The federal government announced last week a delay to the start of its controversial backpacker tax by six months which has been welcomed by politicians, the Tourism Council WA as well as business operators in and around the South West.
Currently backpackers are able to earn up to $18,200 tax-free and pay the lower tax rate of 19%.
If implemented the 32.5 per cent backpackers tax, which was a surprise inclusion in the 2015 budget and was due to take effect from July 1, would have made the government an estimated $540 million over the next three years.
Tourism Council WA CEO Evan Hall said the delay was good news but a resolution was needed as soon as possible to prevent further damage to the tourism sector.
“The news of the tax has already put backpackers off travelling to Australia to work,” Mr Hall said.
“We need an end to this tax as soon as possible so we don’t lose any more backpackers to other destinations.”
Mr Hall said backpackers were critical to regional tourism as both tourists and workers.
Manjimup Sally’s Lane businesss owner Paul Starkie said the topic was a hot conversation in the Southern Forests region and it would be good to get it sorted out.
“This is a pretty big subject around here at the moment,” Mr Starkie said.
“What we have to remember is that most backpackers come here to do a bit of work, have a good time and explore our country.
“Most of the money that backpackers earn they will then spend in our town or they will move onto the next town and spend it there.”
With backpackers moving around the country to fit in with seasonal activities, many regional businesses rely on their availability and flexibility.
“If you have a crop that needs coming off during peak season there will always be a demand for people that want to do physical labour and many of them are backpackers.” Mr Starkie said.
Federal Member for O’Connor Rick Wilson MP says he believes the current situation with working tourists needed to be reviewed and is aware that tourists provide a vital source of labour in rural areas where Australian citizens were not prepared to relocate for seasonal work.
The government will conduct a review and cabinet will reconsider the tax in October or November.