ATA Breaking: Reduced Backpacker Tax

A proposed backpackers tax on working holiday makers at 32.5% for every dollar earned has been scrapped in favour of a lower tax rate at 19%.

The Australian Taxpayers’ Alliance was at the forefront of policy discussion to scrap the tax, with articles to oppose the tax here and here as well as a parliamentary submission calling to repeal the legislation. Through traditional and online media, the ATA reached out to more than 4,000 individuals on this matter.

We took into consideration the impact the tax would have, on both agricultural and tourism industries that are struggling to fill labour shortages with domestic workers. We stated from the beginning that “any attempts to increase the degree of taxation upon 417 and 462 visa holders would have deleterious effects upon economic growth and development, particularly in regional and rural Australia.” We also made the point that “these negatives consequences would significantly outweigh any additional taxation revenue gained by the Commonwealth.” 

Fundamentally, the ATA opposed and continues to oppose “any proposal to tax visa holders differently to resident taxpayers violates fundamental principles of equality and fairness under the law.”

The government’s final decision to reduce the tax to a far lower level than previously has been credited to “intense national pressure.” From the voices in agriculture, to tourism, the Australian Taxpayers’ Alliance ensured that the taxpayers concerns were heard to the government loud and clearly.

While we applaud the decision to reduce the tax, we call on our government to repeal the legislation entirely. The government can and must look towards economic growth, innovation and global competitiveness, instead of crippling taxation, to bring the budget back to surplus.

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