Backpacker tax under the spotlight at Canberra hearing

TOURISM chiefs say families will bear the brunt of the Turnbull Government’s plan to lift the nation’s departure tax by $5 per person to $60 as the backpacker tax comes under scrutiny.

Representatives from the tourism industry, the peak farmers lobby group and Treasury will give their take on the new Backpacker Tax in a hearing in Canberra.

TOURISM organisations have hit back as the Turnbull government’s plan to lift the nation’s departure tax by $5 per person to $60, saying it will have a substantial impact on how families travel.

The increase is part of a package to help fund the government’s rehashed 19 per cent backpackers tax from the first dollar earned, rather than the previously flagged 32.5 per cent.

“It’s not just a cup of coffee, it’s $60. If you are a family of four travelling to one of the short-haul markets like New Zealand ... it is a big deal, it’s a couple of days’ car hire, a couple of days’ accommodation,” Tourism and Transport Forum boss Margy Osmond told a Senate hearing on Wednesday.

The Federal Government’s backpacker tax has come under scrutiny during a parliamentary inquiry this afternoon.

Representatives from the tourism industry, the peak farmers lobby group and Treasury are giving their take on the new working holiday visa tax at a hearing in Canberra.

Barry Abrams, executive director from the Board of Airline Representatives of Australia, told the hearing international airlines were disappointed about the lack on consultation and justification for seeking to increase the passenger movement charge.

The package passed the House of Representatives last week, but Labor wanted the Senate to scrutinise the plan before it is debated in the upper house.

The tourist groups were happy with the backpackers tax at 19 per cent, although would have preferred it stayed at zero.

Rick Drury's employs backpackers to collect pears in Inglewood, Adelaide. Farmers will today have their say on the impact of the Federal Government’s backpacker tax. Picture: Kelly Barnes/The Australian.

The government originally slated a 32.5 per cent tax rate from the first dollar backpackers earned in the 2015 Budget, but has since dropped it to 19 per cent.

The package also includes a 95 per cent tax on superannuation payments once working holiday-makers leave Australia, and a $5 increase in the international departure tax from July 1, 2017, to $60.

The Coalition says Australian farmers will be let down if the Opposition delays the introduction of its revamped backpacker tax measures.

Labor allowed the legislation to pass the Lower House last week, but is reserving its final position until after the Senate committee reveals its findings.

South Australian MP Rowan Ramsey last month admitted the original 32.5 per cent tax flagged would have done a lot of damage to the industry and the new rate of 19 per cent brings Australia into line with other countries.

Mr Ramsey says he’s happy with the result and so is business.

“We’ve got to get it legislated,” he told reporters in Canberra.

But Labor’s agriculture spokesman Joel Fitzgibbon said the tax is ill-conceived, fearing just as many backpackers will be driven away with the 19 per cent rate.

“I call on a divided government to work with the Opposition and all stakeholders to produce an outcome which allows Australia to be internationally competitive,” he said.

Mr Fitzgibbon warned backpacker numbers started falling away the day the tax was announced and the problem continues.