Senate debates

Wednesday, 23 November 2016


Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016, Treasury Laws Amendment (Working Holiday Maker Reform) Bill 2016, Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2016, Passenger Movement Charge Amendment Bill 2016; Second Reading

6:52 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | Hansard source

I rise to support the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016, the legislation associated with the proposal for the backpacker tax, and urge my colleagues to do the same thing. Let me follow on from the comments of Senator Williams a few moments ago and put to bed some of the myths we are hearing about the 19 per cent income tax rate.

The take-home figure for overseas backpackers working in Australia in agriculture, horticulture, hospitality and tourism is higher compared to the figure for backpackers going to Canada or New Zealand. Let me repeat that to Senator Whish-Wilson: the take-home figure is higher than it is for a backpacker working in Canada or New Zealand. It is so structured for two reasons: (1) the hourly rate of pay is higher than it is in those two countries; and (2) the Australian dollar is stronger than it is in those two countries. So let us put to bed the nonsense and the myth that backpackers coming to Australia will be disadvantaged by the 19 per cent tax rate.

The best point to make about this is that backpackers with whom I have communicated are happy with the 19 per cent. Most people in agriculture, horticulture, fisheries, tourism and hospitality that I have spoken to and dealt with are happy. I for one reject the nonsense that has been put to me that we have only listened to farmers groups et cetera. Do not insult me with that. I spend a good deal of my life in rural and regional Australia and I have a very, very close link with those people.

Let me also put to bed the myth about the 95 per cent of superannuation money that is apparently being taken back from these backpackers. To those who might be interested in this discussion, the fact is that neither New Zealand nor Canada offer an employer based superannuation fund. Therefore, where is the logic in a person coming from overseas expecting to take home superannuation money, firstly, to which they are not entitled and, secondly, when they would not receive a dollar if they were working in Canada or New Zealand or South Africa? We did not bring in the superannuation scheme for young people going home to Switzerland, to Scandinavia, to the UK, the US or France. It was introduced for Australian retirees.

Let me make the point if I may, equally, with regard to the tax-free threshold. We all know that, until relatively recently, the tax-free threshold was $3,500 or $4,000. It was increased to $18,500, as Senator Whish-Wilson said in his contribution earlier in the day, to provide a fillip for low-socioeconomic Australians, and it is a good scheme. But it was never designed for overseas workers coming into Australia. They would not and do not expect—and have not asked—the Australian population to provide them with the sorts of protections that we expect as Australians: policing and all the other activities that go on.

Senator Whish-Wilson interjecting—

Many of us have worked overseas, as indeed Senator Whish-Wilson has. Name me one young Australian going overseas to work who expects to get a tax-free holiday in Europe or America or New Zealand. They do not. So what is this nonsense that we are hearing about the opportunity for young people from overseas, who do not want a tax-free environment, who actually want to come here to work—

Senator Whish-Wilson interjecting—

You can interrupt as much as you like, Senator Whish-Wilson. The unusual circumstance is that I do not interrupt the Greens. Yet I cannot have a view different to yours, Senator Whish-Wilson. I am not entitled to a view separate to yours. Offer me the courtesy, if you would, of listening in silence, learning and taking notes, and you yourself might be the better person for it. Let me summarise. Nineteen per cent is totally appropriate; it is a better deal than somebody who is going to New Zealand, to Canada or to South Africa will get. Superannuation is irrelevant, because those other countries do not offer it.

Let me come to the tourism and hospitality industry. It is a bit of a dig for that industry to be complaining about the slight increase in the levy, because which is one of the biggest industries to gain from a good backpacker program in this country? The tourism and hospitality industry. Those of us who move through the bush, which many in this place do, know that you do not hear an Australian accent in the hospitality and tourism sector in rural and regional Western Australia. Therefore, the tourism industry needs the backpackers. For them to complain about a slight increase in the levy for people leaving our country or returning to our country is a little bit beyond the pale.

Many Australians go and work overseas. I do not recall having a tax-free threshold when I worked in the United States. My son did not get a tax-free window when he was working in the UK, working in Scotland. Neither did my son working in the United States, nor my daughter working in Singapore, the United States or Panama. They all pay their tax. What are we considering the question of providing a tax-free threshold for? As the point was made earlier today, the 32½ per cent was not introduced by the coalition government at all; it was introduced by the last Labor government. We are trying to move it to 19 per cent. Nineteen per cent makes it competitive. Nineteen per cent gives Australia a reasonable return.

In response to Senator Rice's point about people not being able to move away to work seasonally, I will make these observations. At the end of seeding, I was in the eastern wheatbelt town of Kellerberrin. The crop had just gone in—the biggest crop in history. I was having a yarn with the shire president, having a yarn with local farmers, asking them who was on track to put in the biggest crop for the season. Backpackers. I said to them, 'Surely there are a few locals in Kellerberrin and Merredin and Cunderdin and Kununoppin?' They said, 'Yes, there are, Senator, but we couldn't get one of them.' They are not coming from the city, Senator Rice; they are not giving up rent.


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