Wednesday, 9 November 2016
Questions without Notice
Working Holiday Maker Program
My question is to the Minister representing the Treasurer, Senator Cormann. Twenty years ago both sides of politics agreed that enterprise bargaining was better than government wage setting at promoting productivity, wages and employment, yet we still have government-imposed penalty rates, award wages and minimum wages. The Fair Work Ombudsman is responsible for enforcing this, but up until now economy-wide enforcement has been impossible due to a lack of data.
In your backpacker package you propose to allow the tax office to divulge the private financial affairs of employers who are not suspected of contravening tax obligations to the Fair Work Ombudsman. This will mean that, for the first time in Australia's history, there will be, effectively, enforcement of government wage setting to the detriment of productivity, wages and employment. Why is the Liberal-Nationals government doing this?
I thank Senator Leyonhjelm for that question. As I said in an earlier answer, the government's working holidaymaker reform package not only ensures working holidaymakers pay fair tax on their earnings; it also ensures Australia's arrangements are internationally competitive.
To help address concerns about the exploitation of working holiday-makers their employers will need to register with the Australian Taxation Office. Registration will be simple and easy for employers. The employer register will provide valuable data on who employs working holiday-makers, what sectors they are engaged in and where the employers are located. The ATO will report annually to the Treasurer using information obtained from the register.
Senator Cameron interjecting—
Sharing of information between the ATO and the Fair Work Ombudsman will allow the commissioner to disclose information that is relevant to ensuring an entity's compliance with the Fair Work Act 2009—and I am surprised that Senator Cameron appears to be objecting to that. This will provide greater protection to working holiday-makers. This specifically addresses the Fair Work Ombudsman's report, Inquiry into the wages and conditions of people working under the 417 Working Holiday Visa Program, which recommended greater collaboration between the ombudsman and the Australian Taxation Office.
The report also supported the establishment of a publicly available employer register for employers of 417 visa holders. The ATO can already disclose particular tax information to other government agencies for specific purposes, including agencies dealing with social security laws such as Centrelink and Medicare; APRA and ASIC; and state tax offices and law enforcement agencies.
Award wages are, of course, meant to be observed. It is not correct to say that this is the first type of mechanism to ensure compliance with the law for wage setting. The arrangements for the backpacker industry are designed in a way that is adapted for the particular circumstances of this seasonal workforce.
In your backpacker package you propose to publish on the Australian Business Register the names and locations of all the employers who intend to hire backpackers. How likely is it that backpackers will be perusing the Australian Business Register? Isn't it more likely that the Australian Workers' Union will peruse it instead and then pay those employers a visit?
Opposition senators interjecting—
This will allow working holiday-makers to identify whether a prospective employer is registered. Employers who are registered will be able to withhold tax at the new 19 per cent rate. Other than identifying that an employer is a registered employer of working holiday-makers, and the date of registration or deregistration, the register will not provide any information that is not already available on the ABN Lookup website. We expect that employers on the register will be those who are doing the right thing. There should not be a reason for unions to make specific contact with employers on the register, as they should be compliant employers.
In your backpackers package you propose to require employers—many of them farmers who intend to hire backpackers—to fill out red tape forms and pass a fit and proper person test, requirements which are not imposed on employers who only hire locals. Isn't employing people a noble act that should not be restricted just to people deemed fit and proper?
I thank Senator Leyonhjelm for that second supplementary question. As I noted in my response to his earlier question, registration for employers will be once off, simple and easy. The ATO will ask employers to register by answering a few simple questions. For new employers of working holiday-makers, this requirement will be incorporated into the existing ATO employer pay as you go withholding registration process. The ATO will be able to cancel an employer's registration for a variety of reasons, including if they cease employing working holiday-makers or if they are found not to be a fit and proper person. The fit and proper person test is not an onerous one. This is intended to prevent exploitative behaviour.