End of financial year is a significant time for small business and with one of the most complex workplace relations systems in the world,...
The Government is suggesting it will impose big taxes on backpackers visiting Australia. All backpackers working on farms in horticulture and agriculture as of July 2016 could be taxed 32.5 cents per dollar earned.
Jeff McMahon, a third generation farmer from Queensland, and one of the largest organic fruit and vegetable farmers in the country, says he relies heavily on backpacker labour to work on his property. He says these taxes will impact his business significantly.
McMahon has employed over 3,000 backpackers in the last 20 years. He is very happy with the standard of work but he thinks “taxing backpackers is like shooting the goose who lays the golden egg”.
According to Simon Talbot from the National Farmers Federation, over 40,000 backpackers are employed in Australia, assisting around 50% of our agriculture harvesting.
What will happen to our Aussie farmers if the hordes of backpackers decreases in the coming years?
If we tax backpackers they will decline in numbers, impacting the Australian economy, the output of horticulture and agriculture and the amount of money spent on tourism.
Not only that, employers may become confused when paying taxes and hourly rates, leading to underpayments or issues paying superannuation. There is also the threat of backpackers questioning their pay, which could lead to further employment issues.
Every season, farmers are currently able to rely on the flexible and mobile work force that comes with hiring backpackers. If this change is implemented, farmers who only want to hire staff during the peak season will need to change their current workplace policies and procedures, as business owners will need to be hiring staff on a more formalised contractual basis. During peak seasons this is probably the last thing on the mind of a farmer.
Treasurer Scott Morrison says the “tourists are coming here for a holiday not a tax holiday”. He estimates the harvest tax will generate $540 million over the next 3 years.
If you are an employer of backpackers, we can support you in the change of workforce should these taxes affect you and your business. If you need help preparing employment contracts, policies and procedures call Employsure on 1300 651 415. Employsure works with employers to ensure that they are meeting employment obligations and if any problems arise we provide 24/7 professional advice.