Xenophon backpacker tax deal to entice unemployed on-farm

Federal Treasurer Scott Morrison announced today the government had reached a compromise of 15pc on the backpacker tax, dropping from its original 19pc rate, to ensure it passes the Senate, in the final sitting week of federal parliament and avoids hitting 32.5pc on January 1.

NTX leader Nick Xenophon and the party’s Mayo MP Rebekha Sharkie outlined details of the Seasonal Workers Incentives Trial they say is due to start in July next year and will run for two years.

They say the trial will see Australian job seekers able to earn up to $5000 doing seasonal, horticultural work, without impacting their income support payments.

Senator Xenophon said he welcomed the government’s compromise on the backpacker tax to 15pc which also included an agreement with his team to trial new ways of expanding the farm workforce, with the innovative policy driven by Ms Sharkie.

He said for first time people receiving unemployment benefits can earn up to $5000 doing seasonal work, without suffering any penalty.

“Right now, if you’re unemployed and you earn more than $104 a fortnight, you lose 50 cents in the dollar and it whittles away to nothing after just a few hundred dollars,” he said.

“It’s a big breakthrough and removes a disincentive for people on unemployment benefits to do that seasonal work where there are genuine labour shortages – it’s very much a win-win.”

Ms Sharkie said NTX was “really pleased” the government had supported its position on the trial program that would see up to 6000 unemployed people - on Newstart or Youth Allowance - working with their employment providers, to connect-in with local farmers.

“It’s about widening and deepening the pool from which farmers can draw labour,” she said.

“We think it’s a great opportunity.”

Ms Sharkie said if a person lived more than 120kms away from where an employment position existed they’d also receive government assistance.

Senator Xenophon said the trial had a $30 million budget and he supported it not starting until July next year, because the government didn’t want to rush its implementation.

He said he had discussed the seasonal workers trial with Mr Morrison with the agreement to be confirmed by the government when the legislation returns to the Senate, to be voted on some-time this week.

Senator Xenophon said the last thing NXT wanted was for the trial to be rushed and badly implemented.

The trial offers an annual living away from home allowance of $300 if the seasonal work is more than 120km from a job seeker’s home.

The National Farmers Federation Workplace Relations and Legal Affairs General Manager Sarah McKinnon said her organisation supported efforts to incentivise local workers into on-farm work, which should be encouraged

Senator Xenophon said talk about him holding the nation to ransom due to his hard-line stance on ensuring 450 gigalitres of water was delivered to SA via the Murray Darling Basin Plan was “absurd”.

He said he supported a “fundamental principle” of doing the “right thing” by the environment, irrigators and the entire Murray Darling Basin and progress on the Basin Plan was “fundamentally” needed, to avoid any stalling.

“It is going to take a nuanced and dare I say it agile approach to deal with these matters,” he said while highlighting PM Malcolm Turnbull’s involvement in negotiations with the Basin states that have strained in recent weeks, rather than Agriculture and Water Resources Minister Barnaby Joyce.

Mr Morrison said the ALP should be ashamed of them-selves for delaying the backpacker tax resolution due to “bloody mindlessness and political game playing” - but Senator Xenophon refused to apportion blame to either major party.

“Can I just quote the Bard – all’s well that ends well,” he said.

“We need a bit of Shakespeare in the last sitting week of parliament.”

But Victorian Senator Derryn Hinch said everybody can share some of the blame for the backpacker tax fiasco and at one stage Tasmanian Independent Senator Jacqui Lambie was calling for a zero tax rate.

“I supported it at 19pc because that’s less than what Canada has – we can’t go to 32pc,” he said.

“I honestly believe tho it really is a storm in a tea cup in one way, apart from the poor bloody farmers and their fruit (harvesting issues).

“When you’re a backpacker you wouldn’t have a clue what the bloody tax is.

“When you go on holidays, are you going to say, ‘Oh gee I’m not going to go to Australia and I’m not going to look at the Great Barrier Reef and Ayers Rock because their tax rate is 3pc more than somebody else, I think I’ll go to Iceland?’

“It doesn’t make sense to me but at least hopefully they can knock that one over and whether its 15pc or whether in the end it has to roll back to 10pc but I hope we get enough people on side for 15pc and get it out of the bloody way.”

Senator Hinch said he had supported a 19pc tax rate originally and was happy to go with the government’s 15pc compromise proposal.

A spokesperson for the Treasurer said the government had agreed to a two-year trial, commencing next financial year, enabling unemployed Australians receiving Newstart or Youth Allowance payments for more than three months to earn $5000 each year from seasonal work without it being assessed under the social security income test.