Tax cut won’t bear fruit

November 29, 2016

With the bill still due to pass through the Senate, it seems whatever happens, it will be too late to attract overseas pickers.

At last we are nearing a resolution on the backpacker tax issue, but an even larger issue looms over our fruit industry.

With the bill still due to pass through the Senate, it seems whatever happens, it will be too late to attract overseas pickers.

Yesterday’s Coalition compromise is the third tax rate it has come up with — from 32.5 per cent to 19 per cent to 15 per cent.

Whether or not overseas travellers have been following the fluctuations of Australia’s politicians is irrelevant — their decisions have been made.

And the signs are not good.

Comments from Cobram grower Tony Siciliano suggest picker numbers are well down on last year.

Fruitgrowers Victoria chairman Gary Godwill has supported this view, saying many overseas pickers have chosen Canada and New Zealand over Australia.

Labor’s agriculture spokesman Joel Fitzgibbon put it bluntly: ‘‘All backpackers do is look at the headline rate. They look at New Zealand at 10.5 and Australia at 19 or 15 and they decide to go to New Zealand.’’

The backpacker tax debate has dragged on for 18 months, with an initial proposal of 32.5 per cent tax for season workers from January 1 proposed in last year’s federal budget.

Growers have been living with picker uncertainty since then, adding more stress for farmers to live with alongside the continuing furore over the Murray-Darling Basin Plan water allocations.

The question has to be asked: why were changes to the tax even in the government’s budget plans?

In the May 20l5 budget then treasurer Joe Hockey said all holiday workers would pay 32.5 per cent tax from the first dollar of income earned.

He claimed it would bring in $540million in extra revenue across three years.

However, it is known the government had no discussions with growers before announcing these changes, and as was discovered during Senate committee hearings last month, did not even do any modelling on the impact of the changes.

This tax change, which so obviously hurts the interests of growers, has taken 18 months to resolve and will undoubtedly deliver a hammer blow to this season’s crop in many sectors.

So a further question must be asked: does having the National party involved in a permanent Coalition with the Liberal party — even to the point of having a National member in Cabinet — actually serve the interests of rural people?

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