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Common sense prevails for farmers and backpackers

NSW Farmers is pleased common sense has prevailed with the Federal Government announcing a reduced rate to the Backpacker Tax, set to be implemented on 1 January 2017.

Treasurer Scott Morrison has announced working holiday-makers will be taxed at a rate of 19 per cent from the first dollar they earn in Australia, up to $37,000 instead of the proposed 32.5 per cent rate announced in the 2015 Federal Budget. 

NSW Farmers’ President Derek Schoen said it’s good news for the agriculture industry and working holiday makers. 

“When the Government first announced the tax rate of 32.5 per cent, it sent shockwaves through the industry. 

“The initial Backpacker Tax proposal would have significantly reduced the inflow of working holiday makers, decimating the supply of seasonal workers relied heavily by the farming sector. Working holiday makers also contribute significantly to rural and regional economy. 

“We are also pleased that $10 million has been allocated for a targeted advertising campaign to potential working holiday makers. The backpacker tax announcement has done its harm to discourage working holiday makers from coming to Australia. Growers have reported reduced rates of response when they put out seasonal work advertisements. We need a well-targeted plan to reverse the declining trend of incoming working holiday makers,” Mr Schoen said.

Other changes announced include: 

  • A reduced application charge for working holiday maker visas by $50 to $390
  • An extension to the age of applicants from 30 to 35 years of age
  • Backpackers will now be allowed to work for the same employer for up to 12 months in the same region, instead of the current six month limit
  • An increase in tax on working holiday makers’ superannuation payments when they leave Australia
  • A registration scheme for employers of working holiday makers
  • A $5 increase to the Passenger Movement Charge from July 1 2017

While we have concerns with the announced superannuation arrangement and registration scheme, we are prepared to work through the details with the Government. 

NSW Farmers is pleased to have collaborated with a number of industry bodies to achieve this reasonable outcome, including the National Farmers Federation and AUSVEG.

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