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Backpacker Tax to cost Australian economy $350 million per year

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The Nationals WA candidate for O’Connor John Hassell has labelled the Federal Government’s Backpacker Tax an “abject failure” following a community forum on the issue in Manjimup today.

Mr Hassell pointed to industry modelling which showed the Backpacker Tax would cost far more than it would raise and demanded the Federal Government immediately scrap the tax.

Australia’s largest youth tourism organisation YHA Australia has released a report – Recommendations to grow the Australian Working Holiday Maker scheme – identifying that a 10 per cent decline in Working Holiday Maker arrivals to Australia would cost the broader Australian economy up to $350 million each year.

Mr Hassell said the Report highlighted significant failures of the Tax.

“The Backpacker Tax is already costing the Australian economy millions of dollars before a single dollar has even been raised by the tax,” Mr Hassell said.

Latest figures released by the Department of Immigration and Border Protection highlighted a steady decrease in working holiday visa applicants in the months since the Backpacker Tax was announced.

“The number of Working Holiday Visa’s granted has been in decline for the first time in a decade off the back of the Backpacker Tax, along with massive increases to visa application costs imposed by successive Federal Government’s since 2013.”

Mr Hassell said the application cost of a Working Holiday Visa had increased significantly from $280 to $440 since 2013.

“An Australian Working Holiday Visa is now roughly double the cost of its New Zealand or Canadian equivalents. Statistics also show that as the number of Working Holiday visitors to Australia has decreased, the number entering New Zealand has risen proportionally.

“This shows that foreign workers aren’t stupid. They are very savvy about where they will travel and work and they are saying that Australia is no longer the most attractive option.”

The Report also highlighted that the average working holiday maker in Australia invested around $15,000 into the Australian economy.

“Backpackers spend as they travel, and virtually every dollar they earn in Australia is spent in Australia, investing in local businesses and supporting regional tourism experiences,” Mr Hassell said.

“That $15,000 per person is worth far more to the Australian economy than the Backpacker Tax could ever hope to raise.”
Mr Hassell said seasonal workers also helped create more Australian jobs.

“For every 100 Working Holiday makers in Australia, 6.3 full time equivalent jobs are created in the wider economy, to provide accommodation, hospitality services and tourism experiences for these international visitors.

“With current visitor numbers, that equates to 11,700 full time jobs in Australia, thanks to the Working Holiday visa program.”
Mr Hassell said the Tax would cause significant damage to regional communities, particularly the agriculture and tourism industries.

“The Backpacker Tax will reduce the availability of seasonal workers to regional WA, damage regional industries, and have a negative flow-on effect to the regional economy,” Mr Hassell said.

“Working Visa numbers are already down, and the tax has not even been implemented yet.”

Mr Hassell said small business, particularly in regional areas, would be the hardest hit.

“This tax really amount to a further cost on regional employers, who will bear the brunt of staffing shortages and be made to pay more to attract workers.”

A recent media statement by YHA Australia CEO Julian Ledger also condemned the Federal Government’s decision to defer the tax.

“Deferral of the tax is not satisfactory as it leads to uncertainty,” Mr Ledger said.

“Regional harvest work is tough, is subject to uncertainty and usually not well paid. Working holiday makers are flexible and willing to travel to where the work is, but have to end up with enough pay to make it worthwhile.”

The Report shows the value of the Backpacker industry is worth around $3.5 billion to the Australian economy each year. The Backpacker Tax is expected to raise just $540 million over four years.

Mr Hassell said only The Nationals WA were committed to scrapping the Backpacker Tax.

“To get rid of the Backpacker Tax for good, Vote 1 for The Nationals WA at the Federal Election,” he said.