By Growcom CEO David Thomson
As the peak body for horticulture in Queensland, Growcom has welcomed the Federal Court’s recent ruling that the Backpacker Tax cannot lawfully be applied to citizens from eight foreign countries.
While the horticulture industry has no view on the question of law in this case, we are simply pleased that one more disincentive to travel and work in Australia has been removed.
For many backpackers, working in the Australian horticulture industry is an enjoyable and rewarding rite of passage. This tax takes the shine off that experience and put our industry under pressure.
We hope the recent decision will now encourage backpackers from United Kingdom, the United States, Germany, Finland, Chile, Japan, Norway, and Turkey to reassess their plans and make a stop Down Under.
Consumers of fresh fruits and vegetables should know that often what they eat has been handled by a backpacker. They are an essential and valued part of our labour pool.
While the Federal Court ruling may yet be subject to an appeal by the Australian Taxation Office (ATO), it is our view that the Backpacker Tax should be fully repealed for three main reasons.
First and most obviously, the budget emergency which was used to justify this tax when it was first proposed in 2015 has since passed. We are now on track for a surplus and can afford to give both backpackers and the farmers who rely on them a break.
Also, should the ruling go unchallenged or be upheld, it has the potential to create two different classes of backpacker in terms of their tax obligations. This is an issue on two fronts as it puts an additional administrative burden on their grower-employers and could create a source of discontent and division within the workforce leading to losses in productivity.
Finally, as already mentioned, the tax should be repealed to the extent that it acts as a disincentive for those backpackers considering travelling to and working in Australia, thus constraining an important source of labour for horticulture.
That’s why we’re calling on the Australian Government to reconsider the Backpacker Tax for travellers from all other countries as part of a wider systematic review of labour supply for horticulture.