5 Oct 2016
Last week’s announcement to change the proposed backpacker tax rate from 32.5 per cent to 19 per cent saw the culmination of a successful 6-month campaign by the agricultural and tourism sectors.
With more than half of all backpackers coming to Australia working and holidaying in Queensland, expected labour shortages would have been acutely felt by the Queensland Farmers’ Federation’s (QFF) industry members.
Working closely with our members Growcom and Cotton Australia, as well the National Farmers’ Federation (NFF) and the Queensland Tourism Industry Council (QTIC); QFF allocated considerable time and resources to prosecute a clear and effective message that the proposed tax rate had already impacted farmers and regional communities reliant on backpacker labour, and the negative consequences would only escalate unless government acted swiftly.
From the outset QFF and members agreed in principle with the Federal Government’s rationale that backpackers should pay their fair share of tax. But, the tax rate had to be internationally competitive.
Following the announcement, there has been some criticism that 19 per cent is not internationally competitive. QFF disagree. While the tax rate may still be higher than in competing destinations such as Canada and New Zealand the minimum wage in Australia is substantially higher, so backpackers still have greater opportunities to earn more money on working holidays here.
Queensland should be proud of its lead role in amending the tax. There was state bi-partisan support and a number of high profile federal MPs were outspoken against the tax. The combined efforts of our politicians were truly representative of their constituency and the Queensland specific impacts the tax would have had.
The efforts of the Deputy Prime Minster and Agriculture Minister Barnaby Joyce must also be recognised. If not for his influence and ability to place agricultural issues on the government’s agenda, an unchallenged backpacker tax may have been and done deal long ago.
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