Mountain Blue's Natalie Bell and her father Ridley with Eureka blueberries ready to pick. Photo Contributed
Mountain Blue's Natalie Bell and her father Ridley with Eureka blueberries ready to pick. Photo Contributed Contributed

Picking apart how backpacker tax affects North Coast farming

A CAMPAIGN is gaining momentum against plans to slug working backpackers with hefty taxes from the first dollar they earn.

But at least one leading northern NSW horticultural figure expects impacts on his bottom line to be minimal.

The National Farmers' Federation has pleaded with the Federal Government to rethink its plan to remove the $20,000 tax-free threshold for working holidaymakers and tax them at 32.5c for every dollar of income up to $80,000.

The motivation behind the change is simple: backpackers are notorious for jumping ship to the next country without ever paying the income tax they owe.

This way, they would be taxed at the full rate from the get-go.

NFF Workforce Productivity Commission chairman Charlie Armstrong agreed backpackers, who make an average of $15,000, should pay tax.

But he said an effective tax rate of 19%, achieved by deactivating the tax-free threshold, was fairer and more realistic.

"The agriculture industry relies on backpackers to fill severe labour shortages which are often seasonal and temporary, for example, when crops are being harvested or milk production is at its peak," Mr Armstrong said.

"Each year, backpackers contribute around $3.5 billion to the Australian economy and around 40,000 find employment on Australian farms.

"Taxing backpackers at a rate of 32.5% will make work in Australian agriculture a highly unprofitable proposition."

Mountain Blue Farms owner and managing director Ridley Bell has just come off a bumper season with almost double the blueberry harvest he anticipated.

His Tabulam and Lindendale farms were so productive he did not have the facilities to pack the entire harvest.

Lesson learned. Now he is building a new packing shed at Tabulam in preparation for the next abundant yield.

The new shed alone will create about 80 new jobs.

"We haven't had any shortage of workers," he said.

"My understanding is that we had more than 4000 applications on our website for employment last year.

"We ended up employing about 600 or 700 people."

Mr Bell recognised not everyone in the industry was as fortunate when it came to attracting itinerant workers.

"I put it down to the fact that, even at Tabulam, we're not that far from Byron Bay and the coast," he said.

"We're not out in Western NSW, somewhere in the sticks, Mildura or somewhere like that.

"That's not to put them down, but backpackers are probably much more inclined to want to go somewhere around Byron Bay."

The low Australian dollar was another negative for farmers struggling to find labour, Mr Bell said.

"All of a sudden, Australian wages aren't as attractive as they once were," he said.

Other growers were shooting themselves in the foot by underpaying their staff.

In the age of the internet, Mr Bell said word of employers' dodgy practices spread like wildfire.

"Some growers, even in good areas, just underpay.

"It's not just in blueberries and not just in horticulture - there are a number of industries where there's cash under the table and bad working conditions.

"With social media, people hear about whether you're a good employer within minutes.

"We employ quite a lot of South Koreans, and there's one South Korean blog that rates all different Australian farms.

"So far we've rated well and so we have no shortage of people knocking on our doors looking for work."

The NFF maintained the spectre of the 32.5% tax rate was already beginning to scare off potential workers, who could opt for Canada and New Zealand for better pay.

"What is the point of increasing revenue through the implementation of this tax only to strip back the contribution of agriculture, tourism and regional spending to the economy?" Mr Armstrong said.

"We urge farmers and other industry stakeholders as well as the broader public to join us in demonstrating the importance of backpackers to agriculture, tourism and the regions by signing our online petition."




  • Backpackers make up 13% of the total tourism spend in Australia, $3.2 billion
  • Numbers were up 4% in 2015
  • 606,000 backpackers came to Australia last year with an average spend of $5295 per person
  • Byron hosts 23.8% of all backpackers during their stay

SOURCE: Tourism Research Australia (March 2015)

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