Horticulture lobby group claims backpacker tax would create years of labour shortage in agriculture

Queensland horticulture lobby group Growcom claims it would take an "optimistic" five years to fill the labour shortages that would result from the Federal Government's proposed backpacker tax.

Growcom's chief advocate Rachel Mackenzie today met with independent consultants Deloitte as part of the government's review of taxation for working holiday makers.

The government has delayed the introduction of its planned 32.5 per cent flat tax rate on backpackers until 2017 pending the outcome of the review.

"We do not think 32.5 cents in the dollar is a sustainable tax rate — it will drive our backpackers overseas," Ms Mackenzie said.

She said Growcom supported the compromise tax rate of 19 cents in every dollar as suggested by the National Farmers' Federation prior to the election.

"We said it was really important that we have a sustainable tax rate on the table that would not jeopardise our access to backpacker labour," Ms Mackenzie said.

"Our growers are making decisions about whether they will or won't plant crops right now … which may mean that some commodities that we're used to seeing will not be appearing on our shelves."

As part of the review, Deloitte is considering whether other government policies could mitigate any potential decrease in backpacker labour by encouraging more Australians to work in agriculture.

"You can't just turn the backpacker tap off and expect there to be Australian workers ready and willing and waiting to go to pick the season's crop," Ms Mackenzie said.

"Get the backpacker tax off the table until we have actually worked out a decent long term solution to this … and this may take five years in terms of filling the breach."

The government first unveiled its backpacker tax plan as part of the 2015 budget, saying it would generate $540 million over three years.

Originally due to take effect from July 1 2016, the new tax arrangements were delayed due to growing criticism from the farming and tourism sectors.

The review was announced by the Coalition during the election campaign and is due to be finalised mid-October.

Source: ABC News

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