The Turnbull Government must immediately begin comprehensive consultations with the tourism and agriculture sectors as it seeks to redesign its backpacker tax amidst plunging application figures and fierce backlash from industry.
Liberal Senator Anne Ruston admitted to The Advertiser on the weekend that the Government had not fully thought through its plan to remove the tax free threshold and charging working holiday makers 32.5 cents in the dollar from 1 July.
Working holiday makers are among the highest spending and longest staying visitors to Australia, with each spending an average of $13,000 and staying eight months, contributing more than $1.8 billion of expenditure to the economy every year.
They are also net job creators, with a Department of Immigration report showing a new full time Australian job is created for every five working holiday maker arrivals, sustaining around 30,000 full time jobs in accommodation, hospitality, and education.
But demand for working holiday visas has plummeted under the Coalition, with 10,000 fewer applications lodged in 2014-15 compared to 2013-14, and 17,000 fewer visa holders in Australia on 30 June 2015 compared to the same day in 2014.
And last year in Senate estimates the Government admitted it had undertaken no economic modelling to determine the impact on demand for working holiday visas the change would have before announcing it as part of the 2015 Budget.
Labor believes that any tax on working holiday maker earnings must be properly considered, designed and carefully calibrated to ensure measures do not have a counterproductive effect on labour, jobs or tourism expenditure.
There also needs to be careful consideration of any new plan to ensure that the effect of a new regime does not simply result in working holiday makers being pushed into the cash economy, where no tax will be paid at all.
Labor calls on the Government to take evidence based approach to the redesign of its working holiday maker taxation policy, in close consultation with the tourism and agriculture industries.
TUESDAY, 23 FEBRUARY 2016
JOINT MEDIA RELEASE
THE HON CHRIS BOWEN MP
THE HON ANTHONY ALBANESE MP
SHADOW MINISTER FOR TOURISM
THE HON JOEL FITZGIBBON MP
SHADOW MINISTER FOR AGRICULTURE, FISHERIES AND FORESTRY
SHADOW MINISTER FOR RURAL AFFAIRS