The Deputy Prime Minister and Minister for Agriculture and Water Resources: Barnaby Joyce announced that a re-elected Turnbull-Joyce Government would not enact the ‘backpackers tax’ retrospectively back to 1 July 2016 (the date it was announced to commence).

[The so-called “backpacker tax” is the Government’s 2015-16 Budget proposal to remove the tax-free threshold for overseas working holidaymakers in Australia with effect from 1 July 2016, or, more particularly, to impose non-resident tax rates (starting at 32.5%, without the lower rate thresholds) on ‘non-permanent resident’ 417 and 462 Visa Labour holders.

Mr Joyce said the review will form part of a broad review of the workforce shortages faced by the agriculture and tourism industries. Farmers and rural communities are worried that backpackers may choose not to come to Australia, if they have to pay the proposed 32.5% tax burden.

“Upon our re-election, the Coalition will establish an inter-departmental Review into 417 and 462 Visa Labour, which will report by 14 October 2016, allowing any changes to be introduced by 1 January 2017”, Mr Joyce said.

[Minister’s announcement] [LTN 93, 15/5/16]