Peak horticulture body, Growcom is dismayed that the government has not moved to address the backpacker tax issue in the Federal Budget.
Growcom CEO, Pat Hannan, said it was astonishing that despite receiving an alternative proposal endorsed by both the Agriculture and Tourism sectors, the government has made no move to change the controversial tax to be introduced on 1 July 2016.
”Make no mistake, the Government has put agriculture generally, and our own production horticulture industry in particular, in serious danger – a step that is completely inconsistent with the current election and budget rhetoric about supporting small businesses,” Mr Hannan said.
“Whilst there are rumours that the government is planning an initiative to take to the election, growers need certainty.
“This issue should not be a political football – growers have to make decisions about planting crops now, and these decisions rely on having access to labour.”
Government may have a long term workforce plan but growers have a short term labour issue which will have ramifications for the whole community if key fruit and vegetable commodities are not available, or increase in price as a consequence of labour shortages.
It was made clear to Government that the plan, which will mean working holiday makers (backpackers) will pay 32.5 cents in the dollar from the first dollar they earn will have devastating consequences for labour supply to the horticulture industry.
“Our growers rely on backpackers – particularly at harvest time. The viability of many farms, and the livelihood of many growers and their families, has been put at risk by the Federal Government’s decision,” Mr Hannan said.
“Industry put forward a workable compromise position of a 19 per cent tax rate for backpackers with no tax free threshold and it is our understanding that this was taken forward to Cabinet.
“Backpacker numbers have been dropping over the past two years, with over 34 000 fewer visas granted in 2014/15 than in 2012/13. Whilst there are several factors there is no doubt that the Federal Government’s Backpacker Tax is a significant one – with word already spreading amongst backpackers both within Australia and overseas on social media.
“While Australian growers’ first preference is always to employ local workers, there is simply not enough local labour to satisfy demand during peak harvesting periods, and backpackers play a vital role on Australian farms by providing a workforce during these critical times.
"We are calling on the treasurer to urgently reverse this ridiculous counter-productive measure and show meaningful support to agriculture and regional communities.”
AUSVEG
Vegetable industry body AUSVEG has also expressed its disappointment at the lack of action taken by the Federal Government to change or eliminate the backpacker tax.
“The decision by the Federal Government to keep the proposed backpacker tax unchanged in the Federal Budget could impact the ability for Australian vegetable growers to harvest their crops and potentially devastate the industry,” said AUSVEG Deputy CEO Andrew White.
“Australian growers rely on backpackers to offset domestic labour shortages and perform the high amounts of manual labour needed in vegetable production. This decision endangers the availability of this important labour source and could leave growers unable to get crops off the field.”
“We initially welcomed the Federal Government’s review into this tax because it appeared as though they were prepared to acknowledge the strong opposition from Australian farming and tourism bodies. We hope that the Treasurer will be able to find a resolution in the next few weeks that will not threaten growers’ ability to attract the workers they need to harvest their crops.”
“While Australian growers’ first preference is always to employ local workers, there is simply not enough local labour to satisfy demand during peak harvesting periods, and backpackers play a vital role on Australian farms by providing a workforce during these critical times,” said Mr White.
“The ongoing decline in backpackers visiting Australia must be arrested if the Australian vegetable industry is to remain viable. Any further decrease in the number of backpackers visiting Australia due to the tax could have a crippling impact on the Australian vegetable industry, threatening the future productivity and profitability of our growers.”
AUSVEG
Vegetable industry body AUSVEG has also expressed its disappointment at the lack of action taken by the Federal Government to change or eliminate the backpacker tax.
“The decision by the Federal Government to keep the proposed backpacker tax unchanged in the Federal Budget could impact the ability for Australian vegetable growers to harvest their crops and potentially devastate the industry,” said AUSVEG Deputy CEO Andrew White.
“Australian growers rely on backpackers to offset domestic labour shortages and perform the high amounts of manual labour needed in vegetable production. This decision endangers the availability of this important labour source and could leave growers unable to get crops off the field.”
“We initially welcomed the Federal Government’s review into this tax because it appeared as though they were prepared to acknowledge the strong opposition from Australian farming and tourism bodies. We hope that the Treasurer will be able to find a resolution in the next few weeks that will not threaten growers’ ability to attract the workers they need to harvest their crops.”
“While Australian growers’ first preference is always to employ local workers, there is simply not enough local labour to satisfy demand during peak harvesting periods, and backpackers play a vital role on Australian farms by providing a workforce during these critical times,” said Mr White.
“The ongoing decline in backpackers visiting Australia must be arrested if the Australian vegetable industry is to remain viable. Any further decrease in the number of backpackers visiting Australia due to the tax could have a crippling impact on the Australian vegetable industry, threatening the future productivity and profitability of our growers.”
For more information:
Pat Hannan, CEO
Growcom
Tel: 07 3620 3844
Natalie Brady, Communications Officer
Tel: 07 3620 3844 (ref: Backpacker Tax)