Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I seek leave to move the following motion:

That so much of the standing orders be suspended as would prevent the Member for Grayndler from moving immediately—That:

(1) government business order of the day No. 2, Passenger Movement Charge Amendment Bill (No. 2) 2016 be discharged; and

(2) the reintroduction of a bill relating to the Passenger Movement Charge not be permitted unless it does not contravene well established Parliamentary practice by purporting to bind future Parliaments.

Leave not granted.

I move:

That so much of the standing orders be suspended as would prevent the Member for Grayndler from moving immediately—That:

(1) government business order of the day No. 2, Passenger Movement Charge Amendment Bill (No. 2) 2016 be discharged; and

(2) the reintroduction of a bill relating to the Passenger Movement Charge not be permitted unless it does not contravene well established Parliamentary practice by purporting to bind future Parliaments.

Mr Speaker, the motion that I am seeking to suspend standing orders in order to move here today is consistent with your statement to the House earlier this morning, where you pointed out the fact that it is within the parameters of this parliament to make laws at any time. Indeed, the passenger movement charge increase of $5 that is provided for by the bill that is before the House does just that. Given the fact that the government itself promised, prior to the 2 July election, that there would be no increase in the passenger movement charge, it is, frankly, absurd that this parliament would consider legislation that purports to bind not just this parliament but the next parliament as well, for the next five years, to not have an increase in the passenger movement charge.

The fact is this: an increase in the passenger movement charge bears no relation to the issue of the appropriate level of taxation for backpackers who work in Australia. That is why, earlier today, we moved to separate the bills. It is also the case that the increase in the passenger movement charge was not part of the original package that was part of the May 2015 budget. Over 16 months later, in September 2016, the government announced further changes to the package and randomly added this $5 increase to the passenger movement charge to fund other, unrelated policy decisions. The increase in the passenger movement charge was done without any consultation with the sectors affected, including airlines, cruise ship companies, tourism operators and peak tourism organisations.

This legislation that is before the parliament today not only seeks to break the promise that was made just months ago, prior to the July election; it also seeks to bind governments, not just up until the next election but during the next term. The sole reason for that happening is that last Thursday—the government having lost the vote on the passenger movement charge increase in the Senate last Wednesday night—when the One Nation senators walked onto the floor of the Senate, they were handed an amendment which was written for them by the government in their name, and they were told that they could move that amendment to the legislation that was before the Senate last Thursday. They then received advice from the clerks, who were also caught on the hop in the Senate with this last-minute, policy-on-the-run proposition. The clerks ruled that it could not be moved in the Senate. Then the legislation came across here. The government were in a farcical position whereby they only had the numbers for a majority for the passenger movement charge increase by, essentially, telling the senators a falsehood—that somehow they could make a decision today that would bind the next budget, the one after that, the one after that, the one after that and the one after that, regardless of who was in government.

I accept the explanation that Senator Hanson of One Nation gave before the Senate last Thursday in response to Senator Wong, where said that she was inexperienced. She was indeed. But once bitten, twice shy with this mob, because they got them to vote for a breaking of a promise, and they broke the promise to those crossbench senators on the very same day. We then had a farcical situation whereby they came in here and moved legislation, with not just the passenger movement charge but the supposed five-year freeze in it. That is why standing orders should be suspended, Mr Speaker, because, as you pointed out earlier today, it is simply not possible for this parliament to bind future parliaments. Any future increase in the passenger movement charge will occur exactly the way that this one is—a government coming in here, having the numbers in the House of Representatives and then trying to secure the numbers in the Senate.

The policy just did not exist until the 2 July election. It existed beyond that because, after this election, unlike the one before, the government actually appointed a tourism minister. The tourism minister actually got a dixer in one of the first weeks of sitting. The member for Moncrieff, Mr Ciobo, the Minister for Trade, Tourism and Investment, rose in the parliament and said that increases in the passenger movement charge would choke 'the golden goose that is Australia's tourism industry'. That is what he had to say—not in the distant past but right here in this parliament, in this chamber. Then the government have the hide to move legislation that allegedly binds future governments. It is an absolute absurdity.

The government, having not consulted on the passenger movement charge before it was introduced; having promised to not do it; having reaffirmed that on the floor of the House of Representatives, saying it was bad policy, in the first and only dixer taken on tourism since they came to office in 2013; having lost the vote in the Senate last Wednesday night; and having recommitted the vote on the Thursday morning on the basis of a falsehood told to the crossbenchers, then came in here this week, yesterday, and moved this legislation, trying to ram through the parliament changes to the passenger movement charge, with a nonsense alleged five-year freeze.

That is why standing orders should be suspended and why we should, frankly, decline to give this bill a second reading. We should decline to consider this bill. It should be discharged by resolution of this House and it should be discharged until such time as the government can actually put up legislation that it itself is not laughing at behind closed doors, that it itself is not running around going: 'We conned those crossbench senators. We were short votes in the Senate. We lost the vote on the Wednesday night but put it forward and we conned them by telling them that it was a good idea.' But this follows of course the absurdity of the backpacker tax, which followed the same thing: not thought out, no economic modelling, no consultation, a shemozzle and a change—32.5 down to 19 down to 15. Who knows where the government will actually end up on this position.

It was careless of some of the crossbench senators to trust those opposite. But I do say this, having some experience at running a minority parliament: you can only lie to people once. You can only do it once. And that is why, when you are dealing with people who are crossbenchers, you have to treat them with respect and treat them with the dignity they deserve as elected members of parliament. What this legislation purports to do is, quite frankly, absurd.

What is very clear from this government is it is incapable of running this parliament. And if you cannot run the parliament, you cannot run the country. With the backpacker tax fiasco and the passenger movement charge fiasco, they have shown that they are incapable of running the country. Here we have tourism, an industry that employs more than one million Australians, an industry that contributes $107 billion to the economy, an industry where every dollar spent on tourism generates another 92c in other parts of the economy and an industry that deserves support not this attack with no notice and no consultation that we have seen from the government. That is why standing orders should be suspended and that is why we should discharge this legislation.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

I second the motion. I rise to support the resolution put forward by the member for Grayndler not only for all of the reasons he has put so well but also on behalf of the tourism sector and of coarse on behalf of the many members on our side who were denied the opportunity to make a contribution to the bill relating to the backpacker tax—the member for Paterson; the member for Solomon; all our Tasmanian members, the members for Lyons, Braddon and Bass. Regional members right across this country were eager to make representations on behalf of their constituents, their growers and their farmers in their communities but were denied the opportunity to do so notwithstanding of course the fact that we could not have a Senate inquiry into a bill containing not one but three tax measures because it was so urgent. Yet here we are this evening denying local members the opportunity to speak on behalf of their growers and their farmers because suddenly this is such an urgent rush for this government. Why is this such an urgent rush for this government now, both the bill currently being debated and the one before it? Because this government has made such a mess of this process over the course of the last 18 months. This is a process that began during the May 2015 budget. We were told during the election campaign that the government would backflip on the backpacker tax measure, only to finally get an idea of the government's final position—we thought then it was the final position—of 19 per cent throughout the course of October. So any delay in these bills is entirely a matter for the government and falls entirely in the responsibility of this government.

The tourism sector just like the agriculture sector is angry. This is not the way you do policy. You do not do policy by deciding how much money you want to raise over four years and then build a policy around it. It is extraordinary that when the government had their first back down to 19 per cent that, rather than give up the revenue, they insisted on making it a budget-neutral decision by working the tourism sector with an increase in the passenger movement charge notwithstanding the fact that they had made it clear to all and sundry that they would not do so—a rolled gold pre-election promise that they would not do so.

But to make it worse, they decided that they would rape and pillage the superannuation accounts of international backpackers. This is the most extraordinary piece of public policy I think I have seen in this place. So, in future, farmers and tourism operators will have a tax on them. Small businesses will pay nine per cent into the accounts of backpackers as a superannuation payment, and the Treasurer, sitting opposite, will immediately take 95 per cent of that back. Backpackers in the past have not been real flash in claiming their superannuation when they go home so now it is only five per cent to be claimed, I can assure you that almost 100 per cent of backpackers will not be bothering in the future. That is an extraordinary piece of public policy when you think about it—make the employer pay and then tax it at 95 per cent.

Mr Morrison interjecting—

The Treasurer is right: I am speaking about the need to suspend standing orders and all the reasons this resolution should be supported by this House.

This government has been accused of many things. It has been accused of dysfunction, it has been accused of chaos, it has been accused quite rightly just now by the member for Grayndler of being unable to operate this place, unable to operate this chamber and indeed the other place. But what really concerns me more than anything is the way the conventions of this place are coming under attack. All those decades of convention and protocols in this place that this government is just throwing out the window. And of course what also concerns me is the sheer lack of integrity of this government. We see it with respect to Senator Brandis. We see it through the sacking of the respected departmental secretary; Dr Paul Grimes. We see it with the relocation of the APVMA. We see it in the way government members absolutely spin their intentions, with respect to both the backpacker tax and the passenger movement charge.

I say this is a government entirely without integrity. This is a government holding all the wrong priorities, putting their own interests in things like the ABCC—which is flawed legislation—and taking money off people like tourism operators and, worse, in my case, struggling farmers, to force their legislation through the Senate.

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

Standing orders should not be suspended because the opposition is just simply seeking, once again, to try and delay and frustrate and wreck. The government is getting on with delivering our program, some $21 billion and more, including the measure that was just passed by the House, in relation to the 15 per cent backpacker tax—now on its way to the Senate—which ensures that the government has legislated more than $21 billion worth of budget improvement measures since the last election.

Those opposite continue their seek-and-destroy mission on the budgets, constantly trying to frustrate the efforts the government is making to consolidate the budget to ensure we protect our AAA credit rating. Those opposite vote against these measures. Those opposite seek to delay and frustrate these measures. Those opposite actively seek, in their calls for chaos, to deny Australia the opportunity to protect its AAA credit rating. That is why standing orders should not be suspended. This is another attempt from the opposition to undermine Australia's strong position in advocating and making the case for why we should retain that rating. And we have a strong case for that because $21 billion and more have been passed in budget improvement measures since the last election. We want to keep getting on with that job and that is why we do not think things should be delayed here.

The only reason I can think of, as to why Labor would not want to commit to not increasing the passenger movement charge over the next five years, is that if they were to win the next election they might want to increase it again. It is true that there are precedents for the types of bills that are the subject of this debate, in relation to the passenger movement charge. It is a valid measure seeking to ensure that the rate of the passenger movement charge is not increased for five years from 1 July 2017.

Previous parliaments have validly considered and passed bills that contain restrictions seeking to bind future governments. One example is subsection (3) clause (2) of the Flags Act 1953—well-known, I am sure, to the member for Grayndler—which provides that the Australian national flag is not to be changed. Something I heartily agree with. It says:

(a) a new flag or flags, and the flag referred to in subsection (1), are submitted in each State and Territory to the electors qualified to vote for the election of members of the House of Representatives; and

(b) the new flag, or one of the new flags, is chosen by a majority of all the electors voting.

That is just one example of the type of a bill that would seek to bind a future parliament. But if those opposite—God forbid—are elected at the next election and want to rush into this parliament and up the passenger movement charge, that would be a matter for them. And they would have form because, when they were last in government, they increased the passenger movement charge from $38 to $55—they increased it by 48 per cent.

This is a modest change since 2012 of just $5, which takes into account the movement in indexation on inflation over that period. But the other thing it takes into account is not once, over the course that we have been in government, have we gone to the passenger movement charge to fund the very significant works that we have done to improve border management and national security, which is benefited and funded by these types of measures. We have, since the 2015-16 budget, provided $26.6 million to establish the permanent border-clearance services at Townsville and Sunshine Coast airports to support regular international services and $93.7 million for the Seamless Traveller initiative, which includes rollout of automatic biometric processing at major air and sea ports. Since 2012-13 there has been an increase in funding provided to the Department of Immigration and Border Protection due to an increase in international passengers being declared.

Mr Albanese interjecting—

And as the member opposite interjects, I think, seeking to be helpful—which would be a record in this place—

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Always!

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

The reason that these measures should not be delayed, by the sort of antics we are seeing from the opposition, is that the government has been delivering in all of these areas and should not be further frustrated by pursuing the measures that we are putting before this parliament. In addition to all of that, the streamlined SmartGate traveller processing trials have been put in place for visitors from Hong Kong and China, during 2016, and we have had $719 million provided to the Australian Border Force over six years, including $438.7 million in capital funding. Enhancements to the Australian border protection services commenced in 2014-15, including through improved trade and passenger facilitation, better targeting and interception of illegal trade and travellers through enhanced information communications technology systems and intelligence and enforcement capability, and in strengthening the integrity and capability of the Border Force.

Those opposite, when they were in government, jacked up the passenger movement charge from $37 to $55, and they ripped money out of the Australian Customs and Border Protection Service. We held it constant, since 2012. After we came to government in 2013—there had been no change since 2012—we kept it in that place. We invested back in border protection; we invested back in the services that were being provided at our border to make things more secure. In addition to that, we supported the tourism industry, most recently, through the changes that stemmed from the Financial System Inquiry, where we have abolished, outlawed, excessive surcharging on credit and debit cards.

If you come in at an airport and get into a cab or if you go to a hotel, a concert or anywhere you pay with your credit card, you would have saved many times over what this increase in the passenger movement charge would be imposing on any traveller to Australia. So travellers coming to Australia are already miles ahead when it comes to a decrease in the cost of them moving around the country, enjoying this wonderful country, because the government was actually delivering. We have made one change, and that is to increase the passenger movement charge by $5. For what reason?

Because we gave a commitment at the last election that we would resolve the backpacker tax arrangements by the end of this year and we would do it by ensuring there would be no net cost to the budget. We made that commitment before the election, but we were not the only ones. Those opposite made exactly the same commitment. They said they would deal with this matter without a cost to the budget. So what the government did is we went down the pass and we presented a compromise package which ensured including the passenger movement charge and the superannuation measure that I note the shadow minister previously made reference to.

On the superannuation measure, what he is suggesting is that the superannuation payments to foreign workers should be abolished. Not only do those opposite think foreign workers should pay a lower rate of tax; they also believe they should cost less than Australian workers for those who are employing them. If you do not, as those opposite suggest, actually tax the superannuation and you rid that impost on the employer, then the employer has an incentive to actually employ foreign workers. The united federation of foreign workers union representatives that sit opposite are committed to lower pay for foreign workers over Australian workers and to lower taxes compared to Australian workers.

Australian workers pay on average in their wages some 23.8 per cent. That is what the average full-time wage earner in Australia pays across their entire income—23.8 per cent. What those opposite are saying is that the average tax paid by a foreign worker should be 10.5 per cent. But if you are Australian and you live here all year and you pay taxes all year, you are going to pay 23.8 per cent, and the foreign workers might be here for just six months. Let's give the foreign workers a break, shall we, and make sure that not only do they pay less tax but also the employers pay them less! That is what those opposite are proposing to do with these measures.

What we are seeing from the opposition is more frustration and delay. I think the Leader of the Opposition would be very pleased about that because then the member for Grayndler will be very occupied when it comes to these matters. Once these matters are dealt with, the member for Grayndler will have a bit of time on his hands and he can get back to his other job which involves unsettling and disrupting and removing the Leader of the Opposition.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The question is that the motion moved by the member for Grayndler be agreed to.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I move:

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

  'the House:

  (1)   declines to give the bill a second reading as the existence of this Bill is policy-on-the-run in that:

     (a) an increase in the Passenger Movement Charge bears no relation to the issue of the appropriate level of taxation for backpackers who work in Australia;

     (b) an increase in the Passenger Movement Charge was not part of the original package in the May 2015 Budget;

     (c) over sixteen months later, in September 2016, the Government announced further changes to the package and randomly added a $5 increase to the Passenger Movement Charge to fund other unrelated policy decisions;

     (d) the increase in the Passenger Movement Charge was done without any consultation with the sectors affected – including airlines, cruise ship companies, tourism operators, and tourism peak organisations.

  (e) the Treasurer indicated in a media conference on November 8 that he would simply seek to double the $5 increase to $10 if other unrelated elements of the package failed; and

     (f) the increase in the Passenger Movement Charge has real consequences for tourism and will have jobs impacts in the tourism industry, which employs a million Australians, is Australia's largest services export and has been nominated as one of Australia's five super growth sectors; and

  (2)   notes further that the handling of the Passenger Movement in the Parliament has been chaotic in that:

     (a) no modelling of the economic and jobs impact of this measure accompanies the Bill before the Parliament;

     (b) this increase breaks an election commitment from the Government not to increase the Charge;

     (c) this Bill directly contradicts the statement of the Minister for Tourism, who told the Parliament on August 31 that previous increases in the Passenger Movement Charge would choke "the golden goose that is Australia's tourism industry";

     (d) the increase failed in the Senate last week after the Government sought to bring it on for a vote; and

     (e) the five-year freeze would extend beyond the life of this Parliament, and is a meaningless statement designed to secure support for this flawed legislation'.

Speaking to the amendment briefly, it is very clear that this is a clear breach of a commitment by the government. We know now that there is absolutely no possibility of this parliament binding future parliaments for five years and that that is simply a con in order to secure the support of the Senate crossbench.

Importantly, the tourism sector have been treated with contempt. They were treated with contempt when the government failed to nominate a tourism minister after the 2013 election. They were treated with contempt when the people in Senate estimates could not say where the tourism sector would be represented and by which department. They were treated with contempt by the failure of the government to produce a tourism policy at the last election. They were treated with contempt when the government then failed to consult with them before this increase of $5 in the passenger movement charge. They were treated with contempt when the Treasurer threatened to double the increase over unrelated measures, in a fit of pique for which this Treasurer is becoming known.

The fact is that tourism is a vital sector for Australia. The truth is that it cannot continue to be treated by this government like a cash cow. The passenger movement charge was originally introduced to pay for customs services and, essentially, a user-pays model for services provided by the Australian government. That has long since gone. The passenger movement charge delivers more than $1 billion, most of which goes straight into consolidated revenue, as will this increase go straight into consolidated revenue. At a time when the tourism sector employs many people, particularly in regional Australia, it has been hit with a double whammy of the backpacker tax and this increase. That is why I am moving this amendment. I commend the amendment to the House. This increase should not go forward. Labor are being consistent with the policy approach that we had at the election and consistent with the approach taken by people such as the member for Solomon, who will second this amendment. He campaigned on this issue, as did the member for Lyons, the member for Paterson and the member for Brand, who will also have the opportunity to make contributions to this debate.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I second the amendment. I just had the experience of sitting through the Treasurer of Australia continue to spout the mistruths and obfuscation that we have seen with this issue in recent months, and it has just got crazy this last couple of weeks. Those opposite have not known what they are supporting or why and they are not sure who they stand for, but what we have seen is that they have not stood for small and medium businesses in this country. They have not stood for the tourism businesses that are hurting and they have not stood for the agricultural industry and horticultural businesses like the mango growers and other growers in my electorate. I was concerned that the voices from my electorate would not have the opportunity to be heard in this place, and I thank the member for Grayndler and others who have worked to make sure that the voices from our extremely disappointed industries are heard.

The problem with the Treasurer—and we see this in question time—is that he thinks that the louder he speaks, the more convincing he is or the more powerful an argument he has or the better he will be able to convince us that he knows what he is doing. Unfortunately for us, because he is the Treasurer of Australia, it is becoming more and more apparent that he does not know what he is doing. He starts yelling louder and louder during question time, when he should be explaining to us the economic vision for our country but instead is spreading mistruths, and I think that is an absolute shame. He continued the job of Joe Hockey, who 18 months ago announced that anyone working on holiday in Australia will pay tax from the first dollar they earn. We have no problem with that, except that the government wanted to impose a tax rate of 32.5 per cent. We did not hear too much from some industry bodies, unfortunately, like the National Farmers Federation, but other industry bodies were screaming—and why were they screaming? They were screaming because a major source of their labour was going to be decimated and slashed.

The effect of that can be seen if you go out onto the ground and talk to people who run small and medium tourism and horticultural businesses. People who are working the land and want to double the size of their farm have said to me, 'Luke, why would I double the size of my farm when I haven't got the labour to pick these kilometres and kilometres of fruit that is rotting on the ground?' We did some sums and we think that, conservatively, the mango industry alone in the Top End is down $70 million as a result of not having enough labour to pick the fruit. Backpacker numbers are down 30 per cent in the Top End—30. You guys purport to be the supporters of small business and medium business and yet you have cut the labour from underneath them and they are suffering. There are small tourism businesses in the Top End that are really hurting because we have had this 30 per cent drop in backpackers, who once used their services. It has been really disappointing. As a new member to this place, I have seen the way that the government have flip-flopped, going from 32 per cent to 19 per cent and down to 15 per cent—we would like them to go to 10.5—and they did it all with no modelling, none, let alone the lack of consultation that was there for everyone to see. I have farmers, growers and the tourism industry saying, 'Luke, what are they doing? Don't they want us to succeed? Don't they want to grow the north or Tassie?' Regional Australia is really hurting as a result of this backpacker tax fiasco. Of course 15 is better than 19, but it could have been better. We could have been more competitive, and that is a shame.

I want to finish by saying something on behalf of constituents of mine, Leo and Steve Skliros, who run a big mango farm. They said, 'Look, we need long-term solutions. We've got millions of dollars worth of mangoes going to waste. We've got people who want our product overseas. We don't know why the government is not supporting us.' I will continue to fight for the small and medium businesses in my electorate and hope that the government lifts its act.

Meryl Swanson (Paterson, Australian Labor Party) Share this | Link to this | Hansard source

This so-called backpacker tax has been a joke from the start; however, the punchline is not funny for two of our most important industries: agriculture and tourism. The government has mismanaged this issue from the outset and no doubt it has been costly—costly to regional communities, costly to communities that rely on tourism, costly to communities that rely on agriculture and costly to communities like my own in the electorate of Paterson, which has the triple whammy of being a regional community that relies on tourism and agriculture.

My electorate of Paterson straddles the beautiful Hunter Valley, with its vineyards and restaurants and blue-water wonderland of Port Stephens with dolphins and whales. Both of these areas are reliant on tourism but also on agriculture. The alluvial plains of the Hunter Valley are the food bowl for the region and beyond. Our vineyards produce world-famous wine. Both of these areas rely on agriculture and tourism, and both of those industries rely on backpackers.

We are sending the wrong message to overseas backpackers with this tax—that these regions, these industries and this country does not welcome overseas backpackers. I would like to share some views on this subject that were reported in the Newcastle Herald in May this year. In a report on the backpacker tax, the chairman of Tourism Hunter, Will Creedon, who owns renowned restaurants in Newcastle and the Hunter, described the backpacker tax as 'poor policy'. This is the chairman of Tourism Hunter. Mr Creedon said:

It could have been thought out better and I hope it's reversed.

This was after the government had decided, just before the election, to delay the 32.5 per cent tax that would have come in on 1 July for six months pending a review. In that Newcastle Herald report of May this year, Mr Creedon said that backpackers brought a refreshing work ethic to the region, and that taxes that made working holidays in Australia less viable would be detrimental to local hospitality. He said:

They bring a new level of customer service.

And:

We are very dependent on them, and it flies below the radar. We need them here to raise the bar.

That Newcastle Herald story also quoted 21-year-old German backpacker Angelina Heck, who has worked in a Newcastle West bar and restaurant for about three years. She was hoping to transition to a study visa, but she said in that story that the proposed new tax had brought forward her plans to return to her native Germany. She said:

It's already hard enough for international people to come to Australia and work.

And she said:

I decided to leave because my visa runs out and with these laws coming in July, it wasn't going to be worth it.

Ms Beck said she believed backpackers had made a contribution to local businesses. That is one business owner and community leader and one backpacker, but the message is the same across the country: Australia relies on backpackers, and backpackers want to come to Australia and work but they find it hard enough already.

I had attempted to speak on this tax in October but the government shut down the debate, just like they have shut it down today. They cannot shut down the voices of our agricultural and tourism businesses that rely on this input. First, there was the backflip from 32.5 to 19 per cent. Now, to appease the Nationals and cosy up to One Nation, they have done a further backflip to 15. Labor has agreed to 10.5. I urge the government to really think about what they are doing to these important sectors. Both industries need certainty, but the tourism gets hit twice because it will also be hit with the increased passenger movement charge that happened in exactly the same way as the backpacker tax—no modelling and no proper consultation. It is policy on the run, which is what we continually seem to see from a government that is clearly on the run.

The idea that you can have a five-year freeze on the passenger movement charge is absurd. How can you bind a government through legislation for the next budget let alone the next parliament? Of course, you cannot. The freeze is just a con by this government. It is a con to convince a group of senators to support their position—a position based on no modelling and, again, no consultation. We know that when the tax was proposed to be 32.5 per cent the backpacker numbers dropped off. The member for Solomon has just given us a very live example of that. We know that when the government backflipped to 19, backpacker numbers kept dropping off. How can we know whether this second backflip will do anything to halt that decline? I cannot see why it would.

When European backpackers look Down Under they look at Australia and they look at New Zealand. What do they see? Two beautiful nations, full of adventure, the chance to work while they party and the chance to pocket a bit of money to further fund their travels. One of those beautiful nations, New Zealand, is taxing them at 10 per cent. The other is Australia that wants to tax them at 15. Which would you choose? 15 or 10? Australia, at 10.5, looks just as appealing as New Zealand at 10, but add another five to that figure and the gloss wears off. If Labor could, we would have no backpacker tax at all, but we understand that sometimes you need a compromise, so we have compromised. We have compromised to 10.5, not 15. It does not even require a backflip for the government to agree to 10.5, merely a hop, skip and a jump, but they will not do that.

Labor will not support this 15 per cent tax. We will stand by our farmers. We will stand by our tourism operators. Labor will stand by our rural and regional communities—far better than this government and the Nationals ever will. Thank you.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

When this entire package was introduced to the House 18 months ago I was willing to give those opposite the benefit of the doubt. A 32.5 per cent backpacker tax came like a bolt out of the blue to most of us in this House. I was not here then, but I thought that maybe the Nationals and those regional Liberals would do the right thing and see this knocked on the head.

They went to the election promising they would take another look at it. What did we see 18 months later, dragged kicking and screaming to a resolution? The Treasurer, who just wants to pocket the money, who said: 'No. You have to make sure that money stays there. I want the lot. I am not willing to negotiate on anything.' So they came up with this brilliant plan to change the 32.5 per cent to 19 per cent, take away nine per cent super and add five dollars to the passenger movement charge.

Why is this going up? Because this government was dragged kicking and screaming to a resolution. It has been an absolute debacle. They have gone from 19 per cent to 15 per cent. But why 15 per cent? Nobody knows. Where did this figure come from? Where is the evidence?

What we are going to be faced with in this country, and what we are facing now—that is what the farmers in my electorate are telling me—are backpackers not coming to this country. Even before the tax goes in, people are already not coming. They are already changing their plans. They are already deciding they are not going to work on our farms because they have been scared off by this high tax.

This is a mess of the government's own making. As I say, 18 months ago I would have given the Nationals and regional Liberals the benefit of the doubt that maybe they would convince their city colleagues to do the right thing. But I have been sorely disappointed. The Nationals are sitting their mute. They will cross the floor in the Senate over the Adler shotgun. They will make every noise under the sun over 18C so that people can make racist comments. But they will not stand up for farmers and regional communities when it counts.

They will not stand up for jobs. They will not stand up for small businesses in the regions—people who rely on the wages of backpackers when they come through. We need to remember this: backpackers spend nearly all of the money that they earn in regional communities. Are we really willing to forgo that? If they are not coming to Australia, they are not paying tax and they are not spending their money here.

I will now come to the departure tax, the $5 increase—a bigger tax on the way out. Thanks for coming. Here is a bigger tax on the way out. Plus, by the way, we are also taking 95 per cent of your super. Thanks for visiting. Make sure you tell your friends and family what a great time you have had in Australia. What a winning tourism strategy from the so-called party of business! It is absolutely ridiculous. But this was never about regional communities. This was never about getting people onto farms. This was always about a political fix for this government. It saw the bad headlines in the papers, and that is what dragged it into action. It is not about fixing the problem. It is just a political fix.

Tourism bodies know that this departure tax will hurt. Groups in my electorate in Lyons and across Tasmania are saying that this sends the wrong signals. A $5 charge on top of what is already there sends the wrong signals. Tasmania is going through a tourism boom at the moment. It is fantastic. We are full of people. But, if this comes in, what signal does that send? As the member for Paterson quite rightly said, add that to a bigger backpacker tax, and where are people going to go? Are they going to go somewhere where they offer 10 per cent or 15 per cent? We know the answer to that.

There is a lot to say on this issue. I was gagged from my 15 minutes of fame to speak on behalf of my community. I feel so passionately about this. I am so angry about this decision. But I will give other speakers the opportunity to have their say.

Madeleine King (Brand, Australian Labor Party) Share this | Link to this | Hansard source

Firstly, I would like to pass on my thanks to my colleagues in this place who have agreed to make shorter statements to the House so that more of us could speak on this important matter, the passenger movement charge amendment bill. I also want to speak about and point out the disgraceful lack of governance and process that we are seeing here today—not just today; it has been going on for months, both since the Abbott government first came into power but also since we came back to this place as recently as August. But I want to turn to the backpacker tax itself.

Without any industry consultation or modelling, 16 months ago this government decided to whack a tax on backpackers in what was a disgraceful $540 million tax grab. It did so without considering the fact that the number of backpackers visiting Australia is already falling, and the tax would only make the matter worse. As the member for Solomon said, in the Top End the rates have gone down some 30 per cent in a great part of this country that has extraordinary development opportunities. It has many opportunities to grow. To have this workforce suddenly basically ripped out from the farmers in the area is nothing short of a national disgrace.

As we have heard, there has been no modelling done on this backpacker tax or where it might end. 'Where has evidence-based policy making gone?' I ask the members of the House. It just gets plucked out of nowhere, and here we are. In the 16 months since the 2015 budget we might have thought we could trust the government to have thought through the implications. But clearly that is not the case, and it is never going to be the case. It is a shambolic mess and it is shameful governance, and this country deserves better.

We have heard from many as to what working holiday-makers do when they come to Australia: they harvest crops; they pack fruit and vegetables; they work in processing animal products; they work in fishing and pearling industries; they tend plantations and forestry areas; they work in residential and non-residential building construction. In my electorate they work in the service industry and hospitality. They also work in the tourism industry—cafes and so forth—and even in the health industries. Many of them work in aged care. These are not all the areas. We know working holiday-makers work throughout our economy.

One of the main reasons we have seen the backpacker numbers fall is international competition. This is where the modelling problem comes in. We have our near neighbours, New Zealand—a beautiful country, as the members Paterson has pointed out—which has a 10 per cent rate for working holiday-makers. 'How are we meant to compete with that?' I ask my friends here today.

I will take a few moments to talk about the impact on Brand. Brand is a southern metropolitan area in the south-west of the Perth metropolitan area. It is not a regional area. It borders on a regional area. In my electorate on the Kwinana industrial strip stands the largest grain exporting and handling facility in the nation. From CBH's silos WA wheat farmers export their crops. Some of the best grain in the world goes direct to Indonesia. It feeds our near neighbours. They are operating in an increasingly competitive environment, and growers' ability to access markets decreases with every dollar added to cost. They also depend on backpackers in wheat silos across the state—people who come for seasonal work to lab test, to collect, to do all the testing that is required on the great grain crop of Western Australia.

Not only wheat farmers but all Australian agriculture must be able to compete on a level playing field with like countries such as, as I said, our near neighbours, New Zealand. We rely on the labour that is essential to seasonal work. What I can say about this government—and we have seen it consistently—is that it is consistently incompetent. It is a shame, with this being my first time in parliament, to have to witness it firsthand, but I am glad I am here to hold them accountable.

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

I would like to thank members who have contributed to this debate and thank the opposition for their cooperation in the management of the Passenger Movement Charge Amendment Bill (No. 2) 2016 through this House. As part of these reforms, the government has increased the passenger movement charge to $60 from 1 July 2017. This increase is the first increase since 2012 and is in line with changes in the consumer price index between this time and 2017. During the debate in the Senate on this measure, the government committed to not increase the $60 rate of the passenger movement charge for a minimum period of five years from 1 July 2017, and this bill gives effect to this commitment.

I note, on the amendment moved by the opposition, that they make a number of observations but, in particular, they draw attention to the lack of consultation in relation to the passenger movement charge. I simply draw their attention to the words of the former Minister for Tourism Martin Ferguson, who said:

If you actually have a look at the visitation to Australia over the last few years, there were a variety of increases to the passenger movement charge when I was the minister from December 2007 to 2013.

It was increased from $37.55, from memory. He said:

I can assure you there was little or no consultation—

In relation to those changes. That was the confession of the Labor minister for tourism on those matters. So I note the amendment moved by the opposition. It is what it is: another opportunity to play politics with this matter. This legislation needs to go through and be passed, and that will ensure certainty for the tourism industry and the agricultural sector. I commend the bill to the House.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Grayndler has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The question is that this bill be now read a second time.

Bill read a second time.