Leading vegetable industry body AUSVEG has today welcomed the Federal Government’s announcement that it will review the proposed “backpacker tax” in response to concerns that it could damage Australian agriculture.

The proposed tax would prevent temporary workers who come to Australia under the Working Holiday Maker program from being able to access the $18,200 tax-free threshold, with these backpackers instead facing a tax rate of 32.5 per cent from the first dollar they earn.
Tourism Minister Senator Richard Colbeck announced the review, which will look at other taxation options which could avoid negative impacts on Australia’s backpacker intake, after growers, industry groups and Government members expressed serious concerns about the impact the tax would have on Australian industry. 
“Australian growers rely on backpackers due to the high need for manual labour in the vegetable industry, and it is vital that this critical source of labour is not diminished by short-sighted policy decisions,” said AUSVEG CEO Mr Richard Mulcahy.
AUSVEG is the leading horticultural body representing more than 9,000 Australian vegetable and potato growers.
“We welcome the Minister’s announcement that there will be a cross-departmental review of the proposed backpacker tax, and we hope to see any future proposals acknowledge the importance of backpackers as a labour source,” said Mr Mulcahy.
“While Australian growers’ first preference is always to employ local workers, there is simply not enough local labour to satisfy demand during peak harvesting periods, and backpackers play a vital role on Australian farms by providing a workforce during these critical times.”
The Working Holiday Maker program, which includes the Working Holiday (subclass 417) visa and Work and Holiday (subclass 462) visa, allows visa holders to stay in Australia for 12 months and work for up to six months with any one employer. 
Holders of the 417 visa can also receive a second one-year visa if they work for 88 days in regional areas, with the overwhelming majority of these extensions coming from work in agriculture, forestry and fishing.
Statistics from the Department of Immigration and Border Protection show that the number of backpackers coming to Australia has dropped repeatedly over the past two years, with over 34,000 fewer visas granted in 2014-15 than in 2012-13. 
“The ongoing decline in backpackers visiting Australia must be arrested if the Australian vegetable industry is to remain viable,” said Mr Mulcahy. 
“Any further decrease in the number of backpackers visiting Australia due to the proposed tax or other policy decisions would be a huge hit and could have a crippling impact on the Australian vegetable industry, threatening the future productivity and profitability of our growers.”
 Shaun Lindhe, AUSVEG Manager – Communications 
Phone: (03) 9882 0277, Mobile: 0405 977 789, Email: shaun.lindhe@ausveg.com.au