Anger over backpacker tax

Rueben HaleThe West Australian

A WA farm labour supplier has warned the introduction of the Federal Government's proposed "backpacker tax" could have detrimental effects on the nation's agricultural sector.

Under the Federal Government's proposal, backpackers would be taxed as non-residents at a rate of 32.5 per cent on all income from July 1.

Many in the farming sector are concerned the proposed tax will harm the agricultural industry and communities that rely on backpacker labour during peak times, because the high tax would likely mean the backpackers stayed in Australia for shorter period, or they would choose to go somewhere else entirely for their working holiday.

At present, backpackers contribute about $3.5 billion to the Australian economy, with roughly 40,000 of them working on farms each year and earning $15,000 a year.

Get in front of tomorrow's news for FREE

Journalism for the curious Australian across politics, business, culture and opinion.


York-based labour hire firm 2 Work in Oz proprietor Ley Webster said her company placed about 100 workers from all over the world on farms in desperate need of reliable seasonal labour each year.

Ms Webster said if the proposed tax was introduced, it would more than likely halve the amount of backpackers available for placement. "Backpacker labour for farms is essential because it costs each farmer a lot of time, money and energy to train new staff every month," she said.

"Access to overseas season labour offers the agricultural industry people often ready-trained, with confirmed skills and knowledge."

Westdale sheep and cropping farmer Anne Woods, of Romilly Hills Prime SAMM, Suffolk and Hereford stud, said the farm relied on backpacker labour.

The 7000ha farm, about 100km from Perth, runs a sophisticated and labour-intensive artificial insemination program and requires reliable seasonal labour.

"We mainly get European backpackers wanting to work on the farm, who are keen and willing to learn," she said.

"They learn many skills on the job and are prepared to work hard each day.

"If we didn't have these people available to work, we couldn't continue to operate because we've tried to use local labour in the past, but we've found people we've hired have turned out to have little work ethic and were unreliable."

Ms Woods said backpacker labour also allowed the farm to have flexibility.

"We can get reliable labour for a short period," she said.

"We have three backpackers at the moment helping us with the current embryo program.

"They're absolutely committed and have offered to stay on in lieu of rent for the next six weeks while we complete the program."

Meanwhile, WAFarmers, alongside the National Farmers' Federation and other industry bodies, is launching a national campaign against proposed tax, also claiming it would have detrimental eff- ects on the nation's agricultural sector.

The #backpackertaxcampaign will comprise an online petition and social media campaign aimed at harnessing community support for a softening of changes to the way working holidaymakers are taxed.

WAFarmers chief executive Stephen Brown said the proposed tax would harm the agricultural industry.

"The use of backpackers to satisfy demand during peak times is critical to the survival of farming businesses and the Australian agricultural sector as a whole," he said.

"Their presence in Australia boosts not only productivity in the agricultural sector, but communities and businesses which rely on tourism spending.

"While we agree that backpackers should be taxed, along with the NFF … and other industry bodies, we maintain that a more effective tax rate of 19 per cent, achieved by deactivating the tax-free threshold, would be fairer to backpackers and would secure the future of the Australian agricultural industry.

"We, alongside our national and State counterparts, urge farmers, producers, other industry stakeholders and the general public to show their support for our proposal by signing our online petition."

Implementation of the Federal Government's proposal has been estimated to raise $540 million in forward estimates, while the proposed 19 per cent tax would generate $315.7 million.

NFF Workforce Productivity Committee chairman Charlie Armstrong said any perceived losses between the 32.5 per cent and 19 per cent proposals would be dwarfed by the serious economic impacts of reduced backpacker tourism and associated agricultural losses.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails