Backpacker tax ruling gives farming groups hope it’ll entice working holiday labour back to Australia – ABC Rural

Farmers are not surprised by a Federal Court’s decision on Wednesday, to overturn the controversial backpacker tax.

farmer reax key points

Key points:

  • Farmers hope the Federal Court ruling on the backpacker tax entices more working holiday makers to Australia
  • The ATO may still appeal the court ruling
  • NFF president says the court ruling could add to the confusion around the tax

The Federal Court in Brisbane ruled in favour of an international tax accounting company, US-based, which had mounted a legal challenge on behalf of British citizen Catherine Addy against the 15 per cent tax on working holiday makers. initiated the court action against the tax in January 2017, arguing the tax on backpackers was invalid because it contravened non-discrimination clauses built into tax treaties Australia had signed with the United Kingdom, the United States, Germany, Finland, Chile, Japan, Norway and Turkey.

The Commissioner of the Australian Tax Office has the opportunity to appeal the ruling, and the Federal Government said it will wait for all legal proceeding to conclude before changing any of its policies.

Victorian Farmers’ Federation spokeswoman Emma Germano, an outspoken opponent of the backpacker tax, said the ruling would send a message to potential workers overseas.

“Hopefully it will say to them that ‘even if the politicians get it wrong, the courts will get it right eventually for you.’ So it’s advantaged the workers from that perspective.”

“‘Come to Australia and pick fruit and at least the farmers will be lobbying on your behalf,’ is what I would say.”

Backpacker worker numbers had fallen

Ms Germano said the number of backpackers coming to work in Australia had “dropped off” following the introduction of the backpacker tax, but that had turned around, following a number of changes to the working holiday maker visas in recent times.

But chief executive of the National Farmers’ Federation, Tony Mahar, feared another change to the taxation regime for backpackers will only create further uncertainty.

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“What we saw was that backpacker numbers did drop, and they’re starting to recover now,” Mr Mahar said.

“They’re a critical part of the Australian farm sector’s employment regime so we want to make sure there is that certainty in there, and people do understand what the tax rates are and what the conditions are they’ll be working on Australian farms.”

‘Fantastic news’

Sunshine Coast pineapple grower Chris Fullerton said during harvest times, up between 90 to 100 per cent of his casual workforce is filled by backpackers.

He welcomed the Court’s decision.

“It’s great for tourism, it’s great for the farming community, so it’s a win all around I think,” Mr Fullerton said.

Mr Fullerton said the Court’s finding that the tax was discriminatory was not surprising.

“Even though I know nothing about international tax law, it was clear that these people were being discriminated against by not having, at the very minimum, the tax free threshold,” he said.

“The comments that I received [from backpackers] centred around it being unfair.

The president of the Australian Ginger Growers Association, Shane Templeton, is hopeful the ruling can entice more working holiday makers to Australia.

“I think if someone is looking at ‘do I go to Australia or do I go to somewhere like New Zealand?’, it’s a big enough difference that they would go somewhere like New Zealand if their tax rates are a lot more favourable.

“Why would they come to Australia if they’re going to lose a certain amount?

“So if it’s a trade off between a couple of countries, Australia will always come in second.

“So now this is probably wound back, you would think we’re probably in the race again.”

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