To tax or not to tax backpackers at 19%

FEDERAL Member for Capricornia Michelle Landry says she's shocked the Labor Party is advocating for foreign workers to pay nearly 50% less tax than Aussie rural workers in our own country.

"Same back-breaking work, same long hours in the heat, but under Labor's plan foreign backpackers pay less tax than the Aussie workers beside them,” Ms Landry said.

"Labor wants foreigners to pay just 10.5% tax, nearly half the tax that Aussie workers doing the same job would be slugged with.”

The Federal Government has the backing of the farming industry, including the National Farmers Federation, to set a tax on foreign backpackers at 19%.

Local fruit farmer Ian Grove said the lowered backpacker tax is a big relief but the proposed 19% is still a little on the high side for his liking.

The owner of Groves Grown Tropical Fruit is located just outside of Yeppoon and knows first hand how the backpacker laws would affect the industry.

Ian said there was no doubt that it was fair for backpackers to pay some form of tax but 32.5% was "absolutely counter-productive”.

"At 32.5% the fact is there would be no backpackers here,” he said.

"Bringing it back to 19% I hope it's not too high to discourage the backpackers.

"I think our competition being New Zealand and Canada are around the 15% mark but the base rate of pay here is higher, our rates are $22.16, I think, an hour.”

The Coalition Government has put forward a fully costed reform policy to reduce the tax rate for working holiday makers, known as the 'backpacker tax' from a proposed 32.5% to 19%.

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