Backpackers and others could now face higher income taxes thanks to changes in work rules in the Australian government's latest budget.

People on working holiday visas would now have to pay tax on every dollar they earnt, said Treasurer Joe Hockey. The backpacker industry said the Treasurer had exaggerated how much money it could raise from the tax. However, it warned publicity about the changes could scare away young tourists. Young travellers from the UK, Europe and increasingly from Asia often get low-paid jobs in Australia's hospitality or farming sectors to fund their holidays.

Budget savings

Foreigners on working holidays currently pay no income tax in Australia until they earn close to A$20,000, the same tax-free threshold enjoyed by residents. "Anyone on a working holiday in Australia will have to pay tax from their first dollar earned," said Mr Hockey.....Read more here