No more tax break for short term workers in Australia on the working holiday visa 417 program as their earnings are now taxable from the first dollar they earn. Currently, first $20,000 are exempted from tax and backpackers are only treated as residents if they have been in Australia for more than six months.
Australian Working Holiday visa 417 has been utilized by many foreigner who allow the local horticultural and food industries to overcome the shortage of local work force. The foreigners have be benefit of earning while visiting the country, however, the employers may take advantage and provide lower wages and poor working conditions.
Australian governments expect to save about $540 millions over the period of four years whereas it will only cost additional $1.5 millions to implement the new tax program.
The imposition of tax on the income of the foreign short term workers under the working holiday visa might deter some foreigners to use it, however, there are no additional measures introduced by the Australian government to reduce the misuse of the program by some employers.
Working Holiday Visa 417 allows foreign nationals aged between 18 and 30 to come and live in Australia for up to 12 months. During their period of stay they can engaged themselves in the employment activities.
Recently ABC reported in a program the widespread of the 417 visa. Australian government had promised to initiate to probe after the program to investigate why the workers were mistreated and paid lower than the standard wages.
The new income tax measures will reduce the earnings of the backpackers but at the same time they may be able to avoid the risk of being exploited by employers and get paid the standard wages.