Backpacker change will cost tourism jobs

The Federal Government’s announcement regarding the backpacker tax will hit the tourism industry, resulting in less tourists and jobs across Western Australia.

Under the new plan, the Passenger Movement Charge will be increased to $60.00 per international visitor to compensate for a 19 per cent tax rate for working holidaymakers from their first dollar earned, rather than the 32.5 per cent rate originally proposed. The Passenger Movement Charge is hidden in the upfront cost of return airline tickets to Australia.

Tourism Council WA CEO Evan Hall said the increased Passenger Movement Charge would make it among the highest tourism tax in the world.

“Any increase on the charges for travellers will result in fewer leisure visitors coming to Australia,” he said.

“Every lost international visitor results in a loss of $2,560 in visitor expenditure.

“If 0.5 per cent of people who would have travelled to Australia are put off by the higher airfares, it would result in a loss of 4,400 visitors, $11 million and 80 jobs per year.

“Tourism is an export in a highly competitive international market, and every time you tax an export you lose to other markets.”

Mr Hall said the shortfall shouldn’t be paid for by increasing taxes on international visitors, just as we don’t tax agricultural or mining exports.

“All this outcome achieves is switching a tax from one type of visitors, backpackers, to another type of visitor in international leisure tourists,” he said.

“Both of these types of visitor travels to regional areas, and taxing them with result in a reduced number of visitors, reduced expenditure and a loss of jobs.

“While a 19 per cent tax rate is better than 32.5 per cent, it will still have a detrimental impact on the tourism industry.”

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