May 17, 2016

Backpacker Tax con: time for Barnaby to call it

Malcolm Turnbull is trying to con farmers and tourism operators with the announcement today that the Backpacker Tax will be delayed until 1 January next year.

This is nothing more than a political fix designed to keep Barnaby Joyce and regional government MPs quiet as the election nears.

It has been clear for over a year that there are problems with the design of the tax, which would see backpackers paying a 32.5 per cent tax rate from their very first dollar.

Farmers and tourism operators have rightfully raised concern about their ability to attract the seasonal workers they need under such a heavy tax rate.

The Liberals have already booked more than $500 million in revenue, but it is doubtful this money will ever appear. Put simply, workers will simply go elsewhere, and employers may begin paying cash in hand.  

If the Turnbull Government is serious about its “comprehensive, whole of government review” then it needs to confirm that the $500 million in revenue booked in the budget will not be included in the Pre-Election Economic and Fiscal Outlook statement.

Until then, it’s clear this is just another sleight of hand.

Malcolm Turnbull must also confirm he has issued guidance to the Tax Commissioner not to collect the tax from July.

And then, the Liberals need to make it clear to employers and backpackers that they will not apply any outcome of their review retrospectively.  

Anything less will send all the wrong messages to potential backpackers, many of whom have already decided to travel elsewhere.

Labor will not countenance this uncertainty dragging on for another seven weeks, let alone another seven months.

The Government needs to admit the Backpacker Tax won’t work in its current form and sit down with our farmers and tourism operators to find a better solution.

It’s time for Barnaby Joyce to decide: will he stand with regional communities or fall into line with the Liberals who are trying to con them?