Farmers applaud 15% backpacker tax

The state’s agricultural body has welcomed the Commonwealth’s decision to reduce its planned backpacker tax to 15 per cent, less than half than what was originally proposed.

Treasurer Scott Morrison said the federal government had agreed to a compromise of 15 per cent on the backpacker tax, after the original 32.5 per cent rate plan was met with extensive campaigning from the agribusiness and tourism industries, which rely on backpacker workers.

The proposal was already amended in late September down to 19 cents on every dollar earned by backpackers.

However it was still higher than crossbench Senator Jacqui Lambie’s hopes of 10.5 per cent, which gained backing from Labor and the Greens.

The change will come into effect from January next year.

WAFarmers chief executive Stephen Brown said the organisation was pleased for industry that a fair compromise had been reached.

“The 15 per cent compromise is a huge relief to farmers as we head into the peak working season for backpackers in the agriculture, tourism and hospitality sectors,” he said.

“The government has adopted a commonsense approach, which will see backpackers taxed at the same rate as those working in Australia through the Seasonal Workers Program. 

“Streamlining the tax rate to 15 per cent across the board for all foreign labour will minimise confusion for employers and employees, while ensuring Australia remains an attractive competitive nation to holiday and work.

“Further, there should not be any negative impact from the 15 per cent tax rate for Australian workers in the industry as they will still receive the $18,200 tax free threshold.”

However, what wasn’t amended in the changes was the proposed $5 increase in the Passenger Movement Charge from $55 to $60 on airline tickets, a move that drew criticism from the Tourism Council of WA when it was announced in September.