Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Today I wish to raise the issue of superannuation payments to backpackers—generally younger people in Australia on working holiday visas. This is an issue that fruit growers in my electorate of Canning have brought to my attention from time to time and was in fact again raised with me earlier this month. However, it affects other industries where international backpackers commonly work: the hospitality industry would be greatly affected, with many backpackers working in bars, pubs, clubs, restaurants, hotels, at events, for caterers and also for a variety of small businesses and the construction industry.

The crux of the issue is that employers have to pay non-resident backpackers superannuation, and they rightly see this as a waste. The reason small businesses have this view is because non-resident backpackers can fill out a form when they leave the country to have their superannuation monies paid to them immediately, so it is not even providing savings for their retirement, as is the intention of superannuation payments. It is roughly estimated that something like half a billion dollars annually flies out of the Australia because of this measure.

Local growers—and I expect other affected industries—would like to see this requirement to pay non-resident backpackers superannuation taken away completely. However, we do have to continue to ensure foreign workers are not paid any less than Australian workers to maintain the integrity of our migration programs. Perhaps there is a possible avenue where a loading in-lieu of superannuation contributions could be made. This would see an increased wage payment being made up-front and while that person is still residing in Australia. They would hopefully spend the money here, as opposed to it being leaked from our country's economy. However, based on feedback from local fruit growers, who have a lot of firsthand experience with non-resident backpackers, they do not often spend a great deal of money while in Australia. They live simply, with little outgoing costs on items such as food and accommodation.

Local employers in my electorate, including Karragullen Cool Stores, the Blue Moon Orchard, and Casuarina Valley Orchard, have said that many non-resident backpackers take a break at the end of their working holiday in Australia and head off to places like Bali, and then spend the money they have made in Australia over in places like that. These local businesses have said the situation of paying backpackers superannuation is adversely affecting their own profitability. They are competing against other countries like Chile, South Africa and even New Zealand. Those countries do not pay outgoings like superannuation on backpackers' wages.

It is not just about the superannuation payments that employers are having to make but also about payroll tax and other outgoings. These employers are not against employing or paying backpackers—many would see them as very helpful to their businesses. They just think that if the money were spent or used in Australia then that would be far better.

Another option could be to pay a loading in-lieu of superannuation towards a registered training organisation or an apprenticeship program that would enhance the future up-skilling of Australian workers. Of course there would evidently be some costs associated with administrative and compliance changes, but this is still something to consider for the longer-term benefit of our nation.

I have raised this issue with the finance minister, but the matter cuts across a whole range of portfolio areas. It cuts across finance, treasury, employment, industry, immigration and small business. Therefore, having a broad-ranging inquiry or committee established could help by fleshing out all of the details necessary, looking at the structure of these payments and the outcomes of any possible changes.

Getting the economy back on track, being more productive, supporting small business and industry, and creating jobs are key areas of focus for the Abbott government. Looking at how we can see money employers pay to workers make a greater contribution to the Australian economy is certainly something I believe is at least worth looking at. This would be in addition to the positive measures the coalition is already taking to fix Labor's economic mess and mismanagement and provide greater incentives for business and industry.

We are also implementing practical ways to boost education and training and give a wider range of people greater access to education and training opportunities. We are reducing the regulatory burden for small businesses by cutting red tape costs by about $1 billion every year. We are lowering the company tax rate by 1.5 per cent from July next year. We want to abolish the carbon and mining taxes and are making a record investment in Australian infrastructure, creating jobs in the process of doing this. For the first time ever, the government will provide financial assistance for students studying diplomas and is providing loans of up to $20,000 for apprentices—and do we need more of our own apprentices. More support will be offered for disadvantaged students through a new scholarship scheme, and we are removing all loan fees for FEE-HELP and VET FEE-HELP, meaning equal access to loans for students no matter where they study. I believe the backpacker superannuation situation can also be improved— (Time expired)