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Anyone seen a backpacker? The great super tax chase.



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SENATOR NICK SHERRY SHADOW MINISTER FOR RETIREMENT INCOMES AND SAVINGS MEDIA RELEASE

17 June 2003

ANYONE SEEN A BACKPACKER?

The Great Super Tax Chase

A $245 million hole has been blown in the Howard Government’s Budget due to the failure of backpackers and other temporary residents to collect their superannuation when they permanently leave Australia.

The Government originally estimated that a new tax of up to 40% on superannuation payments claimed by departing temporary residents would raise $325 million.

This was based on the assumption that 80 per cent of backpackers and other temporary residents would claim their super payments, but Senate Estimates Hearings have confirmed this figure has been vastly overstated.

Treasury has refused to reveal the extent of the hole, but super funds estimate that the take-up rate has been no more than 10% to 20%.

This means a loss of projected revenue of some $245 million over four years.

The Tax Office is on a wild goose chase searching the world to make contact with over one million former visitors - students, backpackers and various professionals - to request they claim their super, and pay the tax that would apply on transfer.

The campaign includes:

• 100,000 letters sent out, to anyone whose overseas address could be found; • an internet site dedicated to this matter; • a press release issued by the Minister, Senator Coonan, informing visitors of their right to claim super but, ironically, not of the tax payable;

• advertising internatio nally; and • producing leaflets to be placed in visa offices and airports.

Of those found, the take- up has been overwhelmingly unenthusiastic!

Another major super bungle!

And we can only assume that this is at least in part because Senator Coonan’s press release, pleading with former temporary residents to claim their super, has not been reported on in the London Times or the International Herald- Tribune.

For more information or comment please contact: Senator Nick Sherry 02 6277 3128 or 0418 482 807 Lana Joyce 02 6277 3128 or 0414 505 989