The Tourism Industry division of the NSW Business Chamber says the Federal Government’s decision to delay the introduction of the ‘Backpacker tax’ until at least 1 January 2017 is good news for tourism operators, but warns that continued uncertainty around working holiday visas is already negatively impacting business in the tourism sector.
“Businesses in the tourism, hospitality and agriculture sectors will welcome the six-month delay in the introduction of the ‘backpacker tax’, but we urgently need greater clarity on how a re-elected Turnbull Government will address this issue in the long-term,” said Dean Gorddard, Executive Manager of the Tourism Industry Division of the NSW Business Chamber.
“We welcome the Government’s recognition that its proposal to axe the tax free threshold for working holiday makers would severely harm the tourism and agricultural businesses that rely heavily on this source of casual labour.
“Two months ago the Tourism Minister Richard Colbeck committed the Federal Government to a cross-departmental review of its ‘backpacker tax’, originally flagged in the 2015-16 Budget, but we will now need to wait until mid-October for further details.
“Unfortunately, the uncertainty around working visa requirements is already having a negative impact, with some businesses reporting 50 per cent drops in job applications. Simply delaying the introduction of the tax by six months does not address the concerns of potential workers or those who depend on their labour.
“Local tourism operators already face fierce competition in attracting holiday makers looking to work in Australia, with New Zealand, Canada and South Africa offering similar tax arrangements to Australia’s current scheme.
“The lack of clarity on this issue may have already impacted on the decisions of working holiday makers on whether to work here or New Zealand. An increased level of marketing targeted to potential working holiday-makers needs to be undertaken as a priority to ensure we have a plentiful labour source for the tourism and agriculture industries particularly in regional NSW.
“The six-month delay in introducing the ‘backpacker tax’ will mean that any changes will come into effect in the middle of summer at the height of the peak tourism season, causing major disruptions across the visitor economy. It would be prudent for whichever party forms Government to simply abolish the ‘backpacker tax’ and do so as quickly as possible,” Mr Gorddard said.