Australian vegetable grower body Ausveg says the Federal Government's decision to reduce the proposed working holiday maker tax from 32.5% to 19% ought to reassure backpackers and growers alike.

Deputy Prime Minister Barnaby Joyce

The decision follows an inter-departmental government review into the 'backpacker tax' due to widespread concerns it would deter people from coming to Australia to work in farms and tourism, with expected flow-on effects for regional communities.

"We’re pleased to see that the government has reconsidered the 32.5 per cent tax rate and listened to the significant concerns of Australia’s horticulture industry," Ausveg CEO Simon Bolles said in a release.

"The decision to reduce the tax rate from 32.5 per cent is a welcome relief for our industry and we are pleased to see a tax more in line with the rate that backpackers pay in New Zealand, Canada and the United Kingdom.

"This announcement provides an opportunity to reassure backpackers and growers alike."

He said it remained to be seen what impact the revised tax rate would have on the number of backpackers coming to Australia, but the group thanked the government for coming to a compromise position significantly lower than what was proposed.

"We will monitor backpacker numbers under the revised rate to see if backpacker numbers falter and whether further intervention is required," he said.

"Given the problems with how the tax was announced in the 2015 Budget, we would hope that the Australian Government will work closely with industry to educate and alleviate fear within the growing and backpacker community.

"Australian growers need confidence that they will be able to access labour during peak seasonal periods so we look forward to the opportunity for further engagement with the Australian Government on effectively meeting our industry’s workforce needs into the future."

In a release, Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce, and Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, said the change recognized the importance of keeping regional economies strong.

"The win on backpacker tax is a win for our farmers who can get their fruit off the tree, off the vine and off to market," Joyce said.

"The decision to reduce the proposed tax rate from 32.5 per cent to 19 per cent tax maintains Australia's status as one of the most competitive destinations for working holiday makers, while ensuring they pay a fair level of tax.

"Australia's Working Holiday Maker programme provides a vital source of labour, particularly across the agriculture and tourism sectors."

Joyce added the peak tourism and harvest season was around the corner, from mangoes, litchis, bananas and avocados in northern Australia, to asparagus, cherries and berries in the south.

Photo: Apple and Pear Australia, via Flickr Creative Commons

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