The National Farmers Federation (NFF) has issued a media release urging the Federal Government to reconsider implementing its ‘Backpacker Tax’ following an online petition which has already been signed by more than 10,500 opposed to the tax.

Background

The ‘Backpacker Tax’ was announced in the 2015 Budget and deems that from 1 July 2016 all working holiday makers are to be taxed as non-residents at a rate of 32.5% on all income.

The NFF says that it agrees backpackers should pay tax, but considers that 32.5% is too high. Instead, the NFF proposes a rate of 19%.

The campaign has been supported by all levels of Australian agriculture, the tourism industry and international travellers who say they will not visit Australia if the tax comes into effect.

The effect of the tax on Australian farmers

One major Tasmanian business, Red Fruits, which exports cherries to more than 20 countries in addition to supplying the Australian market, said that despite having a policy of employing locals first, approximately 70% of its 600 harvest and packing labour is provided by international backpackers.

Tom Reid, owner of Red Fruits, said that “Without them, we will simply not have a major export business of international standard, and would have to retract to a smaller, less sustainable, domestic operation which is not a win for us and not a win for our community. Without backpackers our crops would simply fall to the ground. I am fortunate enough to have regular contact with a large network of horticultural growers across several states of Australia and all of them are concerned about the imposition of the proposed new tax on backpackers while many are seriously considering the risk the tax poses to further investment in the sector.”

Ref: NFF Media Release – 16 February 2016

From the NTAA.