Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

I do understand that; I am just making some general points, Mr Speaker, and I do appreciate your indulgence to do that, because they are matters which have underlined this government's incompetence. We look forward to fully debating the passenger movement charge later in the day, or whenever it comes on for debate, as it should separately.

When it comes to economic incompetence, this takes the cake for this Treasurer. He could have fixed this months ago, and he should have fixed it months ago—not just for his sake and the parliament's sake but also for the sake of regional Australia. As the member for Hunter has pointed out, this uncertainty in and of itself has created major difficulties in regional Australia. When backpackers are looking at countries to go to to work and to holiday they look at the headlines and they see this headline about a backpacker tax in Australia. I imagine that backpackers sitting in the United Kingdom, Scandinavia or the United States are not reading the Hansard closely and they do not know that this debate is going on and there is a chance that the rate will be lower; they just know that the government wants to put a 32½ per cent tax and then a 19 per cent tax on their earnings. That makes Australia uncompetitive. When they are thinking about where to go, they will say, 'We can go to New Zealand and we can pay 10½ per cent there.' The government will say, 'But wage rates are lower in New Zealand.' The last time I checked, backpackers do not get out the enterprise agreements and the industrial instruments and compare them to the tax rates and make a detailed econometric calculation about the wage rates and the tax rates and how they interact; they look at the headline rates. As the government are fond of saying, if you want less of something then tax it more. Obviously the government want fewer backpackers coming to Australia. They want fewer backpackers working in fruit picking. They want fewer backpackers working in tourism. They want fewer backpackers spending that money in regional Australia. By their own equation, as they say so often, 'If you want less activity of something, then tax it more.' They want to tax backpackers more. The Treasurer likes to go on about Labor's tax policies. The Labor Party is proposing a lower tax rate than the government. He can engage in his flights of fancy about how that is unfair, but imposing an uncompetitive tax rate is unfair on Australia's horticulturalists, it is unfair on Australia's farmers and it is unfair on Australia's tourism operators—as they have pointed out so strongly and as Fiona Simson pointed out so strongly this morning.

It is unusual for the National Farmers Federation, I must say, to be so publicly critical of a Liberal-National government. They tend to be more in lock step than that, but the NFF have had a gutful of the government and their arrogant treatment of them. What is interesting to note is that the NFF were obviously told by the government, 'Don't worry. We're not going to buckle. We won't go under 19. You won't make fools of yourselves by saying, "Stick to 19." If you back 19, we'll stick to 19 and we'll get it through.' I think the NFF have seen the error of their ways in listening to anything this Treasurer or this Deputy Prime Minister tells them. This Deputy Prime Minister cannot be trusted by the NFF, just as he is not well regarded in regional Australia.

This will be another humiliation for this Treasurer and another humiliation for this Deputy Prime Minister, who have shown so comprehensively that they do not understand business and do not understand the operation of regional Australia. Accordingly, a second reading amendment has been circulated in my name. I hope the government supports that second reading amendment. I will be moving detailed amendments at the consideration in detail stage. I move:

That all the words after "That" be omitted with a view to substituting the following words:

"the House declines to give the bill a second reading as:

(1) after the introduction of the backpacker tax in 2015 there has been widespread damage and financial cost to the agriculture, hospitality and tourism sectors across regional Australia including Tasmania and Queensland;

(2) the package has been criticised by no less than 15 Coalition Members of Parliament;

(3) no consultation occurred with the agriculture sector before the tax was first introduced;

(4) the tax rate changed from 19 per cent to 15 per cent after the Treasurer was:

(a) pressured by the Labor Party's strong position in favour of a 10.5 per cent tax rate;

(b) pressured by the revolt from the horticulture and tourism sectors; and

(c) rolled on economic policy by the crossbench;

(5) the tax rate change will cost $120 million despite the Minister for Finance saying that the Government had compromised "as far as we can sensibly compromise, given the Budget bottom line cannot afford a further tax cut beyond what it is that we have put on the table"; and

(6) the Government has not demonstrated how the 15 per cent figure will leave Australia more competitive compared to a rate of 10.5 per cent".

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