Proposed Government backpacker tax will harm ag industry

WAFarmers stands alongside the National Farmers’ Federation (NFF), state farming organisations (SFO’s) and other industry bodies in launching a national campaign against the Federal Government’s proposed ‘backpacker tax’ which would have detrimental effects on the nation’s agricultural sector.

The #backpackertax campaign will comprise an online petition and social media aimed at harnessing community support for a softening of changes to the way working holiday makers (backpackers) are taxed.

Under the Federal Government’s proposal, backpackers would be taxed as non-resident at a rate of 32.5 per cent on all income from 1 July 2016; however, the campaign would see this figure lowered to 19 per cent.

WAFarmers, the NFF and the other SFO’s maintain that the proposed tax would harm the agricultural industry and communities that rely on backpacker labour during peak times, as the extortionate amount would likely mean the backpackers stay for shorter period of time in Australia, or would persuade backpackers to go somewhere else entirely for their working holiday.

“The use of backpackers to satisfy demand during peak times is critical to the survival of farming businesses and the Australian agricultural sector as a whole,” WAFarmers Chief Executive Officer Stephen Brown said.

“At present, backpackers contribute approximately $3.5 billion to the Australian economy, with roughly 40,000 backpackers working on farms each year and earning $15,000 per annum.

“Their presence in Australia boosts not only productivity in the agricultural sector, but communities and businesses with rely on tourism spending.

“While we agree that backpackers should be taxed, along with the NFF, SFO’s and other industry bodies, we maintain that a more effective tax rate of 19 per cent, achieved by deactivating the tax-free threshold, would be fairer to backpackers and would secure the future of the Australian agricultural industry.

“We, alongside our national and state counterparts, urge farmers, producers, other industry stakeholders and the general public to show their support for our proposal by signing our online petition.”

Implementation of the Federal Government’s proposal has been estimated by Government to raise $540 million in forward estimates, while the proposed 19 per cent tax would generate $315.7 million.

Chair of the NFF Workforce Productivity Committee Charlie Armstrong said any perceived losses between the 32.5 and 19 per cent proposals would be dwarfed by the serious economic impacts of reduced backpacker tourism and associated agricultural losses.

The petition can be accessed here: https://www.change.org/p/australian-government-stop-the-backpacker-tax

ENDS.

All media requests must be directed to WAFarmers Media and Communications Officer Melanie Dunn on (08) 9486 2100 or [email protected].

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