The Victoria Tourism Industry Council (VTIC) welcomes the announced review of the proposed backpacker tax and hopes this will see an end to this policy that will stifle Victorian tourism growth.
Under the Federal Government plan as announced in the 2015-16 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.
“Tourism businesses have been opposed to this plan from the start as it will deter backpackers from visiting and working in Australia,” said VTIC Acting Chief Executive Erin Joyce.
“Backpackers are a valuable source of labour for Victorian tourism businesses, particularly in the hospitality sector which relies on the involvement of a transient workforce to meet seasonal market demands. 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.
“Hitting travellers with this tax would make us a less desirable place to visit and work and damage our strong standing in the highly-competitive international tourism arena.
“We look forward to presenting our stance to the Federal Government’s review of this proposal on behalf of Victorian tourism operators.”
International backpackers contribute over $600 million to the state’s economy, and over $3 billion nationally, and represent more than one in 10 international overnight visitors to Victoria.