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Federal budget backs small business but adds tourism taxes

Federal budget backs small business but adds tourism taxes
May 13, 2015

While Federal Treasurer Joe Hockey’s 2015/16 budget has been acclaimed for its provision of more than $10 billion on families and small business, tourism has been hit with new taxes.

While making no new investment in funding for tourism marketing, $600 million in new tourism taxes and charges have been introduced.

Working holiday makers, one of Australia’s highest spending categories of visitors, will no longer be treated as residents for tax purposes, removing their eligibility for the tax-free threshold and forcing them to pay tax from the first dollar they earn.

This measure will rake in more than $540 million over four years – more than the government’s new ‘Google tax’.

All visitors applying for a visa offshore will also be hit additional costs for their application charges, with the government raising $437.1 million over four years. Visitors from China will see their application fees increase from $130 to $135, with that market alone footing a $5 million bill, while working holiday makers will be paying an additional $5 million as their application fees increase from $420 to $440.

Commenting on the changes, the Tourism & Transport Forum (TTF) stated that while it welcomed measures to ensure that the overseas purchasing power of Tourism Australia’s marketing spend is protected from currency fluctuations, it was “disappointed” that the government has ignored industry calls to increase marketing funding in real terms.

TTF Chief Executive Margy Osmond stated “with higher taxes and charges and no new money for tourism marketing, Australia is fighting with one hand tied behind its back.

“Ripping more than half a billion dollars from the visitor economy with a new ‘backpacker tax’ is simply ridiculous.

“Taxing working holiday makers from the first dollar they earn, instead of giving them equal treatment with other resident taxpayers, is a backward step and will damage Australia’s international reputation.

“Australia has long been a favourite destination for young people from around the world who live, work and travel here for up to two years, and who spend on average more than $13,000 during their stay. Coupled with the tenth consecutive increase in their application fees, this new tax on working holiday makers will make them think twice about coming here.

“Increasing visitor visa application charges is sending Australia in the wrong direction. With fierce global competition for the visitor dollar, jacking up the cost of visa applications is an enormous own goal. The tourism industry has argued that its vital Australia should be reducing the costs of visas from key markets, like China, to increase our appeal in the face of proactive visa reform by many of our major competitors.

“Despite raking in more taxes than ever from visitors, including the Passenger Movement Charge which will collect $1 billion in revenue for the government in 2015-16, funding for tourism marketing has failed again to increase and is falling further behind in real terms.

“If this trend continues, Australia will be overtaken by countries hungry to support their tourism industries.

“It is disappointing that the government has not taken the bold steps it needs to support the jobs engine that is the visitor economy.”

While reallocating $100 million from the Australia Council for a new National Program for Excellence in the Arts, the budget did confirm $200,000 for the National School for Travelling Show Children (NSTSC).

Created last year to replace the former Queensland School for Travelling Show Children (QSTSC), the NSTSC is travelling school for the children of families travelling on the show circuit.

Working in collaboration with Dubbo Distance Education, the school consists of three travelling classroom caravans catering for 65 students from kindergarten through to year 12. 

In terms of sport and recreation, a statement on the Department of Health website explains that the Federal Government will continue to invest in building a balanced approach supporting grass roots participants, elite sports performance, world-class events and integrity in a bid to harness the unique health, social and economic benefits that sport provides.




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