, Sydney and Perth.
  • $12 million over four years from 2016-17 to support implementation of the National Strategy for International Education.
  • Ten Year Enterprise Tax Plan — wine equalisation tax rebate integrity and wine tourism funding ($2m in 2016-17).

For further information regarding the 2016-17 Federal Budget, please view the Australian Chamber of Commerce and Industry’s summary – Key budget announcements for tourism and the visitor economy



About the Author


The peak body for Victoria's tourism and events industry, VTIC represents key industry associations and operators, with over 1400 members.



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