Backpackers and casual foreign workers in Australia will no longer be able enjoy extra cash tax-free.
The Australian Government have just announced its latest budget that will see all foreigners taxed 32.5% from the very first dollar they earn.
In the past, foreigners and citizens alike enjoyed a tax-free threshold on their first $20,000 of income, equivalent to just over £10,000 and a 19% tax rate on earnings up to $37,000 (around £18,000).
The plans, set to be implemented from July 2016 are supposed to deliver an estimated $540 million to the budget bottom line over four years.
Australian treasurer Joe Hockey said: ‘Anyone on a working holiday in Australia will have to pay tax from their first dollar earned, rather than enjoying a tax-free threshold of nearly $20,000.
‘We don't want to increase taxes on Australians, but we do want everyone to pay their fair share along the way,’ he said.
The move will impact on the agricultural sector most, which relies heavily on casual workers, most of them backpackers, to carry out seasonal work such as fruit picking.
The drastic increase in income tax for overseas, casual workers will likely make it increasingly difficult for employers to find flexible, temporary staff.
Foreign home buyers wanting to buy an Australian home or businesses have also been hit – an application fee of at least $5,000 will be implemented from December 1 as well.