The National Farmers’ Federation (NFF), along with its member organisations, on Tuesday 2.2.2016, launched a campaign encouraging the Federal Government not to proceed with the proposed so-called “backpacker tax” which the NFF says will erode the agriculture workforce and the prosperity of regional communities. The campaign has been supported by the Tourism & Transport Forum Australia.

[The change was announced in the 2015-16 Federal Budget and would see the tax residency rules changed to treat most people who are temporarily in Australia for a working holiday as non-residents for tax purposes, regardless of how long they are here. This means they would be taxed at 32.5% from their first dollar of income. The change has not yet been legislated.]

The NFF considers an effective tax rate of 19%, achieved through deactivation of the tax-free threshold, would be fairer for both backpackers themselves and the industries which rely upon them. “Taxing backpackers at a rate of 32.5% will make work in Australian agriculture a highly unprofitable proposition [for them]”, the NFF said.

[LTN 20, 2/2/16]