Some 600,000 backpackers travel to Australia every year, many of them finding work picking fruit. AFP File Photo
CANBERRA: In a last-ditch effort to ensure Australian farmers have sufficient help ahead of the fruit picking season, Australia’s coalition government has agreed on a compromise which will set the nation’s “backpacker tax” at 15 per cent, China’s Xinhua news agency reported.
After a weekend of negotiations with the Senate crossbench, Treasurer Scott Morrison announced the government had accepted a 15 per cent compromise, down from the current 32.5 per cent tax rate.
It is expected that the compromise will satisfy the crossbench, meaning the bill will pass the Senate before Parliament takes its Christmas break from Thursday.
Earlier this month, the nation’s Senate committee urged parliament to pass the bill as soon as possible in order to maintain Australia’s attractiveness to working holidaymakers and to secure extra harvest labour for farmers ahead of the summer season.
Australia’s agriculture sector relies on the labour of backpackers, and many have argued the current rate has discouraged working holidaymakers from choosing Australia as their working holiday destination.
On Monday, the government’s compromise was backed by the National Farmers’ Federation (NFF) with Chief Executive Officer (CEO) Tony Mahar urging the Senate to “expedite” the passage of the bill ahead of the fruit picking season.
“It has been a painful process but we wholeheartedly welcome the announcement that a compromise rate of 15 per cent has been reached,” Mahar said in a statement released on Monday.
“In time we hope that lessons are learned so that the farm sector is never compromised in this way ever again.”
Despite the government’s decision to come to the table on negotiations, both the Labour opposition and the Greens have said they will maintain their hard-line position of striving for a 10.5 per cent tax rate.
“The Labour party will maintain its position on the 10.5 per cent,” deputy Labour leader Anthony Albanese said.
Meanwhile, Greens Senator Peter Whish-Wilson said his party would be more likely to support a 15 per cent tax rate if the government scraps the associated 95 per cent clawback on superannuation earned by the backpackers.
“The Senate really should not be supporting this proposal on a 15 per cent backpacker rate,” Whish-Wilson said on Monday.
“With the 95 per cent clawback on superannuation of backpackers, then the effective tax rate is closer to 24 per cent which is… roughly double the tax rate for backpackers in New Zealand.”
“We are seeking advice on whether we can move an amendment to this new bill to cancel the superannuation clawbacks.”
However, with both the government vote and the expected crossbench support, the bill is likely to pass in its 15 per cent form.
Usually employed on a casual basis, backpackers help farmers pick seasonal harvests of grapes, cherries, blueberries, oranges, melons, apples and bananas, mainly in Australia’s eastern states.
Without backpackers, many Australian farmers would not be able to secure sufficient help to pick enough fruit before it begins to rot. – Bernama