Have you noticed how cheap produce is at the supermarket lately? Don’t get used to it. According to South Australian senator Nick Xenophon, Australia could face a shortage due to the “disastrous” backpacker tax.
Introduced as part of the 2014-15 Federal Budget the tax is set to take effect on January 1, 2017 and will likely slug those on working holiday visas with around 32.5 per cent tax on every dollar that they earn.
Despite receiving more than 1,700 submissions it’s unlikely the measure will be dumped.
Agriculture minister Barnaby Joyce says a decision is coming, however Xenophon has warned the damage has been done thanks to the “social media grapevine”.
Farmers relying on seasonal workers say they’ve already noticed a sharp drop in the number of applicants. They say that instead of coming to Australia, the workers are choosing to head to New Zealand where the tax rate on their income is around half of the 32.5 per cent to be imposed in Australia.
Reid Fruits owner Tim Reid told The Mercury, “Normally by now we would have about 1,500 applicants, but as of today, we only have 600 applicants, then only a third who apply with accept a job.”
He says the issue is critical because without the picker numbers to get the crop in, fruit will be wasted.
Xenophon has recommended that Newstart recipients should be given greater flexibility, such as earning up to $5,000 without any penalty, to fill the backpacker jobs. He’s also proposing and extra $300 to any Newstart recipient who has to travel more than 100km to the job location. There would be a bonus for those employers who successfully place such jobseekers.
Yet treasurer Scott Morrison says the real problem with the welfare system is that some people reject jobs.
“The reason we need to get backpackers into these jobs in these places is because there are unemployed Australians living in these areas who won’t take these jobs,” Morrison told Ray Hadley on 2GB radio.