Win for Winemakers as Backpacker Tax Proposal is Slashed

Winemakers will be relieved to learn the proposed 32.5 per cent 'backpacker tax' rate will be cut to 19 per cent. The tax rate reduction will apply to Working Holiday and Work and Holiday visa holders as of 1 January 2017.

With the peak tourism and harvest season ahead, farmers and winemakers will look to backpackers to help harvest their crops across all regions through Working Holiday Maker visa applications. The programme has grown substantially since its establishment in 1975. Last year alone saw over 200,000 Working Holiday Makers visas granted.

Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce, explained, “The win on backpacker tax is a win for our farmers who can get their fruit off the tree, off the vine and off to market.

“The decision to reduce the proposed tax rate from 32.5 per cent to 19 per cent tax maintains Australia’s status as one of the most competitive destinations for working holiday makers, while ensuring they pay a fair level of tax.

“Australia’s Working Holiday Maker programme provides a vital source of labour, particularly across the agriculture and tourism sectors.”

Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, expressed the government's understanding in keeping the regional economies strong and its commitment to resolving the issue swiftly and fairly.

“More than 1700 stakeholders contributed to the review through written submissions and face to face consultations. They made it clear that an early resolution to the tax rate issue was needed,” Hartsuyker stated.

“Today’s announcement demonstrates the Government listened and is now providing certainty to stakeholders for the upcoming harvest and tourism seasons. Today’s outcome has been made with an informed understanding not only of the labour challenges facing our agriculture and tourism sectors, but also the challenges facing the Australian economy in a global labour market.

“The review was about more than the tax rate, and the government will continue to consider a number of issues and suggestions that emerged through the review.”

Information about the changes will be progressively uploaded to ato.gov.au.

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