Page MP welcomes Coalition’s backpacker tax backflip

THE controversial backpacker tax has been put on hold until January 1 2017, in a sign business leaders hope the Coalition Government will dump the tax entirely.

Working holiday makers on a 417 visa were set to be hit with a tax rate of 32.5% from the first dollar they earned working in Australia from July 1 this year. However after a backlash from farmers and the tourism and hospitality industries, the government has announced it will review the tax in October, with the results of the review to be implemented at the start of next year.

>> RELATED: Fears backpacker tax increase will create worker vaccuum

Northern Rivers NSW Business Chamber regional manager John Murray said the many backpackers who flow through the region are a valuable resource.

"The tourism, hospitality, and farming businesses in particular have been uncertain about what would happen after July 1 when the tax free threshold for people on working holiday visas was due to be abolished," Mr Murray said.

"The delay is welcomed but we hear the concerns of local businesses loud and clear so we are supportive of this tax being abolished entirely."

>> RELATED: Hogan supports proposed introduction of backpacker tax

Federal Member for Page Kevin Hogan has welcomed the decision to review the tax.

"I am very happy that the tax will not be introduced from July 1," he said.

"Our farmers face ongoing challenges to secure an adequate workforce to pick the blueberries, harvest macadamias, process meat and milk cows.

"I, and many of my National Party colleagues, have been talking with local farmers and our communities who are concerned that backpackers may choose not to come to Australia if they have to pay the proposed tax.

"As a result, the Government has agreed to review the tax and defer the introduction of this tax for 6 months."

Mr Murray said the backpacker tax was purely a revenue-raising exercise, and wouldn't like to see the contribution of backpackers taxed out of existence.

"Its design didn't take into account that most of the money that working holiday makers earn is then spent in the same area on meals, accommodation, entertainment and activities," he said.

"In many cases this spending can keep tourism infrastructure alive in the non-holiday tourism season."

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