Tax delay an opportunity to build a stronger backpacker industry in Australia

The announcement by the Turnbull Government that it will delay the introduction of a 32.5% ‘backpacker tax’ is a move welcomed by Australia’s export tourism industry, ATEC Managing Director,Peter Shelley said.

“We welcome the postponement of this tax and the willingness of the Government to look at ways to improve Australia's backpacker offering, but remain concerned by the continuing uncertainty created by the delay.

“With a review scheduled for early 2017, it leaves backpackers considering an Australian holiday unsure of what to expect and this will only further encourage them to consider an alternative such as New Zealand or an Asian destination.

“This review must go beyond addressing labour needs and also look at the tourism industry and the negative message we are sending to the international visitor market.

“There are many major travel wholesalers in Australia this week attending our biggest annual export travel and tourism B2B event, the Australian Tourism Exchange (ATE), and many have expressed concern about this ongoing uncertainty.

“Reports from our members suggest the negative sentiment is driving significant leakage to the New Zealand and Asian markets and putting this tax on hold will not reverse this flow.

“While this is a welcome sign the Government recognises the ‘backpacker tax’ is retrograde, there is already a strong message in the marketplace that Australia is problematic - a message which will affect our appeal now and into the future.”

Mr Shelley said the review should look at other disincentives to our competitiveness including visa costs.

“We already face strong competition from New Zealand who has a backpacker visa that only costs $AUD 187, compared to $440 for an Australian visa.

“This review should be an opportunity to improve our backpacker visa system and be a way for Australia to reclaim our declining share of the international backpacker market.”