Thursday, 24 November 2016
Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016; Consideration of Senate Message
I speak as a person that, as I say, represents probably more backpackers than anyone else. You also have to understand that I represent workers who sometimes feel threatened by backpackers. You find your way through this. This is the amendment I would like to move: that the moneys currently paid to superannuation be redirected to the government as revenue for the government and that all discriminatory backpacker tax be removed.
It is an enormous onus on farmers and tourism operators. A lot of these backpackers work for tourist operators. Most the backpackers can speak two or three languages so they are excellent people to employ in this area. It is an onerous burden upon them to have to do all of the paperwork for superannuation. A lot of these backpackers do not take their superannuation with them. You can say, 'Oh well, that is revenue to the government.' But I think most of them do take their superannuation with them. We would then relieve the farmers and the tourist operators from the loathsome burden of having to pay superannuation to a person that has no relevance to Australia. Then the backpackers' employers—the farmers and the tourist operators—would be thanking the government, not cursing them, and the government would get the revenue. But as it is now, there is a very good chance the government will get no revenue—aided by both the tourist operators and the farmers that employ the backpackers.
The logic was there but no-one ever discussed it with any of the people that were concerned. The government stupidly went on in complete ignorance, even when they were told what was a logical way to go that would lead them as heroes to everybody; they completely ignored that. And as for the NFF, I would not take too much notice of the NFF. (Time expired)
I rise to support the Bowen amendment supporting the Senate amendments, which have finally come. After a decision that was announced in the May 2015 budget, we are here now at the end of November, more than 18 months later, actually debating the legislation that has finally been determined by the Senate over there. What the Senate determined was consistent with the consultation that we have had on this side between the member for Hunter, looking after the agricultural sector, and myself, looking after the interests of tourism. Both of those sectors are vitally important to the future of our national economy. They are vitally important for jobs, particularly in regional Australia.
Since the election, I have travelled around and had roundtables in Hobart, in Darwin, in Alice Springs and in Cairns. All of those communities rely upon a seasonal workforce, particularly in places like northern Australia, where the tourism season is not 12 months long. Tourism activity in places like Broome and Cairns relies upon seasonal workers, just like the agricultural sector does due to the nature of agricultural production.
What we had here was an announcement in a budget without any economic modelling, without any consultation with the sector and without thinking through the economic implications of this. So, instead of actually getting taxation paid by backpackers, they were getting backpackers not coming and therefore not just losing taxation revenue in terms of income tax but losing corporate tax, losing that economic dividend that comes from economic activity. But those opposite dug in for more than a year—the rest of 2015 passed by; the 2016 budget came and went. The election campaign came and went. The member for Hunter and I were out there day after day, along with members in Tasmania and other regional members, talking about the impact that this was having in their communities, and they ignored it.
But, finally, during the election campaign, they announced a review. Then they announced a deferral. Still, we did not see a substantial proposal from the government until they sat down with the NFF, and the NFF—my goodness me, you would not want to be in a trench with them—got thrown a couple of carrots, said, 'Thank you very much,' rolled over and failed to continue to represent their constituency.
I am pleased that the Tourism and Transport Forum and the other sectors—Qantas, Virgin and AFTA—continued to put forward the argument not just about this but about its being compounded by the farcical situation of repeating the process that occurred on the backpacker tax for the increase in the passenger movement charge. Just two weeks after, the tourism minister stood up here and said that increases to the PMC were choking the golden goose that was the tourism industry. He showed himself to be a goose by having this proposal introduced.
Again, we sat down with the Department of the Treasury and the Treasurer's office. We asked them for the economic modelling—there wasn't any; they had no consultation with the sector whatsoever. Then last night, of course, they brought on a vote in the Senate and lost it. Today they brought on another vote in the Senate, a recommittal, and they stuffed it up as well, because they were still doing deals in the corner of the Senate over no tax increase for five years into the future, just after the same people promised at the election campaign in July that there would not be an increase. This is what the deal they did with One Nation was, but of course that has been knocked over procedurally as well, and they have got to recommit it and fix all that up as well. This is a bad— (Time expired)
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.