26-Feb-2016 Compromise on Backpacker tax

Compromise sought on 'backpacker tax' as working holiday-makers threaten to leave Australia.


Moves are underway within the Federal Coalition to find a compromise for the controversial 32.5 per cent backpacker tax, slated to take effect in July.

Key points:

  • Farmers fear tax could scare off backpackers from rural work
  • Government MP Sharman Stone flags concern with tax change
  • Nationals say they will monitor impact of tax on industry

The agriculture industry is worried the tax will cause a labour shortfall and stifle the growth of the nation's $10 billion horticulture sector.

Some rural MPs are questioning whether the proposed tax will generate the full $540 million forecast by Treasury over the next three years.

The change will see foreigners on working holiday visas taxed 32.5 cents from the first dollar they earn, and a scrapping of the $18,200 tax-free threshold.


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