Farmers have until September 2 to get in submissions to fight off the controversial backpacker tax.
The Coalition government’s review of the tax has officially commenced, with federal Agriculture and Water Resources Minister Barnaby Joyce and his Assistant Minister Luke Hartsuyker leading the process.
Mr Hartsuyker has ministerial responsibility for agricultural workforce matters and will seek a balanced outcome for the complex taxation issue that can protect the federal budget balance and maintain seasonal workers in farming and tourism.
The tax on working holidaymakers was due to increase to 32.5 per cent and the tax-free threshold of $18,200 removed on July 1.
But a six-month deferral was announced during the election campaign after farming and tourism industry groups ran a ferocious public campaign venting concerns about negative consequences on seasonal workers due to the higher tax charge.
A statement from the two ministers said the review’s outcomes would take the form of a government announcement, ahead of any changes coming into effect from January 1 next year.
Public submissions are due by Friday, September 2. It’s that’s likely to attract a strong response from the farm sector, where workplace pressures are already reportedly increasing due to the tax hike. Mr Hartsuyker said most people would agree backpackers should pay their fair share of tax while living and working in Australia.
But any change will impact revenue forecasts, with the deferral costing the budget $40 million after the tax increase was initially pegged to raise $540 million over three years.
“It is important that the revenue implications are considered as part of the review and that’s what the review will be doing: landing at a sensible solution,” he said.
“Backpackers bring substantial tourism dollars into the country, which we want to retain, and from a workforce perspective they provide an important labour source in both the agricultural sector and the tourism sector.
“I think it’s vitally important that we come up with a solution that addresses the need for revenue and the equity that backpackers, like others, should pay their fair share of tax.
“The 32.5 cents in a dollar rate is clearly a disincentive for backpackers to come to Australia and work while they’re here, so I think we need to come up with a reasonable solution and that’s the purpose of this review: to arrive at a middle ground.”