By Jeremy Sollars
THE Federal Government has caved in on its plan to introduce a 32.5 per cent tax on backpacker workers.
Instead, working holidaymakers will be taxed at 19 per cent from their first dollar earned.
The government had expected to recoup $500 million from the higher tax rate. It will now increase the Passenger Movement Charge by $5 to cover the change.
The passenger movement charge (PMC) is a tax payable by all passengers departing Australia on international flights or sea transport, whether or not the passenger intends to return to Australia. It was first introduced in 1995, and is currently set at $55.
The tourism sector will get $10 million to market jobs to backpackers, Treasurer Scott Morrison has announced.
It is understood legislation will be required to enact the new tax arrangements.
The move follows fury from horticultural producers across the country who rely on backpackers and a seasonal workforce to harvest produce, with many threatening not to plant this season if the tax went through at 32.5 per cent.
But some in the industry fear that many potential overseas workers have already been scared off from travelling to Australia.
The issue split the government, with National and Liberal backbenchers calling for a rethink, while Mr Morrison and Agriculture Minister Barnaby Joyce said any unintended negative consequences would be dealt with if and when they arose.
More in the Free Times print edition on Thursday.
