Andrew Broad (Mallee, National Party) Share this | Hansard source

I am leading there. He is listening. I have to say that at least the shadow minister for the agriculture is listening. I must say I will give credit to that. He might even learn something.

The free trade agreements are an opportunity. Water is ultimately the lifeblood of my irrigation community that needs to be addressed if we are going to capitalise on the free trade agreements. Unfortunately, the world's worst water minister, the worst water minister in the history of the Australian Commonwealth, was Penny Wong. In my patch she bought irrigation blocks, took the water off, made them pull off that infrastructure and take that out of production for five years. In contrast, Barnaby Joyce, when he was shadow water minister, made an election commitment that we were going to modernise the irrigation scheme in my area with $103 million of federal funds. It has now been built and the confidence is back. We are seeing that people are buying and expanding their horticultural products. That is from water infrastructure.

We all know that we need to get our product from where we grow it to the market place. The federal government has committed $220 million to upgrading the railway tracks to get our product to the market. I must say that in the history of the Commonwealth biggest contribution to the Mildura line has been $25 million. We have now put $220 million into it.

But labour is the part that we are going to need, because of course when you pick fruit it does not make its way from the vine to the box by itself. Someone has to do that. The tax ruling that said that a foreign worker, for taxation purposes, needed to be charged 32.5 per cent, with impact on our backpackers, simply was not fair. There is no way you can say to someone they are going to work in 42 degrees heat or hotter in Mildura and you are going to take a third of their proceeds. 32.5 per cent was not fair, so I launched strong advocacy with my coalition partners to see how this could be looked at and in a more fair way. I have to pay tribute not just to members of the National Party but to backbench members of the Liberal Party, who took a very strong position on this and assisted as we looked for a solution. That is in contrast to the shadow minister for agriculture, who offered no solution. He was happy to say nothing, and here we have just listened to 15 minutes of his diatribe, in which we still did not hear any solution—no answers.

I had a four-point solution. That is, a foreign worker should pay tax. It is very hard to argue that a backpacker should not pay any tax. A foreign worker should pay tax. They do draw on our services by driving on our roads and using our health system while they are here. It is appropriate that 417 or a 462 workers should pay a level of tax; 32½ per cent was clearly not fair and we made that point. An Australian worker must pay tax; therefore a foreign worker should pay at least as much tax. The burden and the onus on the employer must be simple to administer and it must ensure that the workforce continues to come. As I said, there are three things that are important if we are going to capitalise on the free trade agreement. They are water, infrastructure and labour—it is very important that the workforce continues to come. I believe where we have landed on this pretty much hits every one of those three points.

An Australian worker would normally pay about 13 per cent on a casual rate—pretty easy to administer. So of course we could have the discussion: why do we not land on 13 per cent? Thirteen per cent would be pretty simple. It would mean that because an Australian pays 13 per cent then a backpacker would pay 13 per cent. However, there are some snags as we work this through.

We, in the well-meaning intention of our foreign aid policy, have said to the Pacific Islanders that we will as part of our aid package allow them to bring their workers into Australia, particularly to work in horticulture, and we will charge them a 15 per cent tax rate. It does not work for every horticultural field but it has been very successful, and we hope to expand and grow that.

I have examples in my electorate of farmers who bring in Pacific Islanders and then also co-match additional funds so when that Pacific Islander returns to their village, they put that into infrastructure projects. So it actually not only supports our aid program but also allows well-meaning Australians and our horticulture sector to partner with Pacific Island towns and villages to contribute, to put in electricity and plumbing.

However, it is very difficult to then argue that a backpacker from a country like Germany, for example, also deserves the same taxation rate as a Pacific Island nation—under 15 per cent—so the figure landed at was 19 per cent. Nineteen per cent has some merit behind it because we are quite aware that one of the most important parts of the scheme is that the workers would continue to come here. Australia, of course, is a great country. We think it is; otherwise we would not be here. And I am sure that people who come and visit Australia have a positive experience. However, the take-home wages here need to be more than what workers can earn in Canada or what they can earn in New Zealand—our competing countries. And because the wages in Australia are reasonably high, with a 19 per cent tax rate, a backpacker who works in Australia is going to put more money in their pocket than if they went to New Zealand or if they went to Canada. Even though the tax rates might be lower there, the take-home pay, the standard of living and the opportunities that come from working as a holiday maker in Australia are going to be substantially better. So that certainly ticks that competitive box.

The other thing is we realise that some of our backpackers are working now in quite highly skilled jobs on our farms. I know a lot of our grain growers would be quite excited about the forthcoming harvest. There is a harvest coming and if it will stop raining, we will be able to get it. We are hoping that it will not rain too much more. There would not be many times that I would say that in the Australian parliament but, with 15 millimetres at my farm overnight, I am hoping the paddock will dry out. However, sitting on those harvesters does require a great deal of skill; you are not going to just put anyone on a $450,000 harvester. If it is a John Deere harvester, it is probably a $600,000 harvester, which is why I could never afford a John Deere. Increasing the age range to 35 brings more people into that labour catchment so that people can come in and contribute to our horticultural industry.

The Working Holiday Maker Reform Package is important. A harvest is getting close. I will concede that it has taken us too long, in my personal opinion, to find a landing on this bit of policy. However, I am pleased to hear that the shadow minister for agriculture has at least pointed out that this will be sorted out through the parliament and done and dusted with a satisfactory outcome before Christmas. But I would like to say to the shadow minister for agriculture: if you could, please ask your senators not to hold this up any longer than it needs to be because it is important that not only is it done and dusted by Christmas but that it is well communicated so that those backpackers continue to come.

I will add something else that I think is worthy of discussion and needs to be added to the Hansard around this issue. Backpackers are only a part of the labour force. With the great confidence and opportunity that have come through the free trade agreements, we are seeing additional plantings going on right across my patch. Just think, if everyone expands by an additional 10 per cent then that is going to put pressure on the labour market. We have older Australians, we have unemployed Australians living in my patch. I think one of the things that inhibits them from becoming involved in very short seasonal work is the impact it might have on the benefits that they are receiving. If they work in a full-time capacity for eight weeks, which might only be the time that the season runs for, they would lose their unemployment benefits or lose their pension benefits. I think there would be value in allowing, for that eight weeks of intense seasonal work, the money they earn to be averaged over a 12-month period so that it does not impact upon their benefits.

The long-term argument for this would be that it would get them involved in the workforce, even if it is short-term. They would get all the benefits, the health benefits as well as the stimulation and personal satisfaction, from being in work and it would assist them to essentially move into the workforce full-time. I think we need to be quite open to the idea of seasonal work for people who are receiving benefits as another means to complement the workforce within our horticultural industry.

The backpacker tax, I hope, at 32 per cent is dead and buried. I think the Working Holiday Reform Package that we have got here is a satisfactory outcome. This really is about securing three things—water, infrastructure and labour force—so that we can capitalise on the great achievements of this government, which are the free trade agreements with China, Japan and Korea. Ultimately, in doing that, we will grow wealth and create more opportunities for every Australian.

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