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Your spending a perfect holiday in Australia. To make sure your holiday goes as per your plan, you started working temporarily for some extra funds. However, you are required to pay taxes for the money you earn in Australia.

The Australian government came to an agreement on the so called “backpacker tax”, it is a reduction of tax from 32.5% to 15% in every dollar earned up to a cumulative income of $37,000, however if the cumulative income is more than that, the standard 32.5% will be applicable. The superannuation of these workers will now be taxed at 65% when they depart Australia. The government claims this tax is imposed to restrict providing additional funds for working holiday makers when they leave Australia and to help Australian residents in their retirements.

However, this rule gives rise to discrimination on backpackers as other workers who are engaged on temporary work visas are entitled to claim their superannuation benefit upon the expiry of their visa and are subject to a minor portion being lost to taxation.

The major issue relating to this is employment rights and standards. Due to the global mobility of workers, changes are being made to protect these rights. What the Australian government is doing is passing the international mobility as social security rights. This contradicts with working holiday maker rights. Although it is unlikely to be of considerable financial implication, it has to be considered in the context of the frequency and persistence of reports of offensive and biased practices. These reports have prompted the Fair Work Ombudsman to establish the Harvest Trail Inquiry to investigate employment practices and to seek remedies for workers. Yet there appears to have been slight improvement.

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