The hospitality industry has welcomed today’s announcement by Tourism Minister Richard Colbeck that Government would review plans for the upcoming ‘backpacker tax’ on visa workers.
Citing that “legitimate concerns” have been raised, Senator Colbeck revealed Prime Minister Turnbull tasked him with a solution to potentially include in the upcoming May budget, after consultation with relevant ministers and industry.
The so-called ‘backpacker tax’ would see working holiday employees lose the tax-free threshold and pay 32.5 per cent tax from dollar one. While it was hoped the new regulations, scheduled to start 1 July this year, would raise over $500 million in the next four years, many have feared it would put serious downward pressure on already falling working visa numbers and the businesses that employ them.
Tourism Accommodation Australia (TAA) CEO Carol Giuseppi says this is great news for hospitality and tourism, as projects boom around the country and many regions struggle for workers.
“We congratulate the Government for this move, as many regional and remote areas rely on seasonal workers, especially in tourism, and this tax would have seriously impacted the flow of working holiday visitors.
“The Government has identified the need to create 123,000 workers in the tourism and hospitality sector by 2020, and while the hotel industry is working hard to ‘grow its own’, regional and remote areas in particular will rely on being able to attract backpackers and others to fill shortages in peak seasonal periods.”
Colbeck’s proclamation comes as Tourism Research Australia also announced today the latest National Visitor Survey figures, for year ending December, 2015.
Domestically, last year saw overnight trips grow seven per cent to 87.1 million, visitor nights increase four per cent to 322 million, and overall tourism expenditure grow six per cent to $57.9 billion. Giuseppi says the fall in the Australian dollar during 2015 stimulated domestic travel and reduced outbound travel growth, and Government support in areas such as free trade agreements and tourism marketing has had a significant impact on attracting international visitors.
“For the hotel industry, continued growth in visitor numbers is vital if we are to soak up the vast amount of new hotel supply coming into the marketplace.
“It is now estimated that there are over 100 hotel projects in the pipeline, plus a large number of significant refurbishments, and it will be important to generate significant new demand to support this unprecedented level of investment in the hotel sector.”