Backpacker Visa Changes and Tax Update

[Guest The Pom Queen]

Well at last the government have seen sense and the tax rate will not be 32% but will be 19%.

They are also putting the age limit up to 35 which will allow many more to participate in the scheme.

The other change is that you can work for one employer for 12 months, although this will only be permitted if they have two locations.

[amibovered]

Seem like sensible changes,

 

has something gone wrong with the Government!

[Quokka2005]

Super is getting taxed at 95% apparently but i dont think as many people will be as bothered with that. The age limit being changed is a good idea

[Guest Orange Magpie]

Super is getting taxed at 95% apparently but i dont think as many people will be as bothered with that. The age limit being changed is a good idea

 

The super contribution from your wages is 9.5%, this is mandatory, the government will then tax you 90% of your super contributions when you leave the country, leaving you with 10% of your super contributions left in a fund. Not bad heh, this works out to an effective tax rate of 8.55, which, when added to the 19% taken on earnings amounts to a total tax rate of 27.55%

[Guest Nick87]

Hi Guys,

 

regarding the change that allows WHV holders to work for up to 12 months for the same employer, is it just going to be applied for people who are going to start the WHV in January or also for actual WHV holders?

 

In case it just interests future WHV holders, backpackers who are starting the WHV now could be in disadvantage next year.

 

thanks!

 

Well at last the government have seen sense and the tax rate will not be 32% but will be 19%.

They are also putting the age limit up to 35 which will allow many more to participate in the scheme.

The other change is that you can work for one employer for 12 months, although this will only be permitted if they have two locations.

[Jamiemadden7]

When will this take effect from?

[flag of convenience]

Just adding further challenges to the local' looking for work. Not in favour. Especially at the moment. In fact the original concept of the visa, that being a chance to work and travel within the country, appears to my mind to be ever increasingly work focused and increasing both work duration and age somewhat supports that.

[Nemesis]

Just adding further challenges to the local' looking for work. Not in favour. Especially at the moment. In fact the original concept of the visa, that being a chance to work and travel within the country, appears to my mind to be ever increasingly work focused and increasing both work duration and age somewhat supports that.

Have to agree. The concept of the WHV was to give kids a gap year n which to travel, with the chance to earn the money to travel with.

Raising the age to 35makes no sense at all in my eyes, can't see the reasoning behind it with unemployment growing in oz all the time.

[stephaniemdury]

They are also putting the age limit up to 35 which will allow many more to participate in the scheme.

This could be very good news for me. I'm currently 31 and will be 32 by the time my 1st year WHV expires (March 2017). My worry is that this condition will apply to all NEW applicants only I'm struggling to find any information about this online and assume that this hasn't yet come into effect as the gov sites are still saying "up to 31". Would anyone know where I can find out more information on this? I'm prepared to do the 88 days rural work but I want to be sure that I qualify for my 2nd year WHV before I commit to the 88 days. To take 3 months out of my travel plans to complete the 88 days and then find out that I don't qualify, would be a massive kick in the teeth.

[salsera]

does this new regulation only apply to the working holiday visa? (i.e. does it apply to any other temporary work visas?)

[flag of convenience]

Have to agree. The concept of the WHV was to give kids a gap year n which to travel, with the chance to earn the money to travel with.

Raising the age to 35makes no sense at all in my eyes, can't see the reasoning behind it with unemployment growing in oz all the time.

 

Employer groups will welcome it. Adds competition into the pool, not to say back door migration to those with the will and skills. A further kick in the guts though for home grown young and for training and so on.

[Quokka2005]

Things are different these days, people are deciding to go travelling later and later. Most people i met were 26-30 and i know a few people who are over 30 and would like to do something like that. So it would work out well for some people, its not just "kids", i dont consider myself one. If id went travelling aged 18-20 i dont think id have had half as good a time. However if australia is having a bad time then i can see why adding more people might not be the best idea. Be interesting to see how the next few years go

[Jamiemadden7]

Things are different these days, people are deciding to go travelling later and later. Most people i met were 26-30 and i know a few people who are over 30 and would like to do something like that. So it would work out well for some people, its not just "kids", i dont consider myself one. If id went travelling aged 18-20 i dont think id have had half as good a time. However if Australia is having a bad time then i can see why adding more people might not be the best idea. Be interesting to see how the next few years go

 

Couldn't agree anymore, with financial restraints and by the time you finish studying, it won't leave you with much time to get started, I am 27 and only just got myself in the position in which i can finally go traveling which i will be doing in February

[flag of convenience]

Although 27 is still somewhere of 31. One can only suppose the market over that age will largely consist of fully trained or professional people whose skills will be put to use and far removed from the concept of a working holiday.

While this may sound fine, in times of lowering economic expectations, thousands more workers flooding in will most likely negatively impact further on local expectations.

The dangers of this are quite evident I'd have thought over time.

[Guest The Pom Queen]

What gets me is when the farmers say there are 40% less backpackers knocking on their door for work and farmers are having to hold back on harvest because they have no workers. Yet on the other side of the coin, you have backpackers saying there is no work out there? Is it just that the backpackers don't want to do the hard graft for the 2nd year?

[Guest The Pom Queen]

A worker places a watermelon on a conveyer belt leading to a tractor

PHOTO: A seasonal worker places a watermelon on a conveyer belt leading to a tractor. (Brad Marsellos )

RELATED STORY: Liberal senator urges Turnbull to end backpacker tax uncertaintyRELATED STORY: Government backs down over backpacker tax

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The Federal Government's compromise on the backpacker tax has received a mixed reception from the agricultural sector.

 

Most farmers and lobby groups have welcomed the drop in the rate of tax from 32.5 per cent to 19 per cent.

 

But many say they are frustrated at the news the Commonwealth will seize 95 cents in the dollar of backpackers' superannuation.

 

Tania Chapman, a Victorian citrus grower and chairwoman of lobby group Voice of Horticulture, said industry had wanted superannuation for backpackers to be scrapped.

 

"Why are we just not saying that superannuation is not payable for backpackers but this amount has to be paid in increased tax?" she said.

 

"At the end of the day it's no benefit to the grower, it's now no benefit to the worker, so it's just another piece of administrative burden back on to those already overworked growers.

 

"When I go out there and talk to growers there's 40 per cent less backpackers knocking on their door this year than every other year."

Ms Chapman said she was pleased with visa changes that would increase the age limit on so-called working holiday makers from 30 to 35.

 

But she said after 18 months of uncertainty, Australia's reputation among as a working holiday destination had been damaged.

 

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"We have got such bad publicity out there at the moment about this backpacker tax, a lesser rate would have maybe made it more attractive to people who have already booked their flights to New Zealand or to Canada," she said.

 

"That reputation, I really have no idea how long it's going to take us to rebuild that, social media is going to play a huge part."

 

Growers say workers have become 'few and far between' during uncertainty

 

Victorian table grape grower John Argiro said he was pleased with the lower tax rate and increased age limit but was frustrated at the changes to superannuation.

 

Mr Argiro said sorting out superannuation for workers was a headache and the government was "getting fat" by seizing 95 cents in the dollar when backpackers depart the country.

 

"The government has double dipped. They've taken the tax rate from 13 per cent, they've added another 6 per cent and they've taken their superannuation so they've hit them another 10-11 per cent when you work it out.

 

"It's a headache, it's another continual red tape that continues to hinder business.

"It's good to see that they've finally made some decision, even though we are not 100 per cent happy at least a decision has been made."

 

Victorian Farmers' Federation horticulture group vice president Emma Germano said her farm had already begun preparing for reduced numbers of seasonal workers.

 

She said she hoped plans to lower the cost of working holiday visas by $50 would help lure prospective workers.

 

"I've pushed back our harvest period and planting period by a number of months," Ms Germano said.

 

"It was a major concern of mine that if we saw a backpacker tax of 32.5 per cent from January 1 that I might really struggle to get staff.

 

"It's going to affect our productivity this season, but it was a risk that we had to mitigate."

Anthony Staatz is a lettuce and broccoli farmer from southern Queensland and president of the Lockyer Valley Growers, a representative group for farmers in the region.

 

The valley grows a diverse range of vegetables and fruit and relies heavily on backpackers year round who make up over 60 per cent of the workforce.

 

He said while he hadn't noticed a decline in numbers of workers on holiday visas, he had no doubt damage had been done to Australia's reputation.

 

"It hasn't been good, it would be better if government would make a clear decision and do their work before they announce a ridiculous policy," he said.

 

"They should have come to industry with something that's at least tangible... that's been the disappointing part of the policy roll out, I think."

 

Mr Staatz said while he was relieved the 32.5 per cent tax was off the table, he's not sure if the current plans are much better.

 

"Logically, the superannuation debate will continue because why not just lift the tax if they are going to recoup that money anyway?

"It would save a lot of mucking around.

 

"Nineteen per cent may or may not be workable but that's where we are at at the moment."

 

Advertising needed to combat damage done

 

The government also announced a $10 million fund for the tourism sector to promote backpacker jobs.

 

Susie Green, the CEO of South Australia's peak apple and pear lobby group, said that money would have to spent in overseas markets to rebuild Australia's reputation.

 

"We're pretty grateful that some common sense has been listened to in this process, and that a decision has finally been made and it will provide some certainty as we move forward from here, which is what we've all been desperately looking for," she said.

 

"The key change is the overall amount has been reduced from the initial proposed 32.5 per cent flat rate down to 19 per cent which is a significant drop and much more compatible with other countries.

 

"It certainly places us in a much better position. That's going to be absolutely critical.

"Unfortunately there's been some damage already done but we need to turn around and really try and spread the good word and get people back here and visit Australia and work at the same time."

 

"A sensible solution" but longer term reforms needed

 

Shenal Basnayake from the Northern Territory Farmers Association said he was grateful the government had listened to farmers' concerns.

 

"The decision was never about the taxation rate. The issue was about access and security of the labour.

 

"The taxation rate was something that was going to impede that."

 

"Now that we've got a clear direction we can move on and farmers can have some confidence in terms of investing in the industry going forward."

While labelling the move as a "sensible solution", Mr Basnayake said longer term solutions were required.

 

"Yes, this is a win right now but the battle still rages. There's a whole range of things happening in the labour space that we need to address."

 

Tasmanians want bi-partisan approach to reforms

 

Primary Employers Tasmania president Glynn Williams led a delegation to Canberra to discuss the proposed tax changes earlier this month.

 

He said he expected a 19 per cent tax rate would enable farmers to lure workers to Tasmania.

 

But he said it was crucial the reforms attracted bi-partisan support.

 

"Throughout this painful debate, which has been a self-inflicted wound by the government, the Labor party has been missing in action.

 

"They didn't put forward what their position would be. It wasn't done in the election. They were whisper quiet."

 

Mr Williams said the Tasmania industry was relieved to have a decision before the end of September.

 

"The greatest thing was the uncertainty - is there going to be a tax or not?

 

"With that ended we want to see the legislation put through as quickly as possible in the upcoming session of parliament."

[Guest The Pom Queen]

does this new regulation only apply to the working holiday visa? (i.e. does it apply to any other temporary work visas?)

WHV only

[ramot]

Might not be a bad thing to bring older WHV holders here with a bit of overseas experience Might be biased as my daughter was employed for that reason as she had worked in several other countries so could bring some fresh ideas to a company. First on a WHV and then kept on on the dreaded 457 visa!!!! Now PR, soon to be a citizen and still working hard here. Her job wasn't on the skills list, so she took a chance, and was prepared for the outcome whichever way it went. Obviously depends on your skills set.

Perhaps a bit of overseas competition for jobs isn't a bad thing?

 

I am probably a very unpopular poster with many, as my son came as one of those on the much maligned student visa, and my daughter originally on a WHV. but as their mum I'm delighted they are here, both very well qualified people, prepared to work hard and commit to Australia, who came here legally under unpopular routes according to some, but I think to Australia's advantage?

Edited October 4, 2016 by ramot

[flag of convenience]

I don't blame the above poster as self interest will usually prevail. One can only take advantage of opportunities that present to ones own advantage. Few would question that, but there is a far wider topic that needs to be debated.

 

The farming/fruit growing lobby should not be the arbitrators to government policy. Pay your workers better, treat them with a bit more respect and perhaps more will stay, rather than those finding it necessary to just to be able to prolong their Australian stay.

 

I know some do treat workers well but many don't and a lot of detail has been exposed with regards to exploitation in recent times. I done the work myself back in the nineties. Something of a shocker back then and horrible reports from some places with regards treatment at the time.

This was pre compulsory dates so a little more laid back as were most things from todays world.

 

No the visa should never be allowed as a backdoor entry into Australia. My view of this, together with the 457 abuse, is that it puts the entire migration program in jeopardy. It furthers the likelihood of an ever increasing backlash against migrants and foreigners in general as living standards decline due to unfair competition favouring business but hardly the nation. Why pay to train when an employer can recruit a 33 year old WHV just off the boat with the possibility of sponsoring them and the PR visa enticement in the future keeping the employee in line? Nothing at all. Meanwhile young Australians are more than ever likely to be living in a country that their parents would not recognise.

An inability to live without a lot of debt and a life of sharing as housing affordability moves ever out of range. Well until the correction anyway. Who knows how that will look?

[Nemesis]

What gets me is when the farmers say there are 40% less backpackers knocking on their door for work and farmers are having to hold back on harvest because they have no workers. Yet on the other side of the coin, you have backpackers saying there is no work out there? Is it just that the backpackers don't want to do the hard graft for the 2nd year?

I know a couple of British early-20s backpackers who have been out there nearly a year. Thought they'd try the farm work to get a second year. After 3 days they gave up and returned to the city cos she had broken a few nails and didn't like being dirty from the fields. and his back was aching a bit. I kid you not, those were the reasons. They are settling for a year in Oz and then a year in new Zealand.