#Economy#Taxation

Why Australia's backpacker tax fiasco might not have been the disaster we all thought...

Stuart Hodge
|May 23|magazine4 min read

Australia’s reputation as a haven for backpackers and sabbatical-taking students seems to be on the increase once again, according to a leading gap year travel agency.

The Global Work & Travel Co, which serves around 3,000 wishing to head to the country each year, claims that the Australian Government’s drawn out and much-publicised 'Backpacker Tax' debate is no longer having a detrimental effect- despite an initial outcry which saw interest drop by almost a third.

Bookings and enquiries for Australia as a working holiday destination nosedived by as much as 30%, as young travellers changed their plans about heading to Australia and looked at other destinations like the USA or New Zealand instead.

But that was before the government decided to lower the tax to 15% in November last year, whilst also investing $10 million (AUS) on attracting working holiday makers.

The scheme seems to have paid off, according to Global Work & Travel Co’s CEO Jürgen Himmelmann.  

He said: "During the height of the backpacker tax debate, our London and Vancouver offices were inundated with questions from travellers, unsure how the changes would affect their plans.

"It's been hard work to keep up with demand.  We’ve had to double our bookings team to handle it.

"Young people have a strong desire in seeing foreign cultures, we don't expect interest in working holidays to slow down anytime soon."

The company's latest figures have shown that the number of daily enquiries has not just surpassed previous levels, but increased a further 25%.  If this is reflective of behaviour across the industry then it appears that the government really has emerged from the backpacker tax controversy, not just unscathed, but perhaps even emboldened.