Tax crisis averted

The backpacker tax of 15 per cent has passed in the Senate after the Federal Government struck a deal with the Greens to pitch in $100 million for Landcare.

Holiday makers on 417 and 462 visas will be taxed 15 per cent – consistent with visa holders under the Seasonal Workers Program.

If the decision had not been made, backpackers would have been taxed 32.5 per cent from January with many farmers concerned they would lose their seasonal workforce that also injected money into local economies and the tourism industry.

Member for Gippsland Darren Chester said the agreement would give the horticultural sector and tourism industry the certainty it needed.

“Working holiday makers are an important source of labour for the horticulture sector and tourism industry,” Mr Chester said.

“Obviously, the preference is to see Australians working. But there are many seasonal job opportunities which are required to be filled by an international labour force.”

Australian Greens leader Richard Di Natale said the party had struck a compromise with the government that would involve backpackers being taxed a nominal rate and their superannuation dropped from 95 to 65 per cent.

“At the same time as we’ve been able to deliver certainty to farmers, we have secured a big victory for our environment, with the government pledging $100 million for Landcare,” Mr Di Natale said.

He said half a billion dollars had been gutted from Landcare in recent years and the agreement would go a long way towards restoring funding community revegetation and landscape rehabilitation projects.

“The Greens were not willing to stand by and risk the tax rate for backpackers jumping to 32 per cent,” Mr Di Natale said.

“That would have been a disaster not just to farmers, but for entire rural communities and the tourism industry as a whole.”