Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I rise to support the amendment moved by the member for McMahon because this has been a shambolic process from the outset. When the budget was handed down last year, there was a change to this particular arrangement. There was a proposed tax imposition on working holiday makers and there had been very little consultation with stakeholders. So it was 18 months in the making in which time the government could not resolve this matter. As a result of that 18 months of bungling, division, dysfunction and dithering by the government, stakeholders—in the first case employers who rely upon legitimate demands for labour in regions and in certain sectors of this country—were left with this matter unresolved. There was no proper consultation, no consultation with the employers or with the sector generally and, as a result, there have been 18 months of delay, confusion and uncertainty for those stakeholders. For those reasons I support the first paragraph of the amendment, which says the government's handling of the backpacker tax has been a shambles. It has created uncertainty within the agriculture and tourism sectors and within other sectors which rely upon legitimate demands for labour in this manner.

Having spoken to employers in the agricultural sector most recently, they have emphasised how disappointed they have been and how angry they have been that they have been let down by the government. Quite frankly, even though it would appear that the National Farmers' Federation has supported the compromise position proposed by the government contained within this bill, that is not the view of their members or at least many of its members, who have raised concerns that the uncertainty has already had an effect upon the supply of legitimate labour in sectors such as agriculture. As a result, they will not be able to find labour in areas in which they have had difficulties in the past. Again, this is not a particularly suitable and satisfactory compromise for many after 18 months of delay and confusion.

It is also important to note, and the member for McMahon notes it in his amendment, that the passenger movement charge increase was proposed despite the government, only weeks before, criticising an increase to the passenger movement charge when we on this side were last in office. The now trade minister attacked the change by saying it would be strangling the golden goose to impose a new tax on passenger movement. It will have an adverse impact upon the tourist industry, particularly for those very low-cost flights to countries within the region. Any increase is going to have some deterrence. The fact that the government so hypocritically attacked Labor and then only weeks later proposed an increase to this tax is quite astounding but it really shows how confused the government is. Within almost the same time frame, you have one minister coming out and attacking Labor for an earlier increase and then the Treasurer is now proposing an increase without any regard to the trade minister's comments—a government confused, contradictory and divided.

Finally, the fourth paragraph refers to concerns that have been expressed about the changes to the arrangements for working holiday makers given the rorting, abuse and exploitation that have occurred. I believe there is a legitimate demand for temporary work visa applicants in parts of our labour market. Some sectors of our economy certainly require a supply of labour to do the job and that has been the case for many a year. Equally though, we have seen situations where either there has been some widespread exploitation of work temporary work visa holders and there has been a flood of temporary work visa holders in areas where there is no legitimate demand and that is an important issue too. As a former immigration minister, I for one do support the legitimate supply and complementary embellishment of our labour force through temporary work visas including the student visa, holiday maker visa and the 457 visa.

However, there is sufficient evidence to substantiate the contention that there is an oversupply in some sectors of our economy, which is leading to the displacement of Australian jobseekers getting work. Young jobseekers in particular are not always afforded the opportunity of employment in their own communities, because of the overabundance of temporary work visas. For that reason, while I think it is not an easy matter to resolve, Labor committed to examining the manner in which both the working holiday maker visa and the student visa apply so that we calibrate the implementation of these visas with a view to making sure that we do supply the legitimate demand that is required for employers and making sure that we do not oversupply in some local labour markets that will only lead to the deprivation of employment opportunities for jobseekers in this country.

We are getting to a point where temporary worker visa holders make up 10 per cent of our labour market. This country is built on immigration. We have a bipartisan position in relation to permanent immigration and have had for some time. About two-thirds of permanent migrants have come here through the skilled stream and one-third for family reunion. Despite the fraught debates we have had sometimes on the topic of immigration, the permanent stream of migration is the one area that we have had agreed about over the last 20 or so years. It has fluctuated somewhat, depending on the growth of the economy and the demand. During the Howard years we saw very big increases in permanent migration because of the mining boom. Labor supported that approach. that is one area where we tend to agree.

One significant distinction between the parties is that we have had concerns about abuse of the 457 visas, which is why in 2013 we changed the law to bring in labour market testing. We do have a concern about the misuse and in some significant instances the overuse of temporary work visas such as the holiday maker visa and student visa where very are only driving wages down because there is exploitation, and because there is an oversupply and local job seekers are not being given an opportunity. We do not like to see any form of exploitation; nor should this parliament. We do not want to see temporary work visa applicants being exploited. We do not want to see local job seekers exploited to the extent that they are not being afforded opportunities to find work because of the misuse and overuse of these types of visas.

With respect to the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016, the amendment that has been moved by the member for McMahon expresses concerns about some of the changes. That is why we would like to see the bill examined. The one way to undermine confidence in either temporary or permanent immigration is to have the system not work. Therefore, if there are problems with the system it is very important that they be fixed. It is very important we get the system right so that we can instil confidence in the migration system and in the use of temporary migration for employment and other purposes.

In keeping with that, the Fair Work Ombudsman only last weekend released its report Inquiry into the wages and conditions of people working under the 417 working holiday visa program. This is a damning report that really confirms the scale, nature and extent of exploitation of many temporary work visa holders working in this country.

The first thing to note is that since 2014 'a total 410,503 people have been granted the right to work in Australia courtesy of the subclass 417 working holiday visa'. It says that 'in the 2015-16 financial year, the Fair Work Ombudsman received 1,820 requests for assistance from visa holders and was responsible for just over $3 million being recovered', and that 'in total, 44 per cent of visa holders who lodged a request for assistance with the Fair Work Ombudsman were on a 417 visa'. It continues:

In the same period, 76% of litigations—

more than three-quarters—

filed by the FWO involved visa holder workers and more than one third of all of the FWO’s enforcement outcomes involved a visa holder. Significantly, half of these enforcement outcomes (that is, the issuing of compliance notices, the execution of enforceable undertakings and the filing of legal proceedings) involved 417 visa holders.

That is a very damning set of statistics. It says that there is something seriously wrong with the application of this visa class. The 417 visa was expanded over a decade ago. We need now to take stock and consider the way in which the 417 visa is being used.

The Fair Work Ombudsman report says:

The FWO regards 417 visa workers as especially vulnerable due to the difficulties in understanding and exercising their entitlements because of age and language barriers. In particular, their vulnerability is increased if they choose to undertake an 88 day placement, because of the remoteness of their working location and their dependence on employers to obtain eligibility for a second year visa.

The Fair Work Ombudsman has identified issues in relation to this matter:

In addition to examining the requests for assistance, throughout the course of this Inquiry, the FWO received information from visa holders, stakeholders and the public identifying a range of concerns suggesting exploitation of 417 visa holders, including instances of:

that is, effectively, bribing an employer to give them a second year—

That is a list—and not an exhaustive one—of the complaints that have been raised with the ombudsman which have led to, in many instances, successful litigation. But the scale of these problems is of great concern to Labor. It is why this visa must be examined. It is why the member for McMahon has expressed concerns about those changes to arrangements—so we are clear as to whether in fact they are going to improve things or not.

We do not want to see exploitation and abuse. That will lead, as I say, in the first instance to exploitation of workers, many of whom are vulnerable, as the Fair Work Ombudsman has already said. Secondly, that will place downward pressure on wages so that locals looking for jobs, too, will be exploited either by, in cases where the visa is being overused, being deprived of employment opportunities or because wages will be lower because employers are not paying the legally required rates of pay. These are serious matters that need to be attended to.

The Fair Work Ombudsman, the government's own agency, only this week has outlined, chapter and verse, a significant problem with the working holiday visa program that needs to be attended to so we can have confidence in the system. It is something that the Minister for Employment must attend to as a matter of course as soon as possible.

It is not just that issue, of course. As I have said, for 18 months the stakeholders have been concerned about the problems that have arisen as a result of the unilateral proposal to impose tax on temporary work visas without any consultation or proper information provided to affected parties. It has led to this uncertainty.

Labor will examine these matters. We are keeping an open mind. We will examine them and look at the findings and recommendations of the Senate inquiry. But I think we should be very clear here that we need to make sure we get the legitimate demand right so that our employers and industries are able to find sufficient labour. But we also need to ensure that the system does not allow for exploitation and the deprivation of employment opportunities for local jobseekers.

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