ON-FARM

Relief for farmers as politicians reach backpacker tax truce

THE backpacker tax furore may finally have ended, with the Federal Government committing to a compromised tax rate of 15 per cent, to the relief of farmers.

Alex Paull
Relief for farmers as politicians reach backpacker tax truce

The Coalition settled on the compromise after almost two years of debating over the potential ramifications of the original 32.5% tax rate on working holiday-makers, first imposed by former Treasurer Joe Hockey in the 2015 Federal Budget.

Treasurer Scott Morrison said the revised tax rate of 15% - from 19% - would cost the Federal Budget $120 million over four years.

“Today the Government will be working to put in place a bill which will propose 15% on the backpackers' arrangement,” Morrison said.

“We will honour the arrangement that we've come to with Senator Xenophon and we appreciate his continued support on this, as well as Senator Hinch. That means this week hopefully even today, this matter is resolved.”

The tax rate has leapt from 32.5% to the Coalition’s most recent position of 19% as a result of a instituted by former Tourism Minister Richard Colbeck, before the Senate rejected it in favour of a 10.5% rate on Thursday.

National Farmers Federation chief executive Tony Mahar said farmers were relieved that a “painful process” was at an end.

“It has been a painful process but we wholeheartedly welcome the announcement that a compromise rate of 15% has been reached,” Mahar said.

“The NFF back to the Colbeck Review said that a rate between 15% - 19% was a fair one that would attract backpackers to the sector and be comparable with rates paid to Australian workers.

“We now ask that the Senate expedite passage of the relevant legislation to provide the long needed certainty to the sector and allow businesses to start rebuilding backpacker interest in on-farm jobs.

“In time we hope that lessons are learned so that the farm sector is never compromised in this way ever again.”

The 32.5% tax on working holiday-makers was first introduced by Joe Hockey’s 2015 Federal Budget, sparking widespread anger from the agriculture and horticulture sectors.

Farmers were anxious to get the matter resolved, as it would have meant working holiday makers would have been forced to pay the full 32.5% rate as of January 1.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Research Report: Trailing Sheep Feeders (October 2024)

Trailing sheep feeders are on the menu for Kondinin Group's October Research Report with nine popular models covered.

editions

Research Report: Livestock Management Software (September 2024)

Kondinin Group's September Research Report looks at a range of livestock management software platforms which can make life a lot easier when it comes to efficient sheep and cattle production.

editions

Research Report: Grain Storage (August 2024)

This month's Research Report from Kondinin Group looks at the benefits and challenges associated with ground level storage with a focus on growers who have done it successfully.

editions

Research Report: Grouper Bins (July 2024)

This month's Research Report from Kondinin Group looks at a range of Australian-made grouper bins which can make a big difference when it comes to input logistics on the farm.