Australia's Treasurer Scott Morrison has said that modelling confirms the revamped backpacker tax puts Australia on a competitive footing with New Zealand, the United Kingdom and Canada. Morrison was defending the new measures amid complaints from tourism that it is subsidising agriculture.
Facing criticisms that tourism was funding - through a $5 increase in the passenger departure tax - a government backdown on the proposal to impose a 32.5 per cent tax rate on non-resident income, Mr Morrison said analysis done for the government showed "the wages that are paid in Australia are greater than in a lot of these other economies and the analysis shows that the money in the pocket of the backpacker after this change would be the same here as it would be in NZ or the United Kingdom, Canada or other competitor countries".
He rejected tourism industry criticism that the government was using it as a "cash cow" to fund the reduction in the proposed tax rate to 19 per cent, a move welcomed by agricultural industries alarmed the original tax rate would starve them of seasonal workers from the ranks of backpackers.
"The backpacker industry is $5 billion a year or thereabouts for the tourism industry," Mr Morrison told Sky.
The government's move to cut the visa application charge for backpackers by $50, and cut the income tax rate would support tourism," he said.
"These backpackers are spending this money on the tourism industry and regions all across the country, so [tourism operators] are the principal beneficiary of these measures."
