Industries welcome backpacker tax cut

TWO WA industries with a heavy reliance on backpacker labour have applauded a Federal Government decision to reduce the tax imposed on working holidaymakers.

The Government announced last week that it had backed down from a budget plan to slug working tourists with a 32.5 per cent tax, instead reducing it to a 19 per cent tax on earnings up to $37,000.

With Fremantle a hotspot for international visitors, Australian Hotels Association chief executive Bradley Woods said it was good news for local cafes and restaurants.

“These travellers love working in our hospitality sector and many businesses seek out international workers to fill vacancy gaps,” he said.

“Fremantle in particular is a popular destination for working holiday makers because it’s a tourism and hospitality hot-spot with a great lifestyle.

MORE: Hills orchard group welcomes backpacker tax cut

“There is a projected skilled labour shortage across many occupations in the tourism industry, and in WA alone nearly 13,000 new skilled workers will be needed by 2020. This includes chefs, café and restaurant managers, kitchen-hands and baristas.

“It is going to be a challenge to meet the demand, but this week’s announcement will encourage more working holidaymakers to come to WA.”

Mr Woods said almost 30 per cent of WA’s hospitality workforce was made up of working holidaymakers, but that in the last 12 months the number of them coming into WA had dropped by 11.3 per cent.

The agricultural industry has also praised the decision, with Hills Orchard Improvement Group president Brett DelSimone saying 19 per cent was a “sensible compromise”.

“A decision such as this shows a consultative approach is the best pathway forward in making industry defining policy decisions,” he said.

“HOIG has worked hard with federal WA representatives, such as Andrew Hastie to achieve a successful result.”

The tax will come into effect on January 1.