There is a rest area on the way into Young in southern New South Wales that has become a makeshift camp for backpackers waiting for the start of the Australian cherry-picking season.
At this stage, the campers are young French backpackers, a German and a few Australians on their way somewhere else. The backpackers sleep in their cars, while coffee pots, cups and cereal bowls sit on a camp table. Helene Chaphuif, Brice Lancauchez, Charlotte Loiseau and Romain Quiru are killing time because the cherries are about 10 days late this year.
“We were here last year so we came back because it is pretty good money for picking cherries,” said Chaphuif. “We can earn A0 a day [about £150]for a very big day from 5.30am to 2pm. Sometimes the cherries are small and light – big trees with small cherries – so it’s not that much and sometimes you have big cherries, very heavy.
“We have been picking other fruits – apples, oranges, pears – but it is not as good because it is heavy work, you need ladders, it’s exhausting. We were paid A-40 for 500kg of fruit. You do a bin in three hours – so you get about A for three hours. No good. That’s why we come for the cherries.”
The group will have been in Australia for two years next March, having qualified for a second year of working holiday visa after working for 88 days on the farms. . They know about the government’s plans to increase the income tax on young working holidaymakers from 13% to 19% as it is the talk of the fruit trail, all over social media.
“It is affecting people, they are really aware of it,” said Joanne Johnson, who runs a temporary recruitment agency in Young. “We had a lot of French backpackers last year who were angry about the plan. Now they are telling friends to go to New Zealand instead.”
The issue is red hot because the National Farmers’ Federation (NFF) estimates young backpackers make up 25% of Australia’s agricultural workforce – for seasonal harvest jobs, like cherry picking, growers say it is much higher. Yet for almost two years, uncertainty has crippled the industry as the government has dithered over the rate of income tax.
Former prime minister Tony Abbott’s conservative government first proposed a 32.5% tax in the May 2015 budget. This would have changed the current rate from 13%, with a tax-free threshold of A,200, to 32.5% from the first dollar. Abbott’s Liberal party ruled in coalition with the National party – one of the last successful parties in the world that grew from an agricultural base, so it was surprising that the tax plan ever got past them.
From there the idea remained dormant as industry groups started to agitate. A year later, in the lead-up to the 2016 election, the coalition, now led by Malcolm Turnbull, announced a review of the tax rate.
Finally, in September, treasurer Scott Morrison announced a 19% tax rate, with an A increase in the passenger movement charge to A for all travellers leaving Australia and an increase in the departing superannuation payment from 47% to 95%. All Australian employees get 9.5% on top of their gross wages paid in to a retirement saving fund, but temporary workers who leave Australia are liable to a one-off tax.
To balance the package, the government proposed to reduce the visa application charge by A, increase the working holiday visa age limit from 30 to 35 and increase from six to 12 months the time backpackers could work for one employer.
The government also threw in Am for a marketing campaign to attract more backpackers to Australia. The campaign was launched at London’s Victoria station with a few fake Bondi beach lifesavers last month.
But the tax bill remains caught between the lower house and the senate even though the change was due to come into force on 1 January.
The industries that rely on backpackers are desperate for some action to slow down the falling numbers of young people coming to Australia for seasonal work. In a world where every backpacker has a smartphone and is on social media, news of the proposed new tax has travelled like a bush fire. At a senate inquiry into the bill, forced by Labor and the minor parties, the NFF estimated a fall in applications for farm work of between 40% and 90% since the tax increase was proposed..
Minor party senator Nick Xenophon said that in his home state of South Australia, tourist operators in the Riverland had struggled to fill backpacker hostels which were fully booked last year. “That is going to be pretty catastrophic for the bush, for the regions,” he said.
The president of the NFF, Brent Finlay, told the committee of a mango farm he visited near Humpty Doo in the Northern Territory. “The mango farmers left 15% of their crop on their trees last year because they did not have enough labour,” Finlay said. “They were planning to plant another 40,000 trees – they have the water and they have the infrastructure – to double the size of their farm, and they won’t go ahead with that work because they know they cannot get a labour force at the current rate.
“I have spoken to that farm a number of times this season, and their mango season [began]at the start of August … They are significantly down [in workers]again this year.”
In Tasmania, Australia’s southern-most state, Howard Hansen of Hansen Orchards and Timothy Reid of Reid Fruits are two of the biggest fruit growers and the biggest employers of backpackers in the state.
Reid’s company has invested more than Am in the business in the past 20 years. In the last financial year, he completed 817 tax statements for employees at the end of the season and 65% were backpackers.
“All of that has been based on the availability of labour in what is a very labour-intensive industry,” Reid said. “We are heavily reliant on backpackers. We have a policy of employing locals first, but there are simply not enough local people, particularly in that peak period when we require harvest.
“We have over 600 people on our farm during harvest. Again, around 65% of them are backpackers. The locals are really good but without the backpackers we do not have a hope.” Hansen said that more than 35% of a payroll worth A.5m to Am last year went to travellers on working holiday visas. He said the tax plan also threatens the jobs of the Australians who make up the remainder of the workers.
“For more than 25 years, we have used the itinerant labour supply as the spike of labour we need to help harvest the crops,” Hansen said. “If we cannot harvest the crop, we won’t have a crop to pack for the rest of the year, so we will not need as many Australians. We will not need to maintain orchards; we will not need to prune them; we will not need to make the capital investment. It is not just the jobs of the itinerant people that are at risk; it is the Australians as well.”
Johnson’s agency placed 300 people with local growers last year but she is unsure how many will arrive this time. And if the tax does go ahead, it will require a change mid-harvest.
“What about the [backpackers]that have already started and have done their tax declarations? Do we get a new tax declaration now to override the others as they continue picking?” Johnson said. “The ones flying in and out should be charged the tax rate but the ones that are staying here, that are earning the money to spend on their trip, they will pay their accommodation, get their food and drinks and the money goes back into the community.”
Yet the backpackers in Young insist the higher tax plan would not have changed their own travel decisions. “It would still be better than it is in France,” Chaphuif says. “Yes, it not as good as it was but it is still better than in France and it’s easy to get a job. Brice found a full-time job here in 48 hours but in France he spent a year not working because he couldn’t find a job for his position.”
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