Backpacker tax breakthrough
The final sitting of Federal Parliament saw the Coalition Government deliver on some of its key promises including the so-called backpacker tax that passed through both Houses of Parliament late last Thursday evening.
This tax will give certainty to those sections of rural and regional businesses that rely on backpackers, commencing in the New Year at a rate of 15%.
I am very pleased that the 15% rate has been agreed to. With this rate, overseas workers will pay a comparable rate of tax as Australian workers. It would not be fair to have Australian workers and backpackers working side by side with the Aussies paying more tax than the backpackers working next to them.
But this doesn’t mean that foreign workers will be disadvantaged by coming to work in Australia. The 15% rate also means that backpackers are better off, in terms of after-tax wages, coming to work in Australia when comparing their wages to New Zealand, Canada or England. Even after accounting for the tax-free thresholds in Canada and England, a working holiday maker earning the minimum wage would take home a bigger pay packet in Australia than in New Zealand, Canada or England.
This outcome was possible because the Government was prepared to negotiate to achieve a positive outcome. It was disappointing that the Labor Party decided to play politics with this issue and unnecessarily prolong the uncertainty around this tax.
It is certainly excellent news for a range of sectors that this issue has been resolved and I know there will be many locals pleased with this result.
Stronger vocational education system
Also in Canberra last week, legislation to rebuild vocational education and training passed through the Parliament. This means that the Coalition Government is delivering a vocational education system that local students and taxpayers can trust.
The Coalition Government’s new VET Student Loans program will replace Labor’s failed VET FEE-HELP scheme which opened the floodgates to shonky providers who ripped off vulnerable students and taxpayers.
VET Student Loans will ensure students and taxpayers from across Western and Far West New South Wales are protected, that skills shortages are addressed and that the reputation of the vocational education sector is restored.
These changes will help ensure that local vocational education and training students are equipped with skills that would lead to employment opportunities and meet the training needs of local businesses and industry.
The Coalition Government’s VET Student Loans program will provide value for money to both students and taxpayers via tougher barriers to entry for providers, properly considered loan caps on courses and stronger course eligibility criteria that align with industry needs. The program will also provide mandatory student engagement measures, banning brokers and commission-based sales tactics that reward enrolment over student progress, and a stronger focus on students successfully completing courses.
Minister for Education and Training Simon Birmingham advised that the new safeguards we’ve put in place mean students can have confidence that the training they are receiving is aligned to workplace needs and strong employment outcomes, and is being delivered by training providers who have met the tougher benchmarks we have set.
The VET Student Loans program will commence from 1 January 2017 but include arrangements for any current VET FEE-HELP students, who have not yet finished their studies, to opt-in to be ‘grandfathered’ through to the end of 2017. Those arrangements could extend beyond 2017 for students in exceptional circumstances such as illness or due to caring responsibilities.
Further information for students and providers is available at http://www.education.gov.au/vet-student-loans.