Slug for tourism in dumb tax on visitors
A Port Douglas backpacker hostel operator has blasted the looming income tax on backpacker earnings, which is due to kick off on July 1.
The federal government has mooted the tax, at a rate of 32.5c in the dollar, to replace a regime in which backpackers typically pay tax on their earnings currently and then get it all back when they finish employment, along with their super contributions.
Tom Quealy, owner of Coral Beach Lodge, labelled the coming tax as a clumsy, shortsighted move that will hurt local businesses by turning away backpackers who the hospitality industry depends on.
“In this area during season, the bars clubs, cafes, where these guys might work 50 hours a week because no Australian wants the job – they fill up all the gaps and now they’re going to pay all this tax,” Mr Quealy said.
“On these wages, no resident Australian taxpayer would normally have to pay tax but these guys are going to pay around $3-4,000 tax all of a sudden. It’s going from zero to maximum overnight.
“That means these visitors will think about going to New Zealand or somewhere else instead of here,” Mr Quealy said.
“Australia competes very heavily with New Zealand for backpackers. They have a flat tax of about 15 per cent in place.
“It’s going to hurt up here especially.
“You would’ve seen last year – every shop had a sign up saying ‘staff wanted’.
“The other problem is that people businesses like cafes are going to come under pressure to pay people cash.”
The new tax was not mentioned in Tuesday night’s budget delivery, dashing hopes by its critics that the controversial money raiser would be ruled out.
In recent months the tourism and agricultural lobbies have been strident in their attacks on the new tax.
It was a key discussion point at a conference of hostel operators in Cairns yesterday.
Tom Quealy, owner of the Coral Beach Lodge in Port Douglas