15 June 2016
The controversial Backpacker Tax was thrust into the limelight again last week for all the wrong reasons. Uncertainly around the commencement of the tax was brought to the forefront by conflicting advice provided to our farmer members by the Australian Taxation Office (ATO) about when the tax would come into effect.
Last week the Queensland Farmers’ Federation (QFF) was contacted by farmers after the ATO advised them that the tax would commence on 1 July 2016. This advice contradicted the Coalition Government’s May announcement that the commencement of the tax would be deferred for six months, pending the outcome of a review into issues affecting the supply and taxation of working holiday maker 417 and 462 visas.
The QFF contacted the ATO directly for clarification on whether or not the 32.5 per cent tax rate for backpackers was due to take effect next month, only to be directed to a statement on the ATO’s website stating that it would. Only after the reporting in the media did the ATO and the Government clarify that the advice being supplied to our members was incorrect and the website was amended. Understandably, our members expressed their frustration again with the proposed tax as they look for certainty to make business decisions for the new financial year.
The QFF has gone further to clarify the positions of both major parties on this issue. The Coalition remains committed to its review with any agreed changes to the tax coming out of the review to take effect from 1 January 2017. The ALP’s position is less clear. The ALP has also committed to a review, but could not confirm if a six month delay to introducing the tax had been costed. Adding further uncertainty to the issue, during the February Senate Estimates hearings it was revealed that the Government does not keep data on backpacker earnings which brings into question whether the proposed tax will generate the full $540 million forecast by Treasury over the next three years.
Agricultural and tourism operators still don’t have the certainly they deserve. Both the Coalition and ALP remain out of touch with the needs of our industries and regional communities on this issue. The inaction and continued uncertainty ensures the Backpacker Tax remains an election issue for regional Queensland. QFF and its member industries will continue the campaign in opposition to this damaging new tax as long our members are faced with the reality of uncertain labour availability.
Backpackers remain an essential component of our labour force and any policy determination that reduces access to backpacker labour has serious consequences for our industry. Backpackers contribute more than $3.5 billion to the economy each year as some 40,000 workers come to regional areas to work on farms.
The QFF and our members will continue to work constructively with government to find an acceptable resolution to this issue, but the simplest and most effective way to provide certainty back to farmers is for a returning or incoming government to scrap the tax.
QFF is the united voice of intensive agriculture in Queensland. It is a federation that represents the interests of 17 of Queensland’s peak rural industry organisations, which in turn collectively represent more than 13,000 primary producers across Queensland.
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