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Backpacker tax ruling might entice holiday workers back to Australia

Australian farmers are not surprised by a Federal Court's decision on Wednesday, to overturn the controversial backpacker tax.

The Federal Court in Brisbane ruled in favour of an international tax accounting company, US-based, which had mounted a legal challenge on behalf of British citizen Catherine Addy against the 15 per cent tax on working holiday makers. initiated the court action against the tax in January 2017, arguing the tax on backpackers was invalid because it contravened non-discrimination clauses built into tax treaties Australia had signed with the United Kingdom, the United States, Germany, Finland, Chile, Japan, Norway and Turkey.

The Commissioner of the Australian Tax Office has the opportunity to appeal the ruling, and the Federal Government said it will wait for all legal proceeding to conclude before changing any of its policies.

Victorian Farmers' Federation spokeswoman Emma Germano, an outspoken opponent of the backpacker tax, said the ruling would send a message to potential workers overseas. Ms Germano said the number of backpackers coming to work in Australia had "dropped off" following the introduction of the backpacker tax, but that had turned around, following a number of changes to the working holiday maker visas in recent times.

But chief executive of the National Farmers' Federation, Tony Mahar, feared another change to the taxation regime for backpackers will only create further uncertainty.

Deputy prime minister urges calm on backpacker tax
Meanwhile, Nationals leader Michael McCormack has warned against making a catastrophe out of a Federal Court decision to overturn the federal government's backpacker tax. McCormack said the government would wait to see whether the Australian Taxation Office appeals against the decision.

"Let's not catastrophise the situation. The ruling only came out - it's more hours than it is days," the deputy prime minister told reporters in Shepparton on Thursday.

McCormack said the government would take on board the decision, noting backpackers were needed to pick fruit on farms across Australia. Tourism and Transport Forum chief executive Margy Osmond said the judgment created more uncertainty around the backpacker tax. "Put simply, this bad tax creates further uncertainty and must be reviewed by the government, regardless of any response by the ATO to this judgment.”


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