Thursday, 24 November 2016
Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016; Consideration of Senate Message
Very briefly, because there has been extensive debate about this in the Senate: I rise to support the opposition's motion and the Senate amendments. We have spent quite some time talking to producers, growers and farmers around the country after the announcement that came from the government out of the blue that was going to fundamentally change the political economy of many growers in this country. The message that came through loud and clear was that in many places they rely on backpackers because they advertise locally and are unable to get local labour. But, more than that, many of the backpackers at the moment are not actually paying any effective tax, because they tick the box on the form to say that they want to be treated as a local resident for tax purposes. What that means is that, if you are a backpacker from elsewhere in the world looking around wondering which country to go to, you say, 'I know I've got the option to go to Australia and pay no effective tax, provided I earn a certain amount of money, and, if I do pay any, I can get some of it back at the airport on the way out.' That made Australia a destination of choice for many backpackers, and it was not just good for the farmers and the growers; it actually meant the money they earned they spent here in Australia. Then along comes the government and puts all of that at risk—not only local farmers and growers but all of the businesses that rely on backpackers spending their money.
In the Senate, the Greens put a pretty reasonable proposition, which was: let’s go back to the situation that more or less applies for those who tick the box as local residents, and you would have the equivalent of the tax-free threshold applying. Then there would be no question of parity or disparity and you would have a win-win for everyone. We did not get that up, but what we were pleased to support and work with the other parties on was something that would be better than what the government proposes, and that is 10½ per cent—and that is what the government should accept now. The government has been unable to get a deal of its own through both houses of parliament, so it has fallen to all of the non-government parties to work out a way through. The non-government parties have worked out a way through, and that should be supported right here, right now.
Lastly, one thing I cannot get my head around is that we have people getting up and saying that, if we do not do something, the default position applies and 32 per cent is the rate, and then we have this bill saying that we have to cut it to 19 per cent. If that is the case—if that is true—how is it that a tax cut like that is going to raise revenue for the budget? It is phoney economics. This was all done simply as a revenue grab without any thought as to the consequences. The government has been called out, rightly so, and now it has a chance to fix it. It should take this opportunity that has been presented by the parliament. It has been left to everyone else to fix the problem—and fix it we have. It is not perfect, but it is much, much better than what will happen if the government gets its way.