May 5, 2021

“Backpacker Tax”: federal government dumps plan

The Australian government is no longer considering slugging backpackers with a 32.5% tax.

The new deal was signed off by the cabinet on 27 September 2016 and instead levies a 19% tax from the first dollar earned. This is comparable to the entry level bracket for residents of Australia. While many farming and industry lobby groups expressed satisfaction with today’s deal, the Tourism and Transport Forum said it was furious the lower tax would be offset by an increase in the Passenger Movement Charge (PMC). The Government’s original tax plan was expected to recoup $500 million from the backpacker tax. To offset the lower tax rate it will increase the passenger departure tax by $5. Among the changes is the news that the Commonwealth will seize 95 cents in the dollar of backpackers’ superannuation when they leave the country. There has also been visa rule changes that increase the age limit on the so-called working holiday makers from 30 to 35. Please see the following link here for statements from various government ministers and industry spokespeople. West Aussie Migration is an industry leader in helping with visa enquiries for backpackers and given Western Australia’s reputation as a farming state, there is no better place to start your Australian adventure!