Industry calls for tax to be dumped as workers disappear
TAXING backpackers higher than other staff is bad for business.
That's the message from the agriculture industry after the Federal Court found the Federal Government's Backpacker Tax couldn't be applied to certain nationalities as it broke international agreements.
AUSVEG, Australia's peak industry body for the vegetable industry, has called on the Government to repeal the controversial tax in full following the Federal Court's decision.
CEO James Whiteside said the tax was flawed from the beginning and should be repealed in full to avoid any confusion among backpackers and employers.
"It is disappointing that the decision to implement the Backpacker Tax, which industry campaigned hard against for a long period of time, highlighting the issues it would cause, actually made it this far and had to be challenged in the Federal Court," Mr Whiteside said.
The call is being backed up by local industry.
Mulgowie Farming Company CEO Fabian Carniel said backpackers were crucial to the ag company's business model.
"(We) employ hundreds of backpackers each year at each of our five farm sites across Queensland, New South Wales and Victoria," he said.
"Mulgowie Farming Company's seasonal workers play an important role in the production and supply of fresh produce to domestic and international customers, 365 days per year."
He told the Gatton Star AUSVEG was on the right track with it's call to scrap the tax.
"Our industry organisations of AUSVEG and GROWCOM understand the importance of backpackers who keep production rolling on regional farms around Australia, and we support their stance that the Backpacker Tax should be repealed," he said.
Flawed from the beginning
Before its introduction, industry argued that introducing a Backpacker Tax would deter Working Holiday Makers from coming to the country and have a severe impact on the horticulture industry.
The tax was originally set to be at 32.5 per cent but settled at 15 per cent when it was implemented in 2016.
AUSVEG claims these concerns were proven correct, making the industry's labour shortage worse.
The number of backpackers coming to Australia has dropped since 2012-13 when more than 258,000 travellers came down under on 417 and 462 visas.
Now that figure is down to just over 209,000.
"The horticulture industry has a significant labour shortage and has been working closely with the Government to amend visa rules to increase access to foreign workers. This shortage has been exacerbated by the confusion surrounding the Backpacker Tax," Mr Whiteside said.
"Repealing the tax in full might at least go some way in bringing some confidence back to backpackers who wish to travel to Australia and a basic incentive that if they come here they are free to experience what Australia has to offer without the burden of being taxed.
"Government must have a commonsense approach to this issue and amend what was an incredibly bad policy from the beginning."