We have a new federal government and that means a six-month review of the backpacker tax.
Another review which I’m sure will come up with the same result as the last one: the backpacker tax is bad for business.
Make no mistake, the backpacker tax will be an expensive drain on two of our biggest industries.
The agriculture and tourism industries have put this case to government, and no number of reviews will change the outcome.
Our farms rely on working holiday makers for essential labour because of the seasonal nature of agriculture.
And our tourism industry thrives on overseas visitors using our facilities and soaking up our culture. Each year, more than 40,000 backpackers work on our farms.
They contribute roughly $3.5 billion to the national economy.
But the federal government seems intent on destroying that revenue source.
The government claims the backpacker tax will raise $540 million over the next four years. But that’s assuming backpacker numbers remain steady.
Realistically, there’s no way the tax will create this much revenue.
Backpackers aren’t stupid. They know an extortionate tax rate when they see one, and we risk losing them to other countries.
So we can say goodbye to a productive agricultural sector and goodbye to many tourism dollars.
If the government continues to argue the tax will generate half a billion dollars, it’s either extremely naïve or in denial about the effects of its own policy.
We are already beginning to see how the tax will affect our industries, and it hasn’t even been implemented.
The government’s latest international visitor survey has revealed that backpacker numbers slumped 1 per cent in the 12 months to March this year.
Spending dropped 2 per cent and the number of backpacker nights spent in Australian accommodation fell 7 per cent.
The government should be sitting up and taking note of these figures.
It’s not often that a government gets to witness the effects of a policy before it is implemented.
It still has a chance to back away.
I suggest the government uses the next few months to think very carefully about its next move.
