May 17, 2016
Introduction of the so-called “Backpacker Tax” – which would have removed the tax-free income threshold for backpackers from July 1 – has been deferred for six months to allow a government review.
The Federal Government announced on Tuesday an inter-departmental review would cover a “broad range of issues affecting the supply and taxation of working holiday maker 417 and 462 visas”.
Small Business Minister Kelly O’Dwyer MP said the government had listened to concerns from regional and rural areas that the taxation change could potentially affect the agriculture and tourism industries.
“The government recognises that working holiday makers are an important source of labour in Australia and the ‘Review of 417 and 462 Visa Labour’ will ensure our labour supply is adequate and Australia remains competitive globally,” Ms O’Dwyer said.
Deputy Prime Minister Barnaby Joyce said the review would form part of a broad review of the workforce shortages faced by the agriculture and tourism industries.
It will also investigate short and long-term agricultural and tourism seasonal labour needs, regulatory imposts on employers, and opportunities to expand the supply of seasonal workers.
It will include consultation with stakeholders.
The review will report by mid-October with agreed changes to take effect from January 1, 2017.
However, the Queensland Farmers’ Federation has labelled the deferral as “simply not good enough”.
“This announcement will not provide the certainly agricultural and tourism operators have been calling for and is out of touch with the needs of our industries and regional communities,” QFF CEO Ruth Wade said.
“The government has ignored the farming and tourism sectors, the will of 50,000 petitioners and the recommendations from their own internal review in which our sector participated with in good faith.
“The Federal Government’s inaction on the Backpacker Tax has made this an election issue and QFF and its member industries will continue its campaign in opposition to this damaging new tax.
“Backpackers contribute more than $3.5 billion to the economy each year as some 40,000 workers come to regional areas to work on farms.”
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Queensland Tourism Minister Kate Jones labelled the review “a political fix”.
Ms Jones said the review did nothing to calm fears the tax would hurt Queensland tourism and agriculture.
“We will not be fooled. Mr Turnbull wants to kick this can down the road to get it off the agenda during the federal campaign.”
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