Respite for backpacker community

A MIRBOO North vegetable grower said farmers could “breathe a sigh of relief” after an announcement to scrap a 32.5 per cent tax on working holiday makers.

Victorian Farmers Federation horticulture vice president Emma Germano said it was fantastic the Federal Government had taken farmers’ concerns on board.

Treasurer Scott Morrison announced on Tuesday the government would replace the proposed 32.5 per cent tax on the backpacker workforce with a 19 per cent rate.

The VFF and the National Farmers Federation had long advocated for the reduced 19 per cent tax rate on backpackers as a way to ensure Australia did not lose a reliable labour source to neighbouring countries.

“The proposal originally put forward by the government would have been a massive drain on two of our biggest industries – agriculture and tourism,” Ms Germano said.

“Working holiday makers bring in about $3.5 billion to the Australian economy every year, but now we can breathe a sigh of relief.”

However, Ms Germano said the VFF had concerns the government planned to tax backpackers 95 per cent on superannuation they would accrue while working in Australia.

“We were told at the roundtable discussions industry had with government earlier this year that super was off the table, and not to make any recommendations on this area,” she said.

“But now Treasurer Morrison has announced a large-scale reform to super and we would appreciate the chance to respond.”

Member for Gippsland Darren Chester said the tax change provided employment certainty.

Mr Chester said seasonal workers were a key source of labour in the agriculture, horticulture, tourism and hospitality sectors.

“Working holiday makers fill an important role for local farmers in helping to get their product from the paddock to market,” Mr Chester said.

“Revision of the proposed tax changes will maintain Australia’s place as an attractive destination for working holiday makers, while also ensuring backpackers pay their fair share of tax on their earnings.”