Luke Gosling (Solomon, Australian Labor Party) Share this | Hansard source

I also rise to oppose the Treasury Laws Amendment (Working Holiday Maker Employer Register) Bill 2017. This is another episode in this government's total mismanagement of the working holiday tourism sector in Australia. Before I get into the register issue, I want to briefly take you back. Members will recall the fiasco of the backpacker tax in the 2015 budget. In that budget, the government announced that it would treat working holiday-makers, backpackers, as nonresidents for tax purposes. This meant that they would have been taxed at 32.5 per cent from the first dollar they earned. When the government said that, that message went all around the world. Damage is often done when you send out a message like that to the working holiday-makers who obviously have other options available to them. Then the government decided it would tax backpackers at 19 per cent on earnings up to $37,000 and at marginal tax rates above that. Then, in a deal to get the bill through the Senate, the government agreed that that rate would be 15 per cent. I and many of my other colleagues were trying to get it as low as possible, knowing the damage done from that initial announcement. This whole process could, in fact, be used as a case study of how not to formulate policy.

We've heard some of those opposite, such as the member for Grey, say that the working holiday-maker sector is absolutely essential, and the member for Durack said that backpackers are vital, that regional Australia can't do without them—and they're right. So why did those opposite trash the reputation of Australia as an attractive destination for backpackers? Unfortunately, the perception now is that we are a high-tax country and that other countries like Canada and New Zealand are much more attractive for backpackers. If the members opposite don't realise that that reputational damage was done then they're even more out of touch than I thought they were. I'll come back in a moment to the disastrous effects of this ill-conceived and totally mismanaged policy on our tourism industry and on our Northern Territory economy, but I'll add that I agree with the Nationals senator Barry O'Sullivan, who recently said in Darwin that the backpacker tax was one of the worst decisions made by this federal government—made by those opposite.

First, though, I will go to the specific intent of this bill. This bill is nothing more than the result of a sleazy deal with Senator Leyonhjelm to get the bill through the Senate. One of the few positive aspects of this whole policy shambles was that working holiday-makers would have been able to consult a register of employers to see if a business was registered to employ working holiday-makers. But the effect of this bill is to remove that safeguard for working holiday-makers. Many backpackers, as workers, have been exploited, underpaid, forced to live in squalid lodgings and, in some cases, sexually harassed and assaulted. We've heard from those opposite that they understand that. They agree that that has happened. They've heard the stories. This register would have at least enabled employees to look up details of an employer to be assured that they would be charged the correct level of tax. The original bill meant there was some ability to protect working holiday-makers from that type of exploitation. We oppose this bill in its current form because it removes this further level of protection for these vulnerable workers where there have been very serious cases of exploitation and ill-treatment.

In November 2016 the finance minister, Senator Cormann, defended making the register public on the grounds that it would allow working holiday-makers to identify whether a prospective employer was registered. Don't forget that; that's what Senator Cormann, part of the federal government, said. However, he has now apparently changed his opinion. He has agreed to remove the safeguard for workers in exchange for Senator Leyonhjelm's support. Senator Leyonhjelm said:

For the first time in Australia's history, it—

the register—

will authorise the Australian Taxation Office to divulge the private financial details of employers to the Fair Work Ombudsman so it can enforce government decrees on wages, including minimum wages, award wages and penalty rates.

It was reported that Senator Leyonhjelm had successfully lobbied the government to make the register private. There were also totally unsupported and scurrilous assertions that unions could misuse the bill's provisions to scare employers away from hiring foreign labour and that unions opposed to the use of foreign labour might visit registered companies to scare them off from hiring backpackers. This is just par for the course for those opposite. Union bashing seems to be the government's method of argument whenever they are unable to explain why they are abolishing good policy such as this register.

The Treasurer's second reading speech was strangely silent on this issue. He said that the bill introduced changes to ensure that details of the working holiday-maker employer register are not made public. He did not say why these changes were thought to be necessary. The fact is that removing public access to the register removes an important safeguard that ensures that working holiday-makers are not exploited. Similarly, the explanatory memorandum sheds no light on the reasons for the amendment, stating only that the bill gives effect to the government's commitments. Commitments to whom is not explained—commitments to Senator Leyonhjelm, no doubt.

So here we are at another point in the sorry saga of the backpacker tax, a totally botched policy which has damaged Australia as a backpacker destination. As we've heard from those opposite, backpackers are an important source of seasonal labour, and they've met many of these backpackers. They contribute significantly to our economy, and they bring cultural and social exchanges of benefit to our country and to their home countries. Many former backpackers now established back at home have fond memories of their time in Australia. They retain much goodwill towards Australia and sell Australia to their friends and family. But a lot of damage was done with this ill-thought-out plan, which was led by Nationals MPs. I would have thought they would have had a clearer understanding and appreciation of the importance of backpackers and working holiday-makers to their sectors and their regional communities.

Backpackers are incredibly important for the Northern Territory economy and seasonal employment requirements in agriculture, horticulture and hospitality. They also tend to stay longer than other tourists and inject a significant amount of the money they earn—in fact, much of their earnings—back into our local economies. But, as I said, many of them have stopped coming. Unfortunately, those opposite have done a very effective job in persuading them not to come here to Australia and, more specifically, to Darwin and the Top End. The perception now is that in Australia backpackers are highly taxed and countries like Canada and New Zealand are much more attractive. Added to that is the higher cost of visas for working holiday makers compared to other backpacker destinations.

In Darwin and the Top End the tourism and hospitality industry is very seasonal. The peak, the dry season, has just started; it runs from May to October. So we are now looking to tourism to take up some of the slack in the Darwin economy resulting from the winding down of the construction phase of the INPEX project. The tourism industry is becoming more and more important in the Top End. Now that the dry season is here, the industry is very stretched. There is, in fact, a labour shortage. I have been talking to tourism and hospitality industry leaders in Darwin and they tell me that backpacker numbers, working holiday maker numbers, are well down on previous years. Unfortunately, they are pessimistic about numbers as we go forward into this dry season.

At this stage, in Mitchell Street, Darwin's main tourism and backpacker precinct—and I'm sure many in the chamber have visited Mitchell Street—there are approximately 1,000 backpacker beds in the hostels. Despite there being lots of work available for backpackers in labouring and hospitality, operators are struggling to attract them to Darwin. At present, the backpacker hostels are running at about 60 per cent capacity. They should be at 85 per cent capacity now that the dry season has started. A month ago not one of these backpacker hostels had even opened, because of lack of demand. Usually, a month ago, or six weeks ago, on that shoulder season coming into the dry, they would already be at 50 per cent. So there's clearly been a direct hit to the Darwin economy. The three major hostels in Mitchell Street have projected a downturn of $1 million to $1.5 million over the coming year. That's what they had projected previously, after the backpacker tax was introduced. But in May, in the first week of the dry season, they are already down $1 million in revenue.

What is more important is that a knock-on effect goes down through the economy; the lower number of backpackers goes down through our economy. Now, $1 million in revenue may not seem like a lot to some of those opposite. In fact, for people who live in harbourside mansions, it's not even what they pay out of their own pocket to win an election. But, to us, in the Top End, in our northern capital, in our tourism industry, it's a big hit. Each backpacker bed is worth 27 bucks a night. So we're losing a lot of that revenue. In addition to that direct cost, each backpacker spends an average of $250 per week in supermarkets, retail and entertainment. They spend that 250 bucks out of their own earnings. Those earnings go straight back into the local economy. One estimate is that if, as feared, backpacker numbers are down over this coming dry season, then something like $8 million will be taken out of businesses in Mitchell Street and the Darwin CBD. Thanks a lot to those who engineered the backpacker tax and absolutely botched its implementation!

Clearly, this is going to have a big impact on our tourism economy. Tourism is vital to the Territory. That's why I'm so concerned about the ongoing impact of our attractiveness as a destination for backpackers, which would only have been enhanced by having a register where employees could check the bona fides of these employers. You may ask: 'What are you doing about it, member for Solomon?' I'll tell you what I'm doing about it. Boosting tourism in Darwin is incredibly important, particularly after the botched backpacker tax scaring tourists away. So recently, on 28 April at the Darwin International Airport, we ran a Tourism IdeasFest so that we could come up with new tourism products to try to attract some of these young people back from all around the world. I want to acknowledge all the organisers and sponsors of that event. I worked with local innovators and entrepreneurs. Local businesspeople were really worried about the impact of this drop in backpacker numbers, and we put on a one-day event at the Wirraway lounge at the airport. I thank all the sponsors and those that contributed.

Some great ideas were pitched at the end of the event, and we're going to work with those people to try to bring those working holiday-makers back. The Northern Territory government are also doing their bit. They've recently announced a $103 million tourism stimulus package to attract more visitors, to create more local jobs and to put more money into the pockets of Territorians. They're rolling that Turbocharging Tourism program out at the moment.

What I want those opposite to understand in the time remaining is that Darwin, as the capital of the north, is of strategic significance to our country. It is a strategic hub. We provide a massive return on investment to our country, and we need you to stop cutting our services. GST has been cut, hospital and school funding has been cut, and the City Deal hasn't been signed. It is not helpful, in the same way the backpacker tax changes weren't helpful. We need you to start supporting our industries, and that is one of the reasons why I oppose this bill.

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