Saturday 18 November 2017

Australia slashes 'backpacker tax' in new working holiday package

Working Holidays

Sydney Opera House and bridge, Australia. Photo: Deposit
Sydney Opera House and bridge, Australia. Photo: Deposit
Pól Ó Conghaile

Pól Ó Conghaile

Australia is to reduce tax and improve employment conditions for working holidaymakers in a raft of new measures.

Among the improvements are a reduction in working holidaymaker tax rates from 32.5pc to 19pc on earnings up to $37,000 (€25,200), from January 1, 2017.

Ordinary marginal tax rates will apply after the $37,000 threshold.

Working Holiday Makers will also be allowed to stay with one employer for up to 12 months (rather than the previous six month period), as long as the second six months is worked in a different location.

In addition, the application charge for working holidaymaker visas will be reduced by AUD$50 (€34) to $390 (approx €266).

The measures come as part of a government package aimed at increasing Australia’s attractiveness as a destination for backpackers.

Australian Working Holiday visas (subclass 417) are available to visitors aged 18-30 - a cohort of younger travellers seen as a key source of labour in the country, particularly in the agriculture, horticulture, tourism and hospitality sectors.

Arrivals have been in decline, however.

In the 2011/12 financial year, according to Tourism Australia, 25,827 Irish people were granted the Working Holiday Visa.

By 2015/16, that had fallen to 6,743.

The new arrangements aren't a total windfall, however.

The government also plans to increase the tax on working holidaymakers' superannuation (retirement savings) payments to 95pc when they leave Australia - a move it says is designed to support Australians in their retirement "and not to provide additional funds for working holiday makers when they leave Australia."

A $10 million (€6.8m) youth tourism marketing campaign has also been announced. 

More info on Working Holiday Visas at border.gov.au.

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