Joel Fitzgibbon has criticised the National Farmers Federation for being the flag bearer for the government’s planned backpacker tax and has asked it to work with him to get a better deal for farmers.
The opposition spokesman for agriculture said Treasury officials had told him the Coalition’s plans to impose a 19% tax on working holiday makers rather than the initial 32.5% would not stem the losses of backpackers travelling to Australia.
“Treasury told us that at 19% the fall off in backpackers would have been as great as they would have been under 32.5 so we have a problem,” he said.
“I am going to fight for farmers and if the NFF came to the same conclusion and stopped being the flag bearer for 19% we might get more progress towards a better deal for farmers.”
The Coalition announced in the 2015 budget it planned to tax backpackers at 32.5% from July 2016 but this caused an outcry from agricultural industries, which rely on young holiday makers for 25% of their workforce.
The government implemented a review during the election, pushed the decision out to January 1, 2017 and then announced in September it would revise its planned tax down to 19%.
While the bills have passed the lower house, Labor and the crossbenchers have referred the legislation to a Senate committee, which will report on 7 November.
With only three more sitting weeks, the bills need to clear the Senate before the 1 January 2017 start date to provide growers with certainty.
The chief executive of the NFF, Tony Mahar, accused Labor of further exacerbating the uncertainty for farmers at a time when applications for fruit pickers had dropped by up to 50% in some areas.
He said growers were not only considering the prospect of leaving fruit and vegetables to rot, but also revising planting schemes for next year’s crops.
“I would ask the ALP to come out and clarify their position on which rate they support,” Mahar said.
“They have had 15 months to make position clear and raising the prospect of lower tax rates at this late stage further amplifies the uncertainty that has surrounded this whole process.
“We have agreed to 19% for the sake of certainty. Suggestions we are flag waving for government are way off the mark. We are flag waving for agriculture and the farmers.”
Tourism-related industries say the tax will hit regional economies by cutting the amount spent in those areas. Backpackers have been attracted to work on farms as a way of extending their visas.
While the NFF opposed the 32.5% rate, it has supported the revised measure of 19% with a 95% tax on backpackers’ superannuation earnings when they leave Australia. The bills also increase the passenger movement charge by $5.
Fitzgibbon would not commit to blocking the backpacker tax bills and associated tax increases in the Senate. The decision has yet to go to the Labor caucus.
Fitzgibbon says the fact that the government has tied the backpacker tax to an increase in the passenger movement charge and a 95% tax on working holiday makers’ superannuation on the way out of Australia makes the decision difficult.
