Budget 2015-16

Legend100

No tax free threshold for anyone on a WHV from 1 July 2016......that could really put people off coming out on a 417 given that a large proportion of jobs people do on a WHV are low paid.

Zambia

Legend100 wrote: »

No tax free threshold for anyone on a WHV from 1 July 2016......that could really put people off coming out on a 417 given that a large proportion of jobs people do on a WHV are low paid.

32.5 cent of every dollar earned on a whv will go to revenue.

Currently at 19cent

Mellor

Legend100 wrote: »

No tax free threshold for anyone on a WHV from 1 July 2016

Zambia wrote: »

32.5 cent of every dollar earned on a whv will go to revenue.

Am I reading these posts correct, that there has been two changes to the WHV tax brackets.
The $18k tax free allowance is removed for WHVs, and also the $18-37k tax bracket at 19% is gone. :eek::eek:

That's huge, equates to an extra $8,453 per year in tax for somebody on a WHV. They are really just massively increasing the risk/benefit of non-declared income on and ABN.
Bye, bye tax refunds on WHV.

al22

I always think that Ireland should abolish tax credits completely and every income should be taxed from 0.01

Tax credits means that decent working people can not live without these tax credits and rely on tax credits instead being working any job should mean to earn enough to pay tax and have enough money to live after paying tax.

mandrake04

Legend100 wrote: »

No tax free threshold for anyone on a WHV from 1 July 2016......that could really put people off coming out on a 417 given that a large proportion of jobs people do on a WHV are low paid.

As a voter I have no problem with this and think it's well over due, a WHV is a primarily a holiday visa for young people to travel for a year and supplement their travel money with occasional work. I doubt it will put off genuine adventure seekers.

I would say a lot of WHVers select non-resident by mistake on the Tax File deceleration pay full whack anyway and don't bother putting in a tax return because they are unaware so it made no difference to those type of people anyway.

punk_one82

mandrake04 wrote: »

As a voter I have no problem with this and think it's well over due, a WHV is a primarily a holiday visa for young people to travel for a year and supplement their travel money with occasional work. I doubt it will put off genuine adventure seekers.

I would say a lot of WHVers select non-resident by mistake on the Tax File deceleration pay full whack anyway and don't bother putting in a tax return because they are unaware so it made no difference to those type of people anyway.

Agreed that the bit in bold is the intended reason for the WHV, but from my own personal experience the WHV has now become an initial gateway into Australia for people to look to move on to a 457 visa. I think the vast majority of people won't be all that bothered by the new tax situation though. Still sucks if you're not earning a whole lot to begin with.

Mellor

mandrake04 wrote: »

As a voter I have no problem with this and think it's well over due, a WHV is a primarily a holiday visa for young people to travel for a year and supplement their travel money with occasional work. I doubt it will put off genuine adventure seekers.

And extra $8.5k is a huge hike for an $37-40k income.
It wasn't long ago that they were talking about cracking down on WHV's being exploited.

I disagree that it's only for "occasional" work. It's for temporary work, the amount needed varies from person to person.
It's all well and good if daddy is funding somebody's gap year. But not everybody has that option. Lots of world travelers genuinely need to work as they go.
Even on the likes of a J1 most students wouldn't be in a position to go without for too long.

Where you ever on a WHV? Or what was your path to citizenship?

Zambia

From today's abc news

People from overseas coming to Australia on a working holiday will no longer be eligible for the $18,000 tax free threshold, and instead have to pay tax at 32.5 per cent on every dollar they earn up to $80,000

.

mandrake04

Mellor wrote: »

And extra $8.5k is a huge hike for an $37-40k income.
It wasn't long ago that they were talking about cracking down on WHV's being exploited.

I disagree that it's only for "occasional" work. It's for temporary work, the amount needed varies from person to person.
It's all well and good if daddy is funding somebody's gap year. But not everybody has that option. Lots of world travelers genuinely need to work as they go.
Even on the likes of a J1 most students wouldn't be in a position to go without for too long.

Where you ever on a WHV? Or what was your path to citizenship?

Well we may disagree but in the spirit of what a WHV actually is from immigration a website.

Australia's Working Holiday visa programme establishes arrangements to encourage cultural exchange and closer ties between countries, by allowing young people to have an extended holiday, and supplement their funds with short-term employment. The programme has a special focus on helping employers in regional Australia to meet short-term employment needs.

The programme helps Australian regional employers by encouraging working holiday visa holders to seek short-term and casual work in specified industries in regional Australia.


https://www.immi.gov.au/media/fact-sheets/49whm.htm

Yes I was on a WHV myself over 10 years ago when the tax free threshold was $6000 and maximum employment time with an employer was 3 months. If the threshold was 0 then I doubt I would have been concerned.

I currently pay $35-40K a year in tax which I am hardly over joyed with but its one of those necessary evils of life.

Mellor

punk_one82 wrote: »

but from my own personal experience the WHV has now become an initial gateway into Australia for people to look to move on to a 457 visa.

I understand where you are coming from. Some people have no sense of travel at all, and its purely a stepping stone to 457/PR etc. To the extent where people feel entitled to their nest visa. Which is obviously wrong, even if many of us actually went that sort of route.

But, nowhere does the immi page for the 417 mention "occasional work". As everybody's circumstances are different. Let's be realistic, australia isn't SE Asia, its an expensive country. A 12 month holiday is gonna cost 10's of thousands. Exact cost will obviously vary depending on what you do.

If a WHVer is going to take home$8.5k less, then they'll need to work even more. Maybe a few months more.
So these changes are actually making the intention of the WHV harder to achieve.

aido79

I think the idea behind this may be to reduce the unemployment rate in the long-term by discouraging people on working holiday visas from applying for low paying jobs and give more opportunity to unskilled Australians especially with the mining sector slowing down.
The government has been unable to discourage employers from hiring people on working holiday visas rather than Australians so they may be trying it from another angle.This will cut unemployment and reduce the amount of social welfare paid out.
However the government are shooting themselves in the foot in one way because it will discourage backpackers from coming to Australia if the cost of living is too high compared to wages. Most of the money earned by backpackers goes back into the Australian economy so there will be a loss of income in areas like tourism and hostel type accommodation.

Zambia

You see if it does impact tourism it's an easy change back.

It's sad to think though you could hire two staff and regardless of work value the resident earns 13.5 cent more.

Mellor

mandrake04 wrote: »

Well we may disagree but in the spirit of what a WHV actually is from immigration a website.

The immi website currently phrases it differently, but I don't disagree with any of that. See my post above. I agree with that spirit of the WHV.

However it doesn't mention occasional anywhere. "Short-term" in this case is up to 6 months.
And the fact remains that these changes will mean a WHV will have to work more to achieve the same supplementation, which goes completely against the spirit of a WHV that you refer to above. That alone pretty much undermines that whole arguement.

Yes I was on a WHV myself over 10 years ago when the tax free threshold was $6000 and maximum employment time with an employer was 3 months. If the threshold was 0 then I doubt I would have been concerned.

The threshold was 6k when I came too. And IIRC, the tax rate was a paltry 15% at that time. So removing the threshold would have cost us $900. That's nothing really. It wouldn't have had any impact on my WHV.

But they haven't just removed the threshold here. They've also bumped them up into the higher tax bracket. Not sure if you missed that.
So the tax costs now almost 10 times what in would have cost you or I without a threshold. The two situations aren't remotely comparable.

To supplement their funds by an equivalent amount, a WHV will need to earn an additional $12.5k. How many weeks do you think that is on a typical WHV wage. 3 months? 4 months?
As I said, for that reason, these changes are completely contrary to the spirit of a WHV.

I currently pay $35-40K a year in tax which is I am hardly over joyed with but its one of those necessary evils of life.

Yes of course, we all have to live with it. I'm hardly overjoyed when I see my total tax in black and white every July. I'm certainly paying a lot more than people on a WHV.

Mellor

Zambia wrote: »

You see if it does impact tourism it's an easy change back.

It's sad to think though you could hire two staff and regardless of work value the resident earns 13.5 cent more.

For the first $18k, the resident is earning 32.5c more.

lol equality

mandrake04

Mellor wrote: »

The immi website currently phrases it differently, but I don't disagree with any of that. See my post above. I agree with that spirit of the WHV.

However it doesn't mention occasional anywhere. "Short-term" in this case is up to 6 months.
And the fact remains that these changes will mean a WHV will have to work more to achieve the same supplementation, which goes completely against the spirit of a WHV that you refer to above. That alone pretty much undermines that whole arguement.


The threshold was 6k when I came too. And IIRC, the tax rate was a paltry 15% at that time. So removing the threshold would have cost us $900. That's nothing really. It wouldn't have had any impact on my WHV.

But they haven't just removed the threshold here. They've also bumped them up into the higher tax bracket. Not sure if you missed that.
So the tax costs now almost 10 times what in would have cost you or I without a threshold. The two situations aren't remotely comparable.

To supplement their funds by an equivalent amount, a WHV will need to earn an additional $12.5k. How many weeks do you think that is on a typical WHV wage. 3 months? 4 months?
As I said, for that reason, these changes are completely contrary to the spirit of a WHV.


Yes of course, we all have to live with it. I'm hardly overjoyed when I see my total tax in black and white every July. I'm certainly paying a lot more than people on a WHV.

I can see what are saying, but so what?

I still think plenty of WHVers will come. Even if the numbers did fall away they will just open the 462 visa to more Asian countries as they already have added Indonesia, Maylasia and Bangladesh.

aido79

On a minimum wage job at 38 hours it would mean a difference of around $150 a week. I can't see many backpackers being happy with that.

mighty magpie

Mellor wrote: »

Yes of course, we all have to live with it. I'm hardly overjoyed when I see my total tax in black and white every July. I'm certainly paying a lot more than people on a WHV.

You pay more then because you earn more. Last I checked income tax regulations are the exact same whether citizen, PR, 457 or WHV.

What a nonsense statement.

Zambia

mandrake04 wrote: »

I still think plenty of WHVers will come. Even if the numbers did fall away they will just open the 462 visa to more Asian countries as they already have added Indonesia, Maylasia and Bangladesh.

Really?

Mellor

mandrake04 wrote: »

I can see what are saying, but so what?

From a personal POV, I just don't like to see anyone get excessively screwed by the system. I also have a very low tolerance for politicians spouting bullshit. The treasurer, Joe Hockey said it was "levelling the playing field". Sure it is Joe. Instead of treating everyone exactly the same, lets take a person, doing a income job and tax him significantly more than his colleagues. Playing field leveled

And from an economically POV (which is the Governments POV I suppose), there comes a point when the fall off in WHVs coming, or shorter stays, lower tourism activity, means that the total revenue generated is less than before. Which means the changes are an economical failure.

I'm no by means an expert in economics, but its fairly obviously that taxing every body to the hilt isn't necessarily going to generate the most revenue, its a balancing act.

I assume that the changes apply equally to 462 visas, but I don't know for sure.

aido79

mighty magpie wrote: »

You pay more then because you earn more. Last I checked income tax regulations are the exact same whether citizen, PR, 457 or WHV.

What a nonsense statement.

This thread is about the government changing the tax regulations so that not everyone is taxed the same.

Mellor

mighty magpie wrote: »

You pay more then because you earn more. Last I checked income tax regulations are the exact same whether citizen, PR, 457 or WHV.

What a nonsense statement.

lol, did you even read any part of this thread.
What a ridiculous post.

mighty magpie

Mellor wrote: »

lol, did you even read any part of this thread.
What a ridiculous post.

Yeah I've read through it and I'm aware there's potential for it to change but currently circumstances are the same for everyone so I don't know what you're trying to achieve by saying you pay more tax than WHVers.

mandrake04

Zambia wrote: »

Really?

Yep, Vietnam, Greece and Vietnam have been cleared to be added to the WHV 462 and they were talking about adding capped WHV for China & India.

Even at 32% tax there would be plenty willing to get their feet here.

Slideways

mandrake04 wrote: »

I would say a lot of WHVers select non-resident by mistake on the Tax File deceleration pay full whack anyway and don't bother putting in a tax return because they are unaware so it made no difference to those type of people anyway.

Id say the vast majority know all about tax returns. All you have to do is view here or facebook around July to see the spate of questions regarding good accountants etc.

Its a real shot to the kidneys for all concerned. From the proper 'in the spirit style backpacker' to the person who lands in Perth, never leaves and is looking for a 457 visa from day one.

I'd like to think I was somewhat in a happy medium, came in 06, worked on a construction crew doing pipelines for 5 months and earned great money, then spent the majority of it in the next 6 months touring and hooring around the country seeing 70% of the coast in a clapped out Mitsubishi Magna.

If this tax system was in at the time I just could not have affored to do so. I would have had to have worked for longer and travelled for less and I do not fall into the stereotype of getting pissed in Rosies every weekend.


IMO, it is very short sighted and if the government believe having other countries allowed access will somehow boost the economy they are sadly mistaken. However much Paddy will try and bring out of the country wont have a look in with the poorer Asian nations

ArseBurger

mighty magpie wrote: »

Last I checked income tax regulations are the exact same whether citizen, PR, 457 or WHV.

Nope.

Mellor

mighty magpie wrote: »

Yeah I've read through it and I'm aware there's potential for it to change but currently circumstances are the same for everyone so I don't know what you're trying to achieve by saying you pay more tax than WHVers.

I really don't see how you could of read any of it tbh.
The thread is about the latest budget, and the fact that it will no longer be the same for people on working holiday visa. They're removed the resident for tax purposes option for people on a WHV.

You've zoned in on one comment and you are taking it way out of context.
If you bother to read my posts you'd see that I was defending the WHV's position. I accept that I should pay more tax and I don't agree with hitting the low earners with a tough 32% rate from the get go.

mandrake04

Mellor wrote: »

From a personal POV, I just don't like to see anyone get excessively screwed by the system. I also have a very low tolerance for politicians spouting bullshit. The treasurer, Joe Hockey said it was "levelling the playing field". Sure it is Joe. Instead of treating everyone exactly the same, lets take a person, doing a income job and tax him significantly more than his colleagues. Playing field leveled

And from an economically POV (which is the Governments POV I suppose), there comes a point when the fall off in WHVs coming, or shorter stays, lower tourism activity, means that the total revenue generated is less than before. Which means the changes are an economical failure.

I'm no by means an expert in economics, but its fairly obviously that taxing every body to the hilt isn't necessarily going to generate the most revenue, its a balancing act.

I assume that the changes apply equally to 462 visas, but I don't know for sure.

No one needs to get excessively screwed, there's no one holding a gun to anyone's head making them work and pay extortionate tax.

Nor do they have to stay 365 days on a WHV, if the funds run low they can always go back to their home countries. As above Tax is an unfortunate fact of life it is what it is.

Plenty of other nationalities only come on a WHV work a month here or month there and go home after 6 or so months happy enough from their 'experience'.

I hardly think the whole country will fall apart if some 417 WHVers decide they are going to be taxed more and dont come, like I already said plenty of 462 WHVers which are opening up to more countries.

you might see 15,000 less Irish but im sure out the worlds fastest growing economy and 1.2Bn people they might be able to scrape up 15,000 Indians wanting to get their chance.

On a side note, always people on here posting on here that they are scratching for work or cant get farm work maybe this might solve that.

Mellor

Slideways wrote: »

If this tax system was in at the time I just could not have affored to do so. I would have had to have worked for longer and travelled for less and I do not fall into the stereotype of getting pissed in Rosies every weekend.

That's what it boils down to for me.
The outcome of this measure by the ATO is completely at odds with the goals of the DIBP/the spirit of the WHV

mighty magpie

ArseBurger wrote: »

Nope.

Aw well, I'm sitting in the office on my 417 beside a citizen, 457 holder and someone on PR. Everyone here adheres to the 18.2k allowance and same tax % brackets. But yeah, you said nope so ok.

aido79

mighty magpie wrote: »

Aw well, I'm sitting in the office on my 417 beside a citizen, 457 holder and someone on PR. Everyone here adheres to the 18.2k allowance and same tax % brackets. But yeah, you said nope so ok.

That's the case this year but from July 2016 that will change. It's not a case of there is potential for it to change as you mentioned earlier...it has been decided.

Legend100

mighty magpie wrote: »

Aw well, I'm sitting in the office on my 417 beside a citizen, 457 holder and someone on PR. Everyone here adheres to the 18.2k allowance and same tax % brackets. But yeah, you said nope so ok.

This is assuming you are tax resident of course! There are currently different rates for non residents (which should apply to a large portion of WHV people but it is massively abused)

From a tax legislation point of view, this spits in the face of numerous Aussie tax treaties under the residence clause. Glad my 417 days are long behind me!!

mandrake04

Slideways wrote: »

I
IMO, it is very short sighted and if the government believe having other countries allowed access will somehow boost the economy they are sadly mistaken. However much Paddy will try and bring out of the country wont have a look in with the poorer Asian nations

You are assuming that all of poor Asian countries have poor citizens and no middle class? Pretty ignorant.

For a 462 visa countries like Argentina, Bangladesh, Indonesia, Turkey, Malaysia, Poland, Portugal, Spain or Uruguay, you must hold a tertiary qualification or have satisfactorily completed at least two years of undergraduate university study.

If they can afford university and maybe can afford the $5000 then nothing to stop coming on a WHV and its likely they are better educated than some of the rubbish we have been sending out.

India has a huge IT sector and not everyone there is poor, you only look at the 457 and PR grants and both India & China are at the top of the table.

ObeyTheSuit

mighty magpie wrote: »

Aw well, I'm sitting in the office on my 417 beside a citizen, 457 holder and someone on PR. Everyone here adheres to the 18.2k allowance and same tax % brackets. But yeah, you said nope so ok.

I've been all of the above and Magpie is right. I nearly got screwed hard when I did my tax the first time because of the % difference. My employer taxed me as a resident. Problem is under Aussie law it's not their problem they didn't pay the right tax it's yours.

Anyway, enough with the WHV stuff. The Budget is a little more than just that.

http://www.budget.gov.au/ have a read. I'm still going through it at the moment but as a person who is in a childless relationship I'll probably lose out again.

Mellor

mighty magpie wrote: »

Aw well, I'm sitting in the office on my 417 beside a citizen, 457 holder and someone on PR. Everyone here adheres to the 18.2k allowance and same tax % brackets. But yeah, you said nope so ok.

Right now its the same, but that's not going to be the case anymore.
I'm not sure if you being awkward to troll, or you just can't grasp that future changes have been announced.

ObeyTheSuit wrote: »

I've been all of the above and Magpie is right. I nearly got screwed hard when I did my tax the first time because of the % difference. My employer taxed me as a resident. Problem is under Aussie law it's not their problem they didn't pay the right tax it's yours.

I've been all of the above too. And while it was the case, it no longer will be.

FWIW It makes no difference whether your employer withholds tax based on resident or non-resident. It goes by your tax return.

Cooperspale

Legend100 wrote: »

No tax free threshold for anyone on a WHV from 1 July 2016......that could really put people off coming out on a 417 given that a large proportion of jobs people do on a WHV are low paid.

Maybe
But this is the one thing that will not personally affect voting Australians & that's who Tony & Joe are trying to keep happy.
A much bigger money spinner would be dropping negative gearing but pretty much all of parliament & quite the number of ordinary Aussies are landlords these days so that wouldn't swing well at all.

GladWrap

The changes were a long time coming. They were going to slash the number of visas issued but intense lobbying swayed the government to eliminate the threshold instead.

Good decision.

In terms of this:

Problem is under Aussie law it's not their problem they didn't pay the right tax it's yours.

And under that same law you have the right to have your return reviewed and corrected should you find an anomaly. At the end of the day it's your responsibility to check your return before submission and if you don't understand what your accountant is doing, to ask. It's not hard.

Peregrinus

Mellor wrote: »

That's what it boils down to for me.
The outcome of this measure by the ATO . . .

This is not a measure by the ATO. It's been announced in the Federal budget.

Mellor

Peregrinus wrote: »

This is not a measure by the ATO. It's been announced in the Federal budget.

Yeah, I know it came from the budget. Technically I should have said the Department of the Treasury, of which ATO is an office. But I was lazy and were for the cheap acronyms.

Peregrinus

Mellor wrote: »

Yeah, I know it came from the budget. Technically I should have said the Department of the Treasury, of which ATO is an office. But I was lazy and were for the cheap acronyms.

Technically you should have said the Cabinet. Treasury provides the know-how and technical support for the budgetary process, but policy decisions (like this) are for the Cabinet, not the Treasurer. And the ATO is substantially distanced from these policy decisions.

Mellor

Peregrinus wrote: »

...but policy decisions (like this) are for the Cabinet, not the Treasurer.

Really?
I thought (incorrectly) that the senior ministers, made submissions for funding and advised on various issues, but the control of the final document rested with the PM and treasurer. You way makes more sense tbf

Peregrinus

The Cabinet gets to say Yay or Nay. Of course, by the time it gets to Cabinet, it has already been agreed between the Treasurer and the PM, so there would have to be a real groundswell against it in Cabinet to stop it at that point. (Though, with Abbott positioned as he currently is, now is the kind of time such a thing might happen.)

The point is, though, it's a long way from the kind of decisions that do actually get taken at ATO level. There are decisions that can reasonably be called ATO decisions; this isn't one of them.

jank

The cost of citizenship and other visas are likely to go up as well.

Mellor

jank wrote: »

The cost of citizenship and other visas are likely to go up as well.

Yeah I seen citizenship will move to full cost recovery. Anybody know what that means in $$$'s

Browney7

Seems to be going full circle from the days 457ers were coining it on the living away from home allowance!

Can't see too many Aussies fruit picking!

ObeyTheSuit

GladWrap wrote: »

And under that same law you have the right to have your return reviewed and corrected should you find an anomaly. At the end of the day it's your responsibility to check your return before submission and if you don't understand what your accountant is doing, to ask. It's not hard.

Of course you have the right to review. The problem wasn't the tax return.
The problem was my employer on a WHV paid the norm rate of tax for a resident where I was expected to pay at a higher tax bracket (at the time I didn't know this). So when I had an accountant do my tax return it showed up that I owed a lot more money that I was completely unaware of. Does that make more sense? My point is that when employed on a WHV that you should pay extra attention to your pay slip to ensure this does not happen to you. I got out of it in the end but it wasn't a nice thing to find out after year one.

ArseBurger

mighty magpie wrote: »

Aw well, I'm sitting in the office on my 417 beside a citizen, 457 holder and someone on PR. Everyone here adheres to the 18.2k allowance and same tax % brackets. But yeah, you said nope so ok.

That's PAYG. That's not the only tax implication. Depending upon your status (PR/Citizen/Visa holder) you are entitled to claim tax back on different things. Also, there are tax implications if you own property in a different country and are a citizen or hold PR.

So yes, there are different taxes for different statuses.

Mellor

ArseBurger wrote: »

Depending upon your status (PR/Citizen/Visa holder) you are entitled to claim tax back on different things.

Like what?

(im aware you can claim expenses, i'm asking about specifically what you can claim differently on PR/Citizen/Visa holder)

mandrake04

Mellor wrote: »

Like what?

(im aware you can claim expenses, i'm asking about specifically what you can claim differently on PR/Citizen/Visa holder)

https://www.ato.gov.au/individuals/ind/rental-properties---claiming-travel-expenses-deductions/?page=6

markymark21

Lots of back packing jobs are off the books so I'd imagine WHV holders will be trying even harder to find cash only work. pretty easy in hospo and construction anyway