Tony Pasin (Barker, Liberal Party) Share this | Hansard source

It is true to say that for some time now in our nation we have had difficulties around the policy settings relevant to 417 visa holders—or backpackers, as they have become known. They are working holiday-makers. I thought I might distil down for the parliament's benefit why we are having those difficulties on those settings. There is a very easy, binary opportunity to seek to blame one side or the other. But these issues dive much deeper than an exercise in binary blame shifting.

First of all, I think we should note that the number of visa applications coming to Australia has been in steep decline since 2012. In 2012 those opposite sat on this side, and those on this side sat opposite. We have also seen a practice that has developed whereby working holiday-makers certify that they are Australian citizens for the purpose of income taxation. That is not right and not appropriate, but it is a practice that has built up. Why is that important? It is important because foreigners who work in Australia are obliged to pay tax of 32½ per cent. If you are Australian for the purposes of the Australian taxation system then you do not pay tax at a flat rate of 32½ per cent and you can take advantage of things such as the tax-free threshold. Therefore, there has been a practice that has developed that has meant not only have we seen a drop-off in the number of backpackers coming to Australia but backpackers have not been paying the appropriate level of taxation. Even today, that is 32½ per cent. When the tax-free threshold was lifted from $6,000 and more than tripled to exceed $19,000, this operated as a windfall to 417 visa holders in the country. It meant for very many of them that they could come to Australia on a working holiday visa and pay no tax. That was never the intention.

If we fast forward to the 2015 budget, there was then a need to correct this anomaly—that is, the anomaly that saw backpackers certifying themselves as Australians for the purposes of the Australian tax law, taking advantage of the tax-free threshold. So instead of paying 32½ per cent in tax, which the law said they were obliged to, they were in fact paying no tax or at least no tax up to the point of the tax-free threshold. In the budget of 2015 was an attempt to legislate the current position with respect to the law.

I have said that this has been a difficult road, because it has. As soon as I and my constituency were aware of this issue I began of the work to see it undone. Why might I do that? My electorate is 64,000 square kilometres in size. It is very much in the top echelon of electorates in this place in the growing of horticultural products and, indeed, I would argue, agriculture more broadly. So there is a specific and strong demand for seasonal workers in periods of peak demand at various times throughout my electorate.

I would like to pause at this point to say: isn't it great that we are having a discussion in this place about the need to supply labour in peak periods of demand? It speaks to the strength of the agriculture and horticulture industries in this country. I am much happier having a debate in this context than in the context of communities suffering from the effects of a downturn in commodity prices and a lack of jobs.

I should also note that I see this as a debate of immediacy. It is a debate for today, the short term and the medium term. I think both of us—that is, those who sit on both sides of this place—would like to see more and more Australians taking up these jobs. That is the long-term objective: to take people from welfare and put them into work and put them into positions where they can take up this temporary work. Whilst in any one particular location this work can be temporary, collectively it can amount to effectively full-time work around the country. Indeed, my electorate is littered with stories of people who began their business as employees in a temporary setting, moved to communities and over time worked up to a point where they not only are working in that capacity but have acquired businesses and have developed them.

We got to a situation in 2015 where the government effectively legislated the position of the day. That was to come into effect in the middle of this year. In the lead-up to the federal election, we obviously indicated that there was more work to be done on this policy. At this point, I think it appropriate to thank the current Treasurer, the Hon. Scott Morrison, for his efforts in relation to this matter. The member for Hinkler is smiling. I can tell the member for Hinkler, as he well knows, in his absence in the Liberal party room, that one short, fat little member for Barker got up and said, 'This just was not going to fly,' after we had resolved the superannuation debate.

Myself, the member for Durack and the member for Grey then met with the Prime Minister later that week and indicated that this matter needed to be resolved. I was part of that delegation in my role as chair of the backbench committee for agriculture, Ms Price was part of it on behalf of Northern Australia and the member for Grey was there in his capacity as chair of the Liberal Party rural and regional caucus. As a result of that meeting, we saw a number of discussions take place over the intervening two weeks. What we have seen is a significant change to our position.

At this point, so that the member for Hinkler does not get too upset with me, I will say that these voices were lending weight to voices from deep within the National Party room. That is why we are such a strong party. As somebody who came here as something other than the coalitionist, I am glad to say I am now a coalitionist, because I see what we can achieve. We all have our strengths and weaknesses, but I think it is fair to say that this is one issue where the Liberal Party room had a lot to say about what needed to happen.

So then, what have we done? We taken the effective tax rate, which I should say operates today—this is something that I think is lost on the member for Hunter; the current operating tax rate is 32½ per cent—and we have taken it to 19 per cent. We have provided $10 million to Tourism Australia to seek to address the fundamental causative concern here, which is that the number of backpacker visa applications has been in steep decline since 2012. That $10 million for Tourism Australia to arrest that decline is, quite frankly, a sensible approach. We have reduced the application fee for working holiday-makers by $50 and we have raised the age of eligibility to 35. That is to say nothing of the one employer rule, which we have tweaked significantly to mean that you could work for a single employer for 12 months, or up to 12 months, provided you undertake that work in two separate locations. These are all measures that go towards providing an additional supply of backpacker labour into the Australian marketplace. Why, you might say, is that important for my electorate? Well, as I said earlier, we are such significant producers of agricultural and horticultural products.

Now, there are those opposite who have attempted to play a little politics with this. They say that it took the Liberal-National Party some time to resolve this issue and, true, it did. But the problem for the member for Hunter is that he has been in this place all that time too and, instead of coming to us and coming to the minister with a proposal, all we see is the member for Hunter whingeing and whining about the performance of the Deputy Prime Minister. It is not helpful, with respect.

The National Farmers' Federation know what is going on. On 27 September, after they saw the release of our position, they said:

Farmers breathe sigh of relief at Backpacker Tax decision.

If it was not clear enough about how the National Farmers' Federation and their members think about those opposite—

Ms Chesters interjecting—

The member for Bendigo best be careful, because I might remind the House about the ban of the live export trade. On 11 October 2016, the National Farmers' Federation said:

Labor abandons farm sector on backpacker tax.

Why do they say that Labor has abandoned backpackers? They have abandoned backpackers, and we have made the decision. We do not make the decision—once we had come to a positive policy outcome—to delay it and wait for it to come to this House, play politics and send it off to a committee. We socialised it immediately. We called meetings of the backbench committee for agriculture by telephone conference. There was an extraordinary cabinet meeting to approve it. We understand the need to get this position socialised in plenty of time to ensure that backpackers continue to come to Australia.

Sadly, those opposite do not. Indeed, no-one inside or outside this place has known what the Labor Party position on the backpacker tax has been—no-one. We did not know whether they were supportive of the change; we did not know if they wanted other changes. One thing we did know—and this is what is a bit cute about the position they are adopting now, standing in this place and criticising those opposite whilst at the same time telling us that they will ultimately support this bill—is that the $540 million these changes will create has been banked by those opposite in the lead-up to the July 2016 election. They took those funds and expended them as part of their costings.

The final thing I want to reflect on is that there are two voices that are no longer in this place who were the strongest advocates as we began the campaign to change the backpacker tax in 2015 building through 2016. They were the former member for Braddon and the former for Lyons. Those two gentlemen were fierce advocates for their communities and fierce advocates for Tasmanian growers. What we have had from the new member for Braddon and the new member for Lyons is deafly silence on this issue. Indeed, the new member for Lyons, in a radio interview, indicated that he did not think the Labor Party would support these changes. I expect his position has changed now that someone has told him that from the very get-go the Labor Party was banking these savings and spending this revenue.

These changes are emphatically good news for agriculturalists and horticulturalists in Barker. Whether you are a producer of seed potatoes in the south-east of South Australia, a stone fruit grower in the Riverland, a vigneron in the Coonawarra or you are running a broadacre property through the Murray and Mallee, these changes make it more likely that you will have the necessary backpacker labour at periods of high demand.

This is a government doing the right thing. We went to the election and we were told clearly that we need to effect changes to the proposed policy. We proved that we have something other than a tin ear on this issue. We have proved it on superannuation and we have proved it now on the backpacker tax. I commend the bill to the House.

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