Backpacker tax causing concern for agricultural industry

THE number of overseas workers in the Lockyer Valley could rapidly decline if the Federal Government decides to scrap the tax-free threshold for backpackers.

Barden Produce general manager Clem Hodgman talks to farm manager Johanna Quiroga about the Federal Governments decision to scrap the tax-free threshold for backpackers. Photo Ali Kuchel / Gatton Star. Picture: Ali Kuchel

THE number of overseas workers in the Lockyer Valley could rapidly decline if the Federal Government decides to scrap the tax-free threshold for backpackers working in Australia.

The proposal means holiday workers will pay 32.5 per cent tax on every dollar earned.

Growcom chief executive officer Pat Hannah said the decision would seriously affect horticulture growers' access to labour.

"We are already seeing signs of this in some areas where backpackers are signalling their intention not to return next year," he said.

"Access to labour continues to be a major issue for Queensland growers and backpackers on temporary work visas are vitally important labour force during seasonal harvest periods."

According to AUSVEG working backpackers coming to Australia is declining and poses a threat to the future of the vegetable industry.

Figures from the Department of Immigration and Border Protection show the number of workers coming to Australia under the 417 visa has dropped over the past two years.

The proposal to scrap the tax-free threshold for working backpackers will come into effect in July.

However locally, Barden Produce general manager Clem Hodgman said it would be a few months until the industry noticed any significant impacts.

"At the end of the day the horticulture industry needs casual labour for seasonal work." Mr Hodgman said.

"Our visa holding staff are only allowed to stay with us for six months … the next changeover is in March 2016, which will be the first test of current labour availability."

Mr Hodgman said Barden Produce directly hired its workers to ensure they were legal and visa holders were predominantly of Asian background.

"Even without the tax-free threshold, the job is still lucrative," he believes.

"Paying staff under the horticultural award, it's up to five times what they can earn in their own country."

However he said the decline in working backpackers wasn't necessarily just from the tax-free threshold but from recent bad press about poor labour contractors' practices.

"The industry has been turned off by dishonest contractors, who have been hiring illegal workers, underpaying them and putting them in poor housing," he said.

"This has likely had a negative impact, not just the tax-free threshold."