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Farmers breathe sigh of relief at Backpacker Tax decision

Farmers across the nation are today breathing a sigh of relief following the announcement the proposed and highly controversial ‘Backpacker Tax’ would be implemented at a reduced rate of 19 per cent.

First flagged in the 2015 Federal Budget, the measure had originally been set to tax working holiday makers as non-residents at a rate of 32.5 per cent.  However, the agricultural community, fearing its temporary workforce would be decimated by this clear disincentive for backpackers to come to Australia, strongly opposed the measure.  This opposition included a petition which attracted around 50,000 signatures.
 
National Farmers’ Federation (NFF) President, Brent Finlay, said the agriculture sector warmly welcomed today’s common sense conclusion to what had been an ongoing issue for farmers across all Australian states and territories.
 
“The NFF has always advocated for a rate of 19 per cent as a fair and reasonable measure,” Mr Finlay said.
 
“We are delighted today to see Government listen to its constituency and not put in place a tax that would have hurt farm production and, ultimately, the Australian economy.

Treasurer, Scott Morrison, announcing a backdown on the Backpacker Tax in Canberra today.

“We have consistently said agriculture simply cannot do without backpackers and, following today’s announcement, we can again go to the working holiday maker community and say that coming to work on our farms is worth it.
 
“We are also greatly heartened to demonstrate that, when an industry as a whole works together, we can achieve national advocacy outcomes that are positive for both our sector and the broader Australian economy.”
 
Mr Finlay said while he acknowledged there would be some changes to working holiday makers’ superannuation, the measures announced by the Government today were sensible and reflective of the needs of both backpackers and the farm sector.
 
“The nature of these types of working arrangements is that farmers need an immediate, temporary workforce and backpackers want immediate cash in their pockets to spend while travelling - so the approach taken makes sense.
 
 “We now look forward to seeing further detail of today’s announcement and working with Government to make sure we have backpackers coming to our country who are eager to work on our farms and contribute to our rural and regional communities.”

Statement by The Hon. Barnaby Joyce MP, Deputy Prime Minister

The proposed 32.5 per cent tax rate that was to apply to working holiday visa holders will be slashed to 19 per cent following strong representations by The Nationals in Government.
 
Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce, and Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, said the change recognised the importance of keeping regional economies strong.
 
“The win on backpacker tax is a win for our farmers who can get their fruit off the tree, off the vine and off to market,” Minister Joyce said.
 
“The Nationals, including Assistant Minister Luke Hartsuyker and our Senators and Members of Parliament have been fearless champions on behalf of their regions, their agricultural stakeholders and common sense.
 
“The decision to reduce the proposed tax rate from 32.5 per cent to 19 per cent tax maintains Australia’s status as one of the most competitive destinations for working holiday makers, while ensuring they pay a fair level of tax.
 
“Australia’s Working Holiday Maker programme provides a vital source of labour, particularly across the agriculture and tourism sectors.
 
“The peak tourism and harvest season is ahead of us - from mangoes, lychees, bananas and avocadoes in the north, to asparagus, cherries and berries in the south.
 
“I would also like to thank Assistant Minister Luke Hartsuyker for his hard work on the review.”

The win on backpacker tax is a win for our farmers
The Hon. Barnaby Joyce MP, Deputy Prime Minister

Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, said the government had remained committed to resolving the issue quickly and fairly.
 
“More than 1700 stakeholders contributed to the review through written submissions and face to face consultations. They made it clear that an early resolution to the tax rate issue was needed.
 
“Today’s announcement demonstrates the Government listened and is now providing certainty to stakeholders for the upcoming harvest and tourism seasons.
 
“Today’s outcome has been made with an informed understanding not only of the labour challenges facing our agriculture and tourism sectors, but also the challenges facing the Australian economy in a global labour market.
 
“The review was about more than the tax rate, and the government will continue to consider a number of issues and suggestions that emerged through the review.”

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