Australian govt reaches compromise on controversial backpacker tax

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Australian govt reaches compromise on controversial backpacker tax

The Australian Government has struck a deal to pass its controversial backpacker tax this week after gaining support for a new rate of 15%, ABC News reported. oranges_13945135

It will prevent the rate spiking to 32.5% for seasonal workers from the start of next year, as had been the case under the initial proposal in the 2015 budget. It was later lowered to 19%.

The government had faced a backlash from the farming industry over concerns the new tax would make it unattractive for temporary workers to come to Australia.

At present, backpackers do not pay any tax until their yearly income exceeds AUD18,200 (US$13,500).

Federal Treasurer Scott Morrison announced on Monday the government would compromise again on the rate and push for 15%.

Morrison reportedly said the reduced rate would cost the federal budget AUD120 million over four years.

Many farmers are furious at the coalition government for its handling of the backpacker tax, but speaking to reporters in the capital Canberra, Morrison was quoted as saying by ABC News "the matter is sorted this week".

The bill will now go to the Senate, where it is likely to be passed, according to the publication.

In a release, industry body Citrus Australia welcomed the news, saying it had been 'strongly opposed' to the 32.5% rate.

The group's CEO Judith Damiani said the proposed 15% rate was both 'reasonable and equitable' and would ensure Australia remained an attractive destination for backpacker labor.

"The work done by the Federal MPs for Barker, Tony Pasin and Mallee, Andrew Broad on this issue has been much appreciated," Damiani said.

"This issue has gone on for far too long and the industry needs it resolved during this last week of Parliament. Our growers are tired of these political games and just want to get on with their harvest."

The National Farmers’ Federation (NFF) was also pleased the government had agreed to a compromise.

"It has been a painful process but we wholeheartedly welcome the announcement that a compromise rate of 15% has been reached," CEO Tony Mahar said.

"The NFF back to the Colbeck Review said that a rate between 15% - 19% was a fair one that would attract backpackers to the sector and be comparable with rates paid to Australian workers.

"We now ask that the Senate expedite passage of the relevant legislation to provide the long needed certainty to the sector and allow businesses to start rebuilding backpacker interest in on-farm jobs. In time we hope that lessons are learned so that the farm sector is never compromised in this way ever again."

The group's workplace relations general manager Sarah McKinnon reportedly described the new rate as fair, but pointed out a consensus could have been reached months ago.

"There is no question that no party has covered itself in glory on this issue," she was quoted as saying.

"It has been a disappointment. Farmers are let down by the political process that has seen games come ahead of the public interest."

Meanwhile, industry body Voice of Horticulture (VoH) highlighted backpackers contribute more than AUD3.5 billion to the economy each year with around 40,000 find employment on farms.


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