Lisa Chesters (Bendigo, Australian Labor Party) Share this | Hansard source

'Debacle' is the only word you can use to describe the government's performance on this issue. Let us just remember that it was their tax that they introduced in the 2015 budget. It was their decision to tax backpackers 32.5 per cent for every dollar that they earned. That was their decision and it was instantly unpopular with their constituency and it was also instantly unpopular—and this might shock the coalition—with our unions. They were not happy that we had decided to adopt that position, because they argued that it was an issue of fairness. So perhaps the government might want to check the submissions from the unions about what they argued in relation to the 32.5 per cent. The government went for a quick tax grab. It went through the parliament and it has been sitting there. Since then, with the war within the coalition, they have not been able to resolve this issue until just recently. Yet they seek to blame everybody but themselves for their unhappy marriage and their inability to resolve this issue.

The bill before us, the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016, drops the tax to 19 per cent. But it is still a tax. Let's not pretend that it is not. You are still taxing backpackers 19 per cent. Some of the language and the rhetoric in media suggest that it has almost dropped off entirely. That is not true; it is still 19 per cent. That is less than the 32.5 per cent, but it is still 19 per cent. And you have to ask: why 19 per cent? Why is it 19 per cent? That is one of the reasons that this side is referring the bill to a committee. It is such a random figure. There is no other tax rate of 19 per cent. Yes, they have put it out there in terms of economics, but you cannot trust this government when it comes to economics. This needs to be tested.

What we have seen, on cue and as expected, from government members is a lot of alarmism. They are blaming the introduction of their own tax as the reason that the number of backpackers is dropping off. They are saying that their own tax is the reason that fewer backpackers are coming here. That is a really simple proposition that they have put forward, but they are not acknowledging that it is their own fault if that is the sole reason that backpacker numbers are dropping. The truth is that there are other reasons that the numbers are dropping. Another reason that this bill needs to go to a Senate inquiry is that we need to look at some of those other reasons. We need to really explore why it is that the other parts of this package have been put forward.

I am not surprised that members opposite are not referring to the Fair Work Ombudsman report that was released over the weekend. It was a pretty damning report of the backpacker visa, the 417 visas and the 462 visas. This report found that a third of the backpackers that they surveyed are being underpaid. Perhaps the reason that backpacker numbers are dropping is that they are being exploited—something that the government is choosing to ignore. The government is running away from genuine significant reform on the exploitation of backpackers in our country. I am not surprised but I am disappointed that the government is not acknowledging that this could be a reason that backpacker numbers are dropping off.

Farm work is hard work. There is no denying that farm work is very hard work. It is regional; it is remote; and it is hard to get to. And our farmers are in competition with so many other industries when it comes to backpacker labour. Something that the government are also not acknowledging in this debate is that, whilst we have about 200,000 backpackers in this country at the moment, only about 38,000 of them ever step foot on a farm. So, for all of their ranting—'We need to push through with this right now to get the harvest off the trees'; 'We need to push through with this right now because this is vital labour working on our farms'—what they are not acknowledging is that it is also about the 160,000 backpackers who will never step foot on a farm.

What they are not acknowledging is that, with the backpacker visa, you can work anywhere in our country. It is uncapped. They are directly competing against young jobseekers. I will just give some examples of where some of these backpackers are working. They are working in mining, they are working in construction and they are working in beauty. They are even working as social workers. You would think that having backpackers working as social workers was a bad policy direction. We are talking about social workers who deal with some of our most vulnerable children, foster children. We have backpackers working as social workers!

It is so important in this debate that we acknowledge the original intent of the backpacker visa. In 1975 the working holiday visa was introduced by the Australian government as a cultural exchange program. It was an opportunity to foster closer cultural ties with other countries, so young Australians could go over there and their young people could come here. In 2005, under the Howard government, a new option was introduced allowing 417 visa holders a chance to stay for a second year. This is when we saw the backpacker visa become a labour supply visa. The government back then created some significant problems, and we are seeing the repercussions of that a decade on.

The Fair Work Ombudsman's report that was released on the weekend exposed that the fact that you have to perform those 88 days to get a second visa has created a culture of exploitation. Today the backpacker visa is becoming a cultural exchange of exploitation. That is what came out in the report released on the weekend. A third of backpackers are not being paid their correct entitlements. We are not talking about a handful of backpackers here; we are talking about a third of the backpackers they had surveyed. We are talking about people having to pay for the opportunity to work 88 days to get their visa extended. Let us just explore and expose the sham that this visa has become. The government does not want to talk about this. It only wants a bandaid solution—'Let's just fix the tax. That will turn backpacker numbers around.'

They are kidding themselves if they think that by lowering the tax rate they will fix our international reputation. Other countries are upset that their young people are being exploited by Australian businesses. It was evident in the Fair Work Ombudsman's report. They spoke to consuls here in Australia. The treatment of their young nationals in our country by Australian employers and Australian industry has been raised time and time again. The report found—and the government has not acknowledged this—not only that a third claimed they were paid less than the minimum rate but also that they were forced to work excessive hours, were being sexually abused and were working and living in unsafe conditions. The report goes into detail how some employers deducted from workers' pay without even asking their permission. It goes into detail about how workers were forced to stay in substandard living arrangements and then have that taken out of their pay.

There is an ugly underbelly when it comes to this visa, yet the government does not want to talk about that in its package of reforms. It is really frustrating that the only thing we really have to debate today is the tax measure. What is not before us that the government should be focusing on is cleaning up this visa. Instead of introducing measures to clean up the seedy underbelly and the exploitation associated with this visa, the government wants to expand the eligibility up to 35. But young Australians cannot go and work in the UK up until they are 35. Young Australians cannot go to Canada and work up until they are 35. The original intent of this was a cultural exchange. What impact will expanding the eligibility up to 35 have on our jobs market? This is the question that needs to be asked.

Then there is working for the same employer in two locations. How will that help our ag industry, which the government cares so much about? What it really means is that employers in hospitality, employers in construction and employers in mining—the bigger firms out there—will simply move backpackers around, making it even harder for the agricultural industry to attract the workers they so desperately need.

The government is simply ignoring the fact that it is not just the tax which is why backpackers are choosing not to come to this country. Conditions in their own countries have improved. The treatment of backpackers in this country has to be a factor. The industry has to embrace reform. If you exploit backpackers and treat them appallingly, they will stop working here and they will stop taking up that cultural exchange, because who wants a cultural exchange of exploitation? I encourage members of the government to read this report and see the failings of their own minister to clean this up. The Minister for Employment and the minister for immigration are doing nothing to clean up the exploitation of vulnerable backpackers in our country.

One of the reasons why it is so hard for farmers to attract people to agriculture—and I reiterate that about 200,000 backpackers are in our country and AUSVEG identified that about 38,000 work on farms—is that they are in competition with a number of other industries, including meatworks. An example in my electorate saw local workers displaced. Don KR is a big employer, with 1,500 people. In the lead-up to Christmas local casuals get extra work to help them through the Christmas period. Castlemaine is a town of 6,000. Don KR used a labour hire firm with Taiwanese backpackers. We now know that they have been engaged in some of the practices exposed in the Fair Work Ombudsman's report. Basically, Don KR turned around and said that they were cheaper. They said it in the local media: 'They are cheaper than Australian workers, so we are going with the backpackers.' There were 200 jobs lost locally.

I am sure there is a farmer with some fruit who would rather have those 200 backpackers, but this is the competition they are in. The government has failed to do proper labour market testing, labour market analysis, about where backpackers are working. They are here ranting, with this huff and puff, about why we need to drop the tax to get backpackers in to pick fruit, when the majority of backpackers will never walk onto a farm. Backpackers are increasingly being used in construction and in mining.

We must acknowledge during this debate—and not one member across the chamber has—the unsafe workplaces in construction that some of our backpackers are working in. On my Facebook page, I have had the haunting image of the young German backpacker with her smiling face. She was here for a cultural exchange when, last Monday, she tragically lost her life. The 27-year-old backpacker fell down a 35-metre shaft to her death on a Perth construction site. She worked for a company that has underpaid workers and provided substandard working conditions. This happened on the back of two young Irish construction workers who were crushed and killed 12 months ago. One of the most dangerous places to be employed, it appears, is as a backpacker on a construction site or in the farm industry.

The government is not ensuring that the employers of these guest workers in our country have the proper health and safety procedures in place and in check. The intersection between labour hire and how employers are treating backpackers needs to be explored, which is why we have suggested that this bill go off to a Senate inquiry to be reviewed. There is a lot in the package that the minister is responsible for that we will not get the chance to debate, which is why it is necessary for it to go off to a Senate inquiry so that questions can be asked. The proposed tax rate of 19 per cent is an arbitrary figure. It is a bit rich of the government to stand here and say, 'Don't worry, we've balanced the books. It will all work out.' You cannot trust the government when it comes to economic figures. You cannot trust the government when it comes to economics. You also need to call them out on their ranting and raving that, if we do not do this right now, the harvest will not get picked. It is their own fault and of their own making. We need to explore the impact that backpacker labour is having on jobs in our industries. It needs to be called out for what it is. We need to ensure that every worker in this country—whether they are Australian or a backpacker, on a farm, in construction, at Don KR or at any number of places—are paid appropriate wages, are treated with respect and dignity and, quite frankly, can go home at the end of the day.

For the young German backpacker and the two Irish backpackers, and anyone else who has had a horrible experience through our backpacker visa program, the cultural exchange needs to end. This visa needs to get back to what it was originally intended to do: assist closer relations between two countries. It should not be used as a cheap source of labour for Australian industries to undercut the wages and jobs of Australian workers.

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