News

MDC welcomes 'backpacker tax' review

Thu, 17 Mar 2016 04:49:00

The Federal Government’s decision to review the planned backpacker tax is being welcomed by Mildura’s business leaders as a welcome sign that the Government is listening to reason on the issue.

Mildura Development Corporation brought together more than 20 industry representatives at an urgent meeting three weeks ago about the planned ramping up of taxes for foreign workers, with representatives concerned at the negative impacts on local industries.
MDC chief executive Jenny Garonne said news that the Tourism and International Education Minister Richard Colbeck would review the changes was an enormous relief – but MDC and industry leaders would not be easing up their pressure.
“This is a fantastic break-through and a good sign – but we have been advocating hard on this issue, and we need to keep doing that,” Ms Garonne said.
“Minister Colbeck’s task is to find a revenue-neutral solution in consultation with the employment, agriculture and industry Ministers, but the fact that it has come in under his Tourism portfolio means we need to continue arguing our case strongly and clearly,” she said.
“The emphasis is on tourism, rather than horticulture, so it is still very important to push home the messages about the negative impacts of the tax changes for agriculture.”
Backpackers currently pay tax from 19 cents in the dollar on income above the tax-free threshold of $18,500. Under the July 1 changes they will pay a flat 32.5 cents from the first dollar they earn.
“It means someone earning up to $37,000 on a working holiday will pay around $12,000 in tax instead of $3,500 and, in reality, it means backpackers will simply go to New Zealand or somewhere else,” Ms Garonne said.
“The effect on the capacity of our local horticultural industry will be significant, and we know anecdotally that it’s already occurring in anticipation –  the word is out and backpackers are finding other alternatives for their working holiday,” she said.
Ms Garonne said MDC welcomed the strong support that had come from the Member for Mallee Andrew Broad and his office on the issue.
“Mr Broad has listened and has taken our concerns to his colleagues and that’s obviously been very important in getting our messages before the senior members of the Government,” Ms Garonne said.
“As industry and business representatives we will be making a plan in coming days about the best opportunities to keep our concerns on the radar as the review rolls out,” she said.