Introduction Of Income Tax For Working Holiday Makers
Coming into effect in 2016 are the changes to the Australian Working Holiday Visa program and for those young travellers who have plans to visit next year, they won’t be too pleased.
The government are introducing new changes to the WHV that will mean the country will receive an increase in revenue which they have forecasted up until 2020. However, the changes do not benefit the working holiday makers, at all.
Starting from July 2016, working holiday makers will have to pay income tax on the first dollar they earn while working in Australia. This is a change from the current tax free threshold and will introduce a 32.5% tax on all earnings during their time working Down Under.
“We don’t want to increase taxes on Australians, but we do want everyone to pay their fair share along the way” said Federal Treasurer, Joe Hockey.
With the visa program providing essential workers in the rural areas of Australia, who undertake the jobs that are not attractive to the young Australians, you would think that the government wouldn’t want to reduce the number of Working Holiday Makers. These jobs are important to the country and without them there wouldn’t be the cultural exchange that exists. The government shouldn’t be seeking out ways to bleed money out of its tourists but instead encourage more visitors to the country.
The forecast figures have been announced along with the Working Holiday Visa program changes and over four years, the Federal Government is said to generate $540 million which equates to $135 million annually. Although, these numbers will boost the country’s economy there are some doubts on the validity of them.
Drop In Applications
One fear that has been voiced by many people in the travel industry is that the introduction of an income tax to WHM could discourage young travellers to choose Australia as their holiday destination. In the last year, the number of applicants for the Working Holiday Visa has dropped and it has been suggested that the hike in visa prices has been responsible for that.
The Working Holiday Visa is also been given an additional change, keeping in the theme of money as the government have increased the fee from $420 to $440. That’s just another reason for young holiday makers to be put off travelling to Australia.
As seen earlier in the year with increases in fees for other visas, there has been a considerable drop in applicants and this is a serious threat to the visitor economy. By introducing the income tax and throwing out the tax free threshold, the federal Government’s forecast of $540 million over four years could be grossly miscalculated.
Are you a young traveller hoping to embark on a working holiday to Australia? What’s your opinion, is this a wrong move by the Australian Government?