Under the original proposal, the Government planned to scrap the tax-free threshold for visitors on working holiday visas, meaning backpackers and other working holidaymakers would pay 32.5 cents tax on every dollar they earned.
TAA has made strong representations to Government that the measure would significantly affect hotels in
regional and remote areas and their ability to attract workers.
"We congratulate the Government for this move as many regional and remote areas rely on seasonal
workers, especially in tourism, and this tax would have seriously impacted the flow of working holiday
visitors," said TAA's CEO, Carol Giuseppi.
"The Government has identified the need to create 123,000 workers in the tourism and hospitality sector
by 2020, and while the hotel industry is working hard to 'grow its own', regional and remote areas in particular will rely on being able to attract backpackers and others to fill shortages in peak seasonal periods.
"It is heartening to see the Government listening to industry concerns and acting to address the issues."
The announcement comes at a time of strong growth in visitor numbers and hotel development in
Australia. The latest National Visitor Survey, released today by Tourism Research Australia, paints a very
promising picture of the state of Australian tourism.
For the year ending December 2015 overnight trips grew 7% to 87.1 million, visitor nights increased 4% to 322 million, and tourism expenditure spend grew 6% to $57.9 billion. With similarly strong growth in
international tourism, Australia's tourism sector contributed $113.5 billion in expenditure in 2015.
"The Government's support of bilateral air agreements, free trade agreements and tourism marketing has
had a significant impact on attracting international visitors, and the fall in the Australian dollar during 2015
stimulated the domestic travel sector while reducing outbound travel growth to just 1% during the year,"
said Giuseppi.
"For the hotel industry, continued growth in visitor numbers is vital if we are to soak up the vast amount of new hotel supply coming into the marketplace.
"It is now estimated that there are over 100 hotel projects in the pipeline, plus a large number of significant refurbishments, and it will be important to generate significant new demand to support this unprecedented level of investment in the hotel sector."