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Australia delays 'backpacker tax' hike | Australia delays 'backpacker tax' hike |
(about 4 hours later) | |
The Australian government will delay its plan to introduce a so-called "backpacker tax" after a backlash from farmers and the tourism industry. | The Australian government will delay its plan to introduce a so-called "backpacker tax" after a backlash from farmers and the tourism industry. |
Tourists on working holiday visas were set to be excluded from the country's tax-free threshold from 1 July. | Tourists on working holiday visas were set to be excluded from the country's tax-free threshold from 1 July. |
Under the plan they would have been taxed at 32.5c for every dollar they earned in Australia. | Under the plan they would have been taxed at 32.5c for every dollar they earned in Australia. |
But the tourism and farming sectors, which rely on temporary workers, lobbied hard against the change. | But the tourism and farming sectors, which rely on temporary workers, lobbied hard against the change. |
Industry bodies said higher taxes would push temporary workers to choose destinations such as New Zealand and Canada over Australia. | Industry bodies said higher taxes would push temporary workers to choose destinations such as New Zealand and Canada over Australia. |
Applications for Australia's working holiday visas have reportedly already dropped by 5% since the plan was announced. | Applications for Australia's working holiday visas have reportedly already dropped by 5% since the plan was announced. |
'Very good news' | |
Assistant Treasurer Kelly O'Dwyer said on Tuesday that the tax would be deferred for six months. | |
"I can tell you with great certainty that this is very good news for rural and regional communities; it's good news for our tourism sector; and it's good news for working holiday makers," Ms O'Dwyer said. | "I can tell you with great certainty that this is very good news for rural and regional communities; it's good news for our tourism sector; and it's good news for working holiday makers," Ms O'Dwyer said. |
But the opposition Labor party labelled the move a "stunt to push the issue beyond the election" on 2 July. | But the opposition Labor party labelled the move a "stunt to push the issue beyond the election" on 2 July. |
Australia granted 214,830 working holiday visas in 2014-15. British citizens were the programme's biggest constituency, with 44,730 visas granted. | |
The government estimates that taxing backpackers at a higher rate can deliver revenues of about A$540m (£274m; $396m) over three years. |
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