Independent Member for Indi, Cathy McGowan AO, is urging the Government to reverse a decision to introduce of a higher tax rate for backpackers. Ms McGowan is representing constituents concerned with the negative impact of a proposed increased tax rate for temporary workers.
Ms McGowan is supporting the Victorian Farmers Federation and National Farmers Federation campaign calling on the Government to change its policy for taxing backpackers. Backpackers earn about $15,000 on average working in Australia. Ms McGowan agrees with the effective tax rate being suggested by the VFF of 19 per cent. The proposed tax increase was included in the 2015-16 Budget and legislation is yet to be presented in the House of Reps.
In Question Time today, Ms McGowan asked Treasurer Scott Morrison to do a backflip on the tax increase to help farmers, food producers and tourism operators. View the response here.
“The proposed tax of 32.5 per cent, which comes in on July 1 this year, will have a significant impact on the horticulture and food production sector in Indi,” Ms McGowan said. “This sector includes vineyards, hops, cherries, dairy, grain and olives and small organic farms.”
In a speech to Parliament yesterday, Ms McGowan said Organic Futures director Carolyn Suggate from Bonnie Doon, Swanpool farmer Mark Foletta and tourism operator Kath Baird from Bogong Horse Adventures were three constituents concerned the increased tax will be a disincentive for backpackers and overseas workers coming to North East Victoria.
“I join with the VFF and NFF in calling for the Government to do a backflip on this tax increase,” Ms McGowan said. “There will be consequences for rural producers and tourism operators and this will impact the local economy. Food producers already struggle to find temporary workers. This increased tax acts will deter backpackers from working in rural areas.”
There are also the benefits through cultural exchange that occurs with locals as seen in Rutherglen. Chief winemaker Marc Scalzo from Rutherglen Estates has seen how overseas workers employed at the winery have interacted in a positive way with the local community.