Major parties fail on backpacker tax

The increase in taxation of backpackers (working holiday makers (WHM)) to 32.5 per cent from the first dollar they earn was announced in the 2015 federal budget and is due to start on January 1, 2017, following a last minute six months postponement announced by the government as a result of overwhelming opposition from the farming and tourism sectors.

The government is also undertaking another review of the matter, this time led by the Deputy Prime Minister and Minister for Agriculture Barnaby Joyce. Considering the election’s timing, this review is unlikely to constructively start until the election is completed.

The situation is far from ideal for growers who are facing uncertainty whether there will be enough backpackers to fill the seasonal labour needs during the upcoming harvest. Backpackers plan their travel months in advance, and prolonged uncertainty will only deter them. 

The Opposition offers no solution to the issue even though it publicly opposed the new tax measure.

Labor outlined its plans relating to backpackers as part of its ‘temporary work visa’ policy late last week, including a review of the working holiday visa program to ensure the WHM visas were consistent with its original objective of being primarily a cultural exchange program.

This indicates the policy places the visa’s role in supplying a consistent and adequate farm workforce as a second tier priority.

The policy is silent on the issue of backpacker tax, nor did it provide any commitment to further delay or abolish it.

Both sides of the politics have failed agriculture by not resolving the backpacker tax issue before the election.