AUGUST 2016
SUBMISSION TO THE WORKING HOLIDAY MAKER VISA REVIEW
Fruit Growers Victoria Ltd (FGVL) represents the interests of more than 300 growers and associated horticulture reliant businesses. These businesses range from the industry’s largest to the very smallest.
As such, Victorian fruit growers are dependent on FGVL as the first point of contact when there is an issue confronting the industry. FGVL is the industry body with “feet on the ground” and “skin in the game” when it comes to understanding horticultural issues. Growers have endured much over the past 10 years including drought, diminished availability of water combined with escalating water prices, increasing expenses, growing red-tape, hail damage, fruit fly, industry restructure and the threat of fire-blight.
No single issue has caused greater distress to growers than the Government plan to increase the tax rate charged to overseas visa holders (“backpackers”).
Large growers/packing sheds rely on backpackers to supplement orchard labour needs in peak periods and as packing facility labour. Small growers, who do the majority of work themselves, predominately use casual labour to harvest crops.
Domestic and Export markets seek the “clean, green” product that Australian producers provide. If there is not sufficient supply of labour, consumer demands will not be met and, more importantly, growers will ultimately be forced out of business.
A small snapshot of grower comments is printed below:
“No single issue will have more impact on my business than backpacker tax. This is far greater than anything global warming can do to my business”
“The tax increase takes away the discretionary income which would be spent locally in small business and tourist destinations. Local communities will be unfairly impacted if this goes ahead. The flow on effect will be immense.”
“These young people are educated, motivated and fill a void that cannot be filled by local labour. It is a casual, seasonal job.”
“To lose 1 bin in 3 as tax is criminal. The work is not easy.”
This particular idea is ill-conceived and will not return the increased tax revenue to government that is estimated. Instead, growers who have directly employed harvest labour in the past, will be forced to find alternative sources of labour, much of which has received unfavourable media coverage, for example contract labour. As many small horticulture business owners are part of an aging population this scenario may see many small businesses choosing to close the doors and walk away. Wage rates and cost of living in Australia are amongst the highest in the world. Growers are competing in an environment where, in reality, there is not a level playing field. Australian producers are subject to high production costs, high wages and tariffs when exporting. To impose on growers, the increased difficulty in securing labour for a very perishable product may well mean a reduced business size or complete exit from the industry when government is urging farmers to expand and export.
For horticulture to thrive, producers need the certainty that crops will be harvested. Without this level of certainty fruit growers cannot, and will not, spend most of the year producing a crop which is left on the tree. There are enough issues that growers have to contend with without the inability to harvest at the optimum time because there is not the labour force to enable this.
Madec, the employment service provider in Victoria’s Goulburn Valley found 4,000 jobs for casual labour during the 2015/16 fruit season. Their research shows a decline in numbers of overseas job seekers over the last 12 months. This goes to confirm what growers were observing - there were less pickers than in previous years. A more dramatic decline in numbers, as a result of increased taxation, will have an impact on every horticultural producer and all flow-on businesses that rely on them.
In closing, Fruit Growers Vic acknowledge all agriculture is struggling. Currently the dairy industry is stressed and whilst grain volume may be up this year, prices are down.
Victoria’s horticulture industry has a farm gate value of around $2.4 billion and accounts for 52 per cent of Australia’s horticultural exports. In the last calendar year earnings from horticulture were up 38 per cent in value and 7 per cent in volume from the previous year.
It is imperative that the trend continues. The core need for horticulture is a reliable source of labour.
FRUIT GROWERS VICTORIA LTD
