Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

I rise today to talk about the backpackers taxation issue that is sweeping across the country, which comes into effect on 1 July 2016. In particular, I would like to stress the importance of backpackers right across Australia. I was rather surprised that most rural areas, and to a certain extent city and metropolitan areas, do rely a lot on backpackers and their seasonal work as it becomes available—and weekend work; it is across the board. But I do welcome the change of government heart and the cooperation between different sectors of our community to talk about the issue. The changes were made for very good reasons. We all know that these people who come in on backpacker visas or tourism visas—anyone who comes to Australia—like Australians, are asked to pay for the roads they use and the hospitals that are there for their convenience if they get sick or injured. So it is a compromise of government and industry to come up with a formula that will suit all sectors of our community.

Without backpackers and their labour, we would see a lot of issues come to the fore. Maybe because of the Australian dollar having weakened over the last couple of years, we have seen a fall-off in backpacker trade, from some 240,000 a year back to 200,000, or about a 16 per cent drop. This is an issue. Our farmers who have grown all sorts of crops do rely heavily on manual labour. Sometimes it could even be tractor driving, the harvesting of wheat, the harvesting of cotton. They do take some training; our farmers tell us that they come onto the farm with very little experience. They probably take about one month to get trained in how to drive a tractor properly, even in how to drive a farm ute. But after that initial investment in farmers' time and energy in training these people they become very good employees for the short time they are with the farm. It is well worth investing that time and money into the development of those backpacker skills.

What will we do without them? I am talking about the new tax regime that comes in on 1 July 2016, where they will be taxed 32.5 per cent of their wages.

We think a compromise of maybe 15 to 20 per cent tax would be an ideal situation. We also need to look at the superannuation of these backpackers: they can only collect what their employer puts into their superannuation fund just before they leave Australia. So the money they get from superannuation from their employer would not be spent in Australia; it is only when they leave Australia that they can spend that money. It will probably go countries like Bali, or wherever they continue their world journey. It is an issue that we must confront.

There are other countries in the world that rely on backpacker employment: Canada, United States, Argentina and New Zealand are just a few of the countries that do rely a lot on backpackers. Backpackers are also great for our tourism industry. When they finish a hard day's work in the field they are only too happy to sit around in their nationality groups or the new groups and enjoy a cold beer. And they do work hard—there is no doubt about that. When they work on a quota system, they do perform very well. With that, I congratulate the parties for getting together. (Time expired)