National Farmers' Federation

Backpacker tax petition eclipses 10,500; farmers urge Government to reconsider

The online petition developed to urge Federal Government to reconsider implementation of the ‘Backpacker Tax’ in July, which would create severe labour shortages in the agriculture sector and stifle regional growth, has reached more than 10,500 signatories. Launched in the first sitting week of Parliament, a fortnight ago, by the NFF and its member organisations, the petition has gone on to attract signatories from all levels of Australian agriculture, the tourism industry and international travellers who say they will not visit Australia if the tax comes into effect. The campaign has also been supported by the #backpackertax social media campaign across Facebook and Twitter. The ‘Backpacker Tax’ was announced in the 2015 budget and deems that from 1 July 2016 all working holiday makers are to be taxed as non-residents at a rate of 32.5 per cent on all income. The NFF agrees backpackers should pay tax, but considers the rate of 32.5 per cent too high. Instead, the NFF proposes a rate of 19 per cent, achieved through deactivation of the tax-free threshold, which would be fairer to both backpackers themselves and the industries who rely on them for seasonal work. Tim Reid, owner of Reid Fruits, one of Australia’s largest cherry producing operations, 45 minutes from Hobart, said the tax would severely limit his ability to secure an adequate workforce and had no doubt there would be negative implications for his business. “We export to more than 20 countries in addition to supplying the Australian market and employ a permanent workforce of 20 which swells to 600 from December to February during cherry harvest season,” Mr Reid said. “Despite having a policy of employing locals first, approximately 70 per cent of harvest and packing labour is provided by international backpackers who cater for the surge in staff requirements during peak periods and which can be unpredictable due to climatic and market influences. “Without them, we will simply not have a major export business of international standard and would have to retract to a smaller, less sustainable, domestic operation which is not a win for us and not a win for our community. “I am fortunate enough to have regular contact with a large network of horticultural growers across several states of Australia and all of them are concerned about the imposition of the proposed new tax on backpackers while many are seriously considering the risk the tax poses to further investment in the sector. “Government has invested heavily in eliminating barriers to trade through the finalisation of key Free Trade Agreements, biosecurity access negotiations and market development programs so to now put the opportunities created by this work at risk is completely counterproductive. “Without backpackers our crops would simply fall to the ground.” National Farmers’ Federation President, Brent Finlay, said farmers from a range of commodities across Australia had expressed similar views and the concern surrounding the ‘Backpacker Tax’ had been well demonstrated by the strong response to the online petition. “Let’s make no mistake, this tax poses a serious threat to thousands of Australian agricultural businesses,” Mr Finlay said. “While Government may be set to raise $540 million of the forward estimates through implementation of the 32.5 per cent rate, softening this to 19 per cent would still earn $315.7 million directly and generate many hundreds of millions more through the ongoing success of farming operations, tourism and regional spending. “We urge Government to reconsider and to make what we see as a simple and common sense decision to help build, grow and strengthen agriculture and regional economies.” To join the petition go to https://www.change.org/p/australian-government-stop-the-backpacker-tax

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