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What the government can learn from the backpacker tax debacle

Joanna Howe writes in The Conversation (29.11.16) about the controversy over the federal government’s changes to the backpacker tax, which shows the inadequacy of relying on backpackers as the primary labour source for a vital industry.

‘At the eleventh hour, and after a protracted saga beginning with the May 2015 federal budget, the furore over the backpacker tax has finally ended. Despite the federal government initially proposing a 32.5% tax rate for backpackers, followed by a post-election compromise of 19% and a refusal to negotiate below this, the federal government reached a deal with One Nation and Nick Xenophon to introduce a 15% tax rate from the first dollar earned. But what the backpacker tax controversy points to is the inadequacy of relying on backpackers as the primary labour source for critical jobs.

‘There’s little doubt this deal comes as welcome relief to fruit and vegetable growers who rely on backpackers at harvest time. With the harvest now well underway in many parts of the country, it is crucial that backpackers are willing and available to work in the sector. For example, in Tasmania, the indecision around the backpacker tax has led farmers to report a 40% drop in the number of backpackers working in the sector.

‘It has been extremely short-sighted for Treasurer Scott Morrison and his government to quibble about the minuscule contribution that backpackers can make to the budget bottom line, when the horticulture sector is so reliant on backpacker labour for its very existence. Horticulture is critical to Australia’s economic development and food security into the future.’

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