Backpacker tax saga finally ends

FARMERS are breathing a sigh of relief after the compromise 15 per cent backpacker tax was passed through both houses of parliament on Thursday, marking the official conclusion to the 18 month-long saga.

Alex Paull
Backpacker tax saga finally ends

The matter looked settled earlier this week with Treasurer Scott Morrison pledging to back the 15% compromise, but that was met with staunch resistance from Labor MPs and the Greens, as well as Independent Senator Jacqui Lambie, who were initially in favour of a 10.5% tax.

The new measures now include a 15% tax on all working holiday makers with no tax-free threshold – down from the 32.5% originally proposed by former Treasurer Joe Hockey in the 2015 Federal Budget.

It also includes:

  • A 65% tax on early departure withdrawal of superannuation for backpackers
  • The register of WHM employers will no longer be made public; and
  • A new program will be established to allow dole recipients to undertake farm work without affecting their first $5000 income

New National Farmers Federation president Fiona Simson said the saga’s conclusion was a relief to farmers.

“Despite 18 months of tortuous debate, discussion and deliberation, this has been a victory for common sense,” Simson said.

“The process did not bring out the best in our political system but I am relieved that an outcome was reached.  The NFF advocated long and hard for a fair and competitive tax rate and we held firm.

“As certainty returns to the farm sector and farmers and growers attempt to attract backpackers for this seasons’ harvest, there are lessons for all involved in this exercise of public policy making.”

Queensland Farmers Federation president Stuart Armitage said the 15% tax rate would restore Australia’s competitiveness as a destination for backpackers.

“The entire backpacker tax episode will be remembered as a disappointing chapter in Australian politics where farmers were used as pawns in an unnecessary, highly politicised power struggle,” Armitage said.

“Queensland farmers finally have the certainty we have been calling for and deserve.”

Farmers had been highly critical of how the matter was handled across all sides of politics, and NSW Farmers Horticulture Committee chairman Brett Guthrey slamming the politicians for failing to put farmers at ease earlier.

“What we’ve seen from all sides of politics is a failure to put farmers and regional communities first,” Guthrey said. 

“This deal was struck at five minutes to midnight, leaving farmers lingering to the very end but we’re glad this long drawn out saga is over. 

"We’re pleased common sense prevailed in the end. Now we have to look ahead as we enter the peak fruit picking season.”

More than 40 thousand backpackers work in the agricultural industry in Australia, contributing more than $3.5 billion to the economy.

Guthrey said the original proposal of taxing backpackers at 32.5% from the first dollar they earn in Australia would have had disastrous consequences.

“One thing is for certain- Australia must remain competitive with other countries like Canada and New Zealand who also attract large numbers of working holiday makers.”

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