The Australian Government has announced that it will reduce the cost of a working holidaymaker visa from AUD440 to AUD390 from 1 January 2017.
In a media statement, MP Scott Morrison also announced that the proposed increases to working holidaymaker tax rates would not go ahead.
Earnings up to AUD37,000 will be taxed at 19%, instead of the proposed 32.5%, with a marginal rate applying to any income above that amount.
To ensure the fair treatment of working holidaymakers and maintain the integrity of the programme, employers will need to register with the Australian Tax Office (ATO). Those who do not register will be required to withhold tax at the 32.5% rate.
Numbers of working holidaymakers in Australia have been in decline since 2012. This can be attributed to a number of factors, including fluctuating exchange rates and less favourable economic conditions in major source countries. The lower tax rates and visa costs are an attempt to boost the number of working holidaymakers to the country.
The Australian government also plans to introduce more flexible arrangements within the working holidaymaker programme. Employers with premises in different regions will be allowed to employ a holder of this visa for 12 months, with the employee entitled to work for up to six months in each region.
Tourism Australia is set to promote the country to potential working holidaymakers through a new AUD10 million global youth-targeted advertising campaign.