Fruit Growers Tasmania calls for halt to backpacker tax changes

THE peak body representing fruitgrowers in Tasmania will hand in a submission to the Federal Government requesting a moratorium on the proposed backpacker tax.

Fruit Growers Tasmania's business development manager Phil Pyke says the organisation wants a “deep dive” and a “drawn out investigation” into the backpacker tax. Picture: SAM ROSEWARNE

THE peak body representing fruitgrowers in Tasmania is preparing to hand in a submission to the Federal Government requesting a moratorium and a lengthy investigation on the proposed backpacker tax.

The Federal Government plans to tax backpackers at a rate of 19 per cent from the first dollar they earn from next year, rather than the 32.5 per cent rate originally flagged in the 2015 Budget.

However, Fruit Growers Tasmania business development manager Phil Pyke said the organisation wanted a six-to-12 month moratorium on the tax, which would result in a suspension of the proposed 19 per cent tax.

Mr Pyke said this would mean the tax would stay at the original 13 per cent during the investigation, with no changes to be implemented before July 2017.

Mr Pyke said FGT would make its submission over the next two days outlining the direction any investigation needed to take.

“We want a deep dive into this and we want a drawn out investigation to work out a correct tax rate for the industry,” he said. “Let’s have a proper review where we can assess the issues.”

It comes as a Senate economics committee is holding a speedy inquiry into the backpacker tax before the Senate sits again on November 7.

The agricultural industry, including Primary Employers Tasmania, said Labor’s desire to examine the issues in detail would cause a delay in the reduction in the backpacker tax to 19 per cent. The committee will report back by November 7.

Labor says the bill must be scrutinised by a Senate inquiry because it contains two new taxes.

The package includes a 95 per cent tax on superannuation payments once working holiday-makers leave Australia and a $5 increase in the international departure tax from July 1, 2017 to $60.

Meanwhile, South Australian Liberal MP Rowan Ramsey today admitted the original 32.5 per cent tax flagged in the 2015 Budget would have done a lot of damage to the industry and the new rate of 19 per cent brings Australia into line with other countries.

But Labor’s agriculture spokesman Joel Fitzgibbon feared just as many backpackers will be driven away by the 19 per cent rate.

“I call on a divided government to work with the opposition and all stakeholders to produce an outcome which allows Australia to be internationally competitive,” he said.

Mr Fitzgibbon warned backpacker numbers started falling away the day the tax was announced.

“[Agriculture Minister Barnaby Joyce] is introducing a tax he knows is going to leave fruit rotting on trees [in places] like Tasmania and elsewhere.”

Mr Fitzgibbon conceded the agriculture industry was split on the issue.

“I want those on the backbench in the government who are privately saying 19 per cent is a bad idea to speak out.”

Nationals deputy leader Fiona Nash insisted the Government had worked through the issues.

“What’s been welcomed is the fact that we have come to a common sense conclusion in relation to the backpacker tax,” she said.

She insisted the reworked tax was a great outcome for farmers, businesses and backpackers.