The federal government has backed down on a controversial backpacker tax which would have stung worker holidaymakers one-third of their income.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
However, the decision to apply a 19 per cent tax and do away with the $18,500 tax-free threshold has sustained fears that the country has lost its competitive advantage against other countries in attracting a travelling seasonal workforce.
Tasmanian Liberal Senator Jonathon Duniam said he was pleased that the government had listened to the Tasmanian community and understood its concerns.
Primary Employers president Glynn Williams said that it was the work of a Tasmanian delegation to Canberra almost two weeks ago that prompted a quicker decision on the tax.
“This compelled an early outcome that was desperately needed across the country,” he said.
“People power has won out.”
Fruit Growers Tasmania business development manager Phil Pyke, who was also part of the Tasmanian delegation, said the challenge was now making sure Tasmania could attract enough itinerant workers over the horticulture industry’s peak production periods.
“We gave the government two weeks to sort this mess out before it became a major issue for Tasmania, and indeed, regional Australia,” he said.
“It is pleasing to see this announcement although we continue to question why this has taken since May 2015 to arrive at this point.”
Tasmanian Greens Senator Peter Whish-Wilson said he was disappointed that it was being spun as a back-down by the government, saying the abolishment of the tax-free threshold meant a loss of a competitive advantage against other international locations.
“Rather than penny-pinching from low-paid workers, and putting our agricultural producers at risk, the Treasurer should be embarking on real economic reform to raise the billions needed to run our economy,” he said.
Tasmanian Senator Jacqui Lambie said she would move an amendment to the tax legislation when it reaches the senate to reduce the tax to 10.5 per cent; on par with the rate charged in New Zealand.
“I hope that all crossbench, Labor and Green Senators will agree with my proposal,” she said.
Tasmanian Farmers and Graziers Association chief executive Peter Skillern said the country would remain competitive with other international destinations.
“The reality is that Tasmanian agriculture needs backpackers and, following today’s announcement, our farmers can be assured that they will have the workforce that they need,” he said.
The federal government plans to spend $10 million to draw backpackers to the country following a reduction of visitation due to news of the tax.
Bass Labor MHR Ross Hart said the state’s agricultural and tourism sectors could not afford “another stuff up”.
“Decisions have already been made by backpackers about the upcoming harvest season and it is hoped today’s back down is not too late.”
Recruitment agency VMAC Employment Solutions would normally have hundreds of backpackers approaching them for work, managing director Damian Waller said.
“This year we are at least down by 40 per cent,” he said.
“The damage was done months ago.”
Tasmanian Primary Industries Minister Jeremy Rockliff said most industries had accepted a 19 per cent tax rate as reasonable and welcomed the federal government’s plan to spend millions to entice backpackers to Australia.
The number of granted Working Holiday Maker Visa has dropped by 5.4 per cent in the 12 months to June 30, according to Immigration Department data.