Confusion over Australian Working Holiday Visa Tax

Territories in the far North of Australia are under the impression that a Federal Government review into the working holidaymaker visa tax is already underway. However, the Federal Government says that it is merely ‘considering the issues being raised.’

Working holidaymakers’ tax-free threshold

Under the Australian working holiday visa changes,working holidaymakers are set to lose their tax-free threshold and will have to pay a 32.5 per cent tax on all income as of July 1. Currently, travellers on a working holiday visa pay tax only if they earn more than $AUS 18,200 a year for which they are taxed from 19 cents for every dollar above AUS$18,200 earned; there are also additional tax bands for higher salaries

The proposed tax hikes have been heavily criticised by fruit and vegetable growers and a number of tourism operators. In addition an online petition has gathered close to 29,200 supporters. Joe Moro, President of the Mareeba District Fruit and Vegetable Growers Association said that he wants to see the tax rate capped at 15 per cent.

Foreign Backpackers put off by Australian Working Holidaymaker Tax Hike

“Backpackers are saying they’ll either not come to the area or they’ll spend less time in Australia, which will have an impact on the availability of labour in horticultural industries right across the country.”

Moro went on to add that the Mareeba District Fruit and Vegetable Growers Association would continue to lobby and put pressure on the government to review what he deems ‘a very important issue to regional Australia.’ Moro was encouraged by the government’s willingness to work with the association to find a resolution.

Federal MPs, Warren Entsch and Bob Katter, who represent territories in the Far North of Australia, are backing local farmers over the issue. Mr Entsch is said to be confident that he has secured a formal review.

Australian Immigration denies working holidaymaker tax review

“The Government is aware of industry concerns about the tax change to the working holiday maker visas (417 and 462) due to take effect from 1 July 2016, and considering the issues being raised.”

Chief executive of Tourism Tropical North Queensland “Backpackers and working holidaymakers are a ‘significant part’ of tourism in the region. Waal thinks that the Federal Government should make the working holidaymaker visa application process cheaper to compete with other Countries.

“The primary focus should be on the cost of getting here. Getting a working visa for Australia out of the UK, for instance, costs about $500, that’s too expensive. We need to make it more cost effective and far easier to work here. That’s a bigger barrier than visitors paying tax when they get here.”