The majority voted in favour of a motion to reduce the proposed new tax rate for working holiday visa holders earning under $37,000 from the 19% rate included in the bill to 10.5%.
Tasmanian Independent Senator Jacqui Lambie introduced this motion and explained:
How do we stop [backpackers] voting with their feet and bypassing Australia? We lower the tax rate from 19 per cent to 10.5 per cent, because 19 per cent is not internationally competitive. How do we know that it is not internationally competitive? Because the backpackers, even at nine per cent, are voting with their feet and avoiding Australia like the plague. We have an opportunity in our parliament to fix this problem right here and now. Do it once and do it right.
What do these bills do?
These bills change the income tax arrangements for working holiday visa holders. If passed, they will mean that visa holders will be taxed from the first dollar earned, rather than having the usual tax free threshold.
For visa holders earning up to $37,000, the bills propose to apply a tax rate of 19%.
Read more about the bills in the bills digest.
(1) Schedule 1, item 6, page 5 (line 15) omit "19%", substitute "10.5%".
(2) Schedule 1, item 7, page 5 (table item 1), omit "19%", substitute "10.5%".