Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Bushby for that question. It is, of course, very important for Australia to have an internationally competitive tax rate for working holiday-makers, and the Turnbull government is absolutely committed to delivering an internationally competitive income tax rate for working holiday-makers.

The choice, of course, that the parliament has is not a choice between 10.5 per cent and 15 per cent. The choice the parliament has is a choice between 15 per cent and 32.5 per cent, because 32.5 per cent is the internationally non-competitive tax rate which has been in place since 2012-13, when the former Treasurer, Wayne Swan, put it in place. Of course, non-resident foreign workers in Australia have paid tax from the first dollar earned in Australia since 1983-84. Initially, the tax rate was 29 per cent. Wayne Swan increased it to the internationally non-competitive rate of 32.5 per cent. The government, having consulted with stakeholders—and Liberal-National Party senators, having consulted with stakeholders—and having worked closely in particular with the farming organisations, has said we are prepared to ensure that our tax rate for working holiday-makers is genuinely competitive internationally, and so we are prepared to bring it down.

The tax rate would be competitive internationally at 19 per cent. It is definitely competitive at 15 per cent. Now, why is the government not prepared to go any further? Because we do have a responsibility to the Australian people not to impose further unnecessary burdens on them when it comes to repairing the budget. The policy the Labor Party is pushing would blow a $240 million hole into the budget. But they do not care about wasting money and not figuring out how they can pay for it. We are saying that we do not want to increase taxes on Australians to pay for lower tax rates for foreign workers.