If you were thinking of an extended stay Down Under, it could be a good time to pack your bags and kiss the rellies goodbye. The Australian government is hoping to lure more travellers by reducing the cost of visas and lowering its proposed income tax rate – however, working holidaymakers will likely take home less money than travellers that came before.
Effective from January 1 2017, the price of a working holiday visa will be reduced by A$50, bringing the cost down to $390.
But the small decrease in visa fee is offset by the introduction of a 19% income tax rate on travellers’ wages. The government previously announced a proposal for a “backpacker tax” – which would be a 32.5% levy on every dollar earned by travellers, but came under fire from travellers, farmers and the tourism industry. Currently, travellers on a working holiday visa can earn up to $18,200 without paying any tax. Now the tax, which will be introduced at the beginning of next year, has been lowered to 19% on incomes up to A$37,000. After the first year, you’ll need to spend three months doing “specified work” that included farming, construction and mining in regional Australia though, rather than hanging around the cities and beaches.
If your wanderlust and desire to backpack developed a bit later on in life, you’ll be glad to learn that the Aussies are also exploring the possibility of extending the working holiday visa from an upper age of 30 to 35.