If taxes are like death and not something many of us want to hear about then this applies doubly in an election year. Given the Federal Government has just got through spruiking a budget that was small on risks and big on the “steady pair of hands” approach it would seem they had come through relatively unscathed; some tax sweeteners for the well-off earning more than $80,000, some minor imposts on the richest one percent in their superannuation contributions and of course the painful but morally justifiable blow to the abject smokers of the world. Normal political watchers would have imagined the backpacker tax, the plan from July this year to slug backpackers with a 32.5 per cent tax rate from the first dollar they earned, would sail through with barely a whimper. After all backpackers cannot vote and the bulk of them are probably not in the country long enough to rise any kind of clamour.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Other Australian workers don't start paying tax until their income exceeds $18,200 and the new tax regime threatened to take a big slice of the incentive for foreign travellers to work at all. The fundamental problem is this workforce does the work Australians don’t want to do, including some of the really touch hands on agriculture labour like fruit picking. The backlash has come instead from the growers and the farmers who have come to rely so heavily on their labour. They now make up almost a quarter of the agricultural workforce.
Now in a glaring about face to defuse election tension the Government has put the policy on hold for six months until the safety of another term. Promising to review the policy at the behest of Barnaby Joyce.
But even with this buffer zone the tax looks set to come in on January 1 2017 and opponents are still furious at the impression it will make on prospective travellers. Tourism operators are worried working holidaymakers simply won't come to Australia and with a basic tax rate of 32.5cents in the dollar will simply look elsewhere. The Australian Chamber of Commerce and Industry has also weighed in, reiterating working visitors did jobs that otherwise wouldn't get done and wants the tax abolished altogether. Farmers including the National Farmers Federation are still furious, saying the six-month delay means the tax will be imposed in the middle of the busiest time of the year and there is no way they can plan for the planting and cropping season.
A poorly thought out “easy” tax that is still likely to find plenty of opposition.
