THE proposed backpacker tax rate applied to working holiday visa holders will be cut from 32.5 per cent to 19 per cent.
The increase was to apply from July 1 this year, but was reduced after a review of the tax last week.
Federal Member for Pearce Christian Porter said the change recognised the importance of keeping regional economies strong.
“Agriculture and tourism makes a fundamental contribution to the local economy in Pearce,” Mr Porter said.
“Farmers, growers and tourism operators expressed strong opinions about the supply and taxation of working holiday visa holders and those concerns have been heard.
“The revision of the backpacker tax to 19 per cent is a win for the farmers and growers of Pearce who rely on strong seasonal labour support.
“This is one more way that we are working to ensure Pearce remains a vibrant hub of industry and employment into the future.”
Not everyone is pleased.
Tourism Council WA chief executive Evan Hall said the tax reduction would cause other consequences.
“While a 19 per cent tax rate is better than 32.5 per cent, it will still have a detrimental impact on the tourism industry,” he said.
“The Passenger Movement Charge would increase to $60 per international visitor to compensate (for the 13.5 per cent cut).
“The charge is hidden in the upfront cost of return airline tickets to Australia, and will make it among the highest tourism tax in the world.”
Mr Porter said the 13.5 per cent reduction would maintain Australia’s status as one of the most competitive destinations for working holidaymakers, while ensuring they pay a fair level of tax.
Mr Hall said any increase on the charges for travellers would result in fewer leisure visitors coming to the country.
“Every lost international visitor results in a loss of $2560 in visitor expenditure,” he said.
“If 0.5 per cent of people who would have travelled to Australia are put off by the higher airfares, it would result in a loss of 4400 visitors, $11 million and 80 jobs per year.
“Tourism is an export in a highly competitive international market, and every time you tax an export, you lose to other markets.”