Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Hansard source

I thank the Prime Minister for the opportunity to respond. Those opposite have asked about the backpacker tax and what is important to understand, as I was referring to in my earlier response in the House, is why the rate is at 32½c. I go back to the 2012-13 budget that was delivered by the member for Lilley. In that budget it refers to the fact that the then Labor government will adjust the personal income tax rates and thresholds that apply to nonresidents' Australian income. From 1 July 2012, the first two marginal tax rate thresholds will be merged into a single threshold. The marginal rate for this threshold will align with the second marginal tax rate for residents—that is, 32½ per cent. That is what it said in the 2012-13 budget. And what the government had sought to do—given that case law had demonstrated that backpackers were nonresidents for tax purposes, which is the standing arrangement under the case law now—is that the 32½ per cent rate, set by the member for Lilley under the Labor government, is the rate of tax that they will pay.

Dr Chalmers interjecting—

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