Backpacker tax raises concerns

TASMANIAN fruit growers will have to “wait and see” whether new taxes on working holidaymakers will reduce the number of transient workers they can attract each season.

In a major income tax overhaul, foreigners in Australia on working holidays will no longer have access to tax break thresholds.

Instead, from July 1 next year, they will be forced to pay at least 32.5 per cent tax. They will have to pay tax from their first dollar earned, instead of enjoying the present tax-free threshold of almost $20,000.

Fruit Growers Tasmania business and development manager Phil Pyke said many backpackers worked in rural and tourism sectors in Tasmania to fund onward travel.

“We believe there won’t be any change, but we will wait and see. Backpackers are important to the industry to cater for surge capacity in peak season,” Mr Pyke said.

“We have many young professionals from European countries who are paid casual rates of $21 an hour, which is more than they earn in their professions in their home country.”

The peak fruit grower body is working with TasTAFE to give locals the skills to enter the industry with a Certificate II in horticulture.

Reid Fruits, one of Tasmania’s biggest growers, has foreign workers who return with friends each year to pick.

Reid Fruits marketing and business development manager Lucy Gregg said she didn’t think the tax would have serious implications.

Announcing the change in the Budget on Tuesday night, Treasurer Joe Hockey said the reform was a key pillar in his blueprint for a fairer tax system. “We want everyone to pay their fair share,” he said.