Australian Government announces $10 million campaign to attract backpackers

by Ray Clancy on October 11, 2016

in Jobs in Australia

The Australian Government is to spend $10 million trying to attract working holiday makers to the country in a bid to persuade more young people to spend time in Australia.

The number of applications from backpackers for working holiday maker visas has fallen since it was announced, and then confirmed, that wages earned would be taxed from January 2017.

studentbackpackersAlthough the backpacker tax, as it is called, has been set lower than planned at 19% on earnings up to $37,000, there is still concern that young people are being put off travelling and working in Australia.

Now the Government has announced that it is giving $10 million in funding to Tourism Australia for a global youth targeted advertising campaign to attract more young people from around the world.

The Government has also announced that the fee for a working holiday maker visa is being reduced by $50 to $390 and working arrangements will be more flexible. For example, an employer with premises in different regions will be able to employ a working holiday maker for 12 months, six in each region.

‘We recognise that working holiday makers are an important part of Australia’s $43.4 billion tourism industry and a key source of labour, particularly in the agriculture, horticulture, tourism and hospitality sectors. We also recognise, as do stakeholders, that working holiday makers should pay fair tax on their earnings,’ said Treasurer Scott Morrison.

‘We will also seek to boost the arrivals of working holiday makers, which have been in decline since 2012/2013 as a consequence of factors including exchange rate variations and changed economic conditions in source countries,’ he added.

He also announced that to generate more accurate data and boost integrity of the scheme by preventing exploitation of working holiday makers, their employers will be required to undertake a once-off registration with the Australian Taxation Office (ATO).

‘This simple and easy registration process will help provide valuable data on the employment of working holiday makers. Employers who do not register will be required to withhold tax at the 32.5% rate. Working holiday makers will be made aware of registered employers via the publication of a list on the ABN Lookup,’ Morrison explained.

‘The package of reforms to working holiday maker arrangements will therefore not only ensure working holiday makers pay fair tax on their earnings but also increase Australia’s attractiveness as a top destination for backpackers,’ Morrison said.

But the changes also mean that the Government will increase the tax on working holiday makers’ superannuation payments when they leave Australia to 95%. Morrison said that this is consistent with the objective of superannuation, which is to support Australians in their retirement, not to provide additional funds for working holiday makers when they leave Australia.

There will also be a one-off increase to the Passenger Movement Charge of $5 from 01 July 2017 and the tax changes will come into place on 01 January 2017.

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