Labor has scuttled the government’s plans to introduce a 19 per cent tax rate on backpackers from January 1 by moving a lower 10.5 per cent rate with crossbench support.
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The move means that the tax legislation is destined to be returned to the lower house, increasing industry fears that the continued uncertainty will mean that agriculture may suffer from not getting the required backpacker labour for the rest of the fruit-picking season.
Tasmanian Labor Senator Helen Polley, who sat on a recent senate inquiry into the proposed tax, said it was clear that industry had been wedged between the 19 per cent and 32.5 per cent tax options.
She said the party could not support a zero-per-cent tax for economic reasons but that a 10.5 per cent tax would put the state on the same footing as New Zealand.
Bass Labor MHR Ross Hart said the lower rate would ensure Tasmania’s competitive edge as a working holidaymaker destination.
“The ALP listened to industry concerns that confirmed the higher tax rate as ticked off by the National Farmers Federation was hugely problematic and not supported by local industry,” Mr Hart said.
Tasmanian Greens Senator Peter Whish-Wilson said the party would move its own amendment to charge backpackers the same tax rate as Australian residents but would back the 10.5 per cent rate if unsuccessful . Tasmanian Liberal Senator Jonathon Duniam said the lower tax rate would disadvantage unemployed Tasmanians as it would be cheaper to hire overseas workers.
“I find it astounding that some want to see overseas workers paying no income tax, or substantially less income tax than Australian residents,” he said. “The real losers from the continued naval-gazing and the stalling or possible defeat of this legislation are our farmers, restaurants and hotels that are calling out for backpacker workers and the business that rely on the seasonal backpacker trade.”
Primary Industries Minister Jeremy Rockliff called to push “cheap politics” aside in the interests of providing industry certainty.
Fruit Growers Tasmania business development manager Phil Pyke said the government should put a moratorium on any proposed backpacker tax until a consensus could be reached.
He said if the original 32.5 per cent tax was brought in on January 1, industry would be punished by government’s mismanagement over the proposed tax.
