Stop delaying and axe the tax
Farming groups not happy with six-month delay on the implementation of backpacker tax
THE delayed introduction of the controversial backpacker tax has attracted widespread opposition from the agriculture industry as it provides no certainty to farmers’ that they will have a workforce to help them during the next harvest.
The Federal Government announced that any decision on its plan to tax working holiday visa holders as non-residents at 32.5 per cent would be reviewed after the election, with a final decision on whether to enforce it to be delayed until January 1, 2017.
During his recent tour around Victoria, Deputy Prime Minister and Federal Minister for Agriculture and Water Barnaby Joyce said that he “quite clearly” stated that the government would have the backpacker tax issue resolved before it came in and he has done “precisely that”.
“We have said the conditions that are in place now will continue until the first of January, so if you are intending on coming to Australia and it is in the middle of July then there is absolutely no reason why you shouldn’t come,” Mr Joyce said.
He added that the tax could not be “got rid of” because there are a whole range of issues that may require legislation which cannot be addressed until after the election as the government is currently in a caretaker role.
“We aren’t going to get legislation through both houses of Parliament in a caretaker mode.
“We have made sure after hearing the concerns of so many people that we have, as we said we would, landed a position before the implementation of a new tax rate which would have happened on the first of July, now we have got that extension to the first of January.
“This will allow us time so we can work through an outcome that deals with this over the long term,” Mr Joyce said.
He added that he understood the concerns of those affected by the tax and that he will do something about it to reach an outcome.
“Now I am not going to start declaring what the end of the review is before I have even started it.
“If I take charge of this, and I will, we will land at an outcome that deals with concerns that are held by so many people, but I am not going to declare what those concerns are as that would be completely inappropriate because I haven’t talked to them all yet,” he said.
However, farming groups do not believe the issue has been resolved at all, just delayed until after the election, with both sides of politics not making any clear commitment to abolishing the controversial tax.
The National Farmers’ Federation (NFF) and its member organisations have been fighting hard on the issue with an online petition opposing the measure attracting almost 48,000 signatures.
While NFF president Brent Finlay said he welcomed the government’s acknowledgement that a better long-term agricultural workforce solution is needed, this would not address the short-term workforce crisis facing the farm sector now because of the backpacker tax.
“We have heard stories from farmers across the nation who have found themselves unable to move forward with basic farm management, facing much lower production levels than usual because of the impact this tax will have,” he said.
“A six month delay does not alleviate that concern, and for many means that the tax will now take effect half way through their busiest time of the year.
“Farmers across the country will be wondering how much area to put under crop, if already dwindling backpacker numbers drop off even further at that time,” Mr Finlay said.
He added that an immediate, permanent solution which encourages working holiday makers to travel to Australia and find employment in rural areas must be delivered as a matter of priority.
“The last thing we want is to be in the same situation in six months’ time, with no workable solution.
“If the government is serious about jobs and growth and is really listening to the farm sector, they will deliver a fairer tax rate for backpackers so that farmers have a fighting chance of finding the workers they need, not just next year, but this year as well,” Mr Finlay said.
The Australian Labor Party said it would abolish the backpacker tax if it wins the upcoming Federal election with Shadow Minister for Agriculture Joel Fitzgibbon stating that it would “kill this tax and kill it quickly”.
However, farmers are confused over Labor’s plans should it win the federal election as the opposition continues to criticise the Coalition’s 32.5 per cent tax without offering a solution of its own.
Victorian Farmers Federation (VFF) horticulture vice president Emma Germano said it was unacceptable that both parties did not year have a clear position.
“This is a critical issue for people living in rural areas, and it doesn’t inspire confidence that so close to the election neither side has made a clear commitment to scrap the tax,” she said.
“We can’t sit around until after the election before we get a clear signal from either side that there won’t be a backpacker tax, because one of them will be in government.
“All sides need to step up and commit to scrapping the tax as an election priority.
“The Coalition wants to review the tax and Labor doesn’t know what to do, so what are we supposed to do while they struggle to get their act together?
“Delaying a decision on the tax will be devastating for farmers who will be harvesting their crops in the New Year, which is when we’ll most need the support of backpacker labour,” Ms Germano said.
She added that the tax was a threat to both the agriculture and tourism industries, with more than 40,000 visa holders working in the agriculture industry each year and contributing around $3.5 billion to the Australian economy.
“Working holiday makers are a valuable source of short-term labour for producers and they bring billions in revenue to our national economy.
“The lack of certainty around the tax means that we don’t know how to prepare for this year’s season and backpackers won’t visit here, which will be devastating for two vital industries,” Ms Germano said.
Beechworth Vignerons president Simon Grant, who represents all of the vineyards in Beechworth said the simple answer to the backpacker tax is to “axe it”.
“Virtually all vineyards in Beechworth are handpicked and securing labour at the appropriate time is very difficult and ultimately groups of backpackers end up being employed,” he said.
“If you remove backpacker labour in the marketplace by taxing them out of existence, the shortages could reach crisis point.
“The reality of the situation is that it is difficult to get labour hire at short notice and grape picking is often at short notice.
“There isn’t enough people looking for work and if we have these tourists coming through keen to work and doing it at the right price and providing the right quality of labour, why make it impossible for them?” Mr Grant said.
AUSVEG deputy chief executive officer Andrew White also expressed his disappointment at the Federal Government’s “lack of action” to eliminate the tax.
“Australian vegetable growers rely on backpackers to offset domestic labour shortages and perform the high amounts of manual labour needed in vegetable production,” he said.
“Whether the tax is introduced at the currently proposed level now or in six months, the effect will be the same – it will threaten the availability of this vital labour source and leave growers unable to get crops off the field.
“We hope the Federal Government’s review delivers a sensible solution to this issue which acknowledges the unique needs of the Australian vegetable industry and will continue to enable Australian growers to access this important source of labour,” Mr White said.
Statistics from the Department of Immigration and Border Protection show that the number of backpackers coming to Australia has dropped repeatedly over the past two years, with more than 34,000 fewer visas granted in 2014/2015 than in 2012/2013.
“The ongoing decline in backpackers visiting Australia must be arrested if the Australian vegetable industry is to remain viable, and any further decrease in the number of backpackers visiting Australia could have a crippling impact on the Australian vegetable industry,” Mr White said.
DELAYED TAX: Deputy Prime Minister Barnaby Joyce in Wangaratta said the extension to January 2017 on the introduction of the ‘backpacker tax’ will allow the government to work through a more suitable, long-term outcome.