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

I understand it is the wish of the House to debate this order of the day concurrently with the Passenger Movement Charge Amendment Bill (No. 2) 2016.

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

That understanding of the will of the House may be the will of the House put forward by the Leader of the House, but it is not a unanimously held view of the House, and the view of the opposition is that these bills are separate and should be dealt with separately.

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

There is an objection so the bills will need to be dealt with separately.

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

Here we are again, and the rolling chaos goes on. The government is trying to fix their mess and they cannot even get the scheduling of the bills right. They tell the Speaker it is will of the House, and something happens that is not the will of the House. Normally, such things are done through consultation. There is not even a phone call to say that the bills should be dealt with separately or together because, of course, they should be dealt with separately.

I can understand the wish of the Leader of the House and ministers opposite to try and squirm through this issue as quickly as possible, to have as little debate on this as possible and not to have the focus of the House on their incompetence. I can understand their sensitivities, but it is not going to be that way. It is not going to be that way because regional Australia deserves better. Regional Australia deserves a proper discussion about these issues. Tourism deserves a proper discussion about these issues. It will not be that way, because what we are seeing here today is a humiliating backdown by an incompetent Treasurer on the run.

The working holiday-maker tax measure was first introduced in 2015. I do not hold the current Treasurer responsible for that; he was not the Treasurer. Indeed, it is open to him to throw Mr Hockey under the bus, as is apparently the current trend in the government. Their current favourite occupation is to say: 'Joe's in Washington. He can't defend himself. We we'll just blame him.' He could be doing that on the backpacker tax, except he has made it his own.

He has adopted it, he has run with it, he has embraced it, he has sold it right across Australia—he has not actually sold it right across Australia because he does not get out to regional Australia all that much. He has not been out to face the farmers and the growers and the tourism operators about this tax, but he has certainly adopted it as his own policy. He adopted it at 32½ per cent—apparently, it was a great rate. Then he adopted it at 19—that was a great rate. And now it is 15, he announced in a press conference on Monday—which was immature and petulant even for him, and that is a big call, I accept. But even for him, it was an immature and petulant press conference, at which he said, very unwillingly, that he would reduce the tax rate to 15 per cent. Of course he said, that he was the grown-up, mature person in the room; he could do this. Then he said, in the next breath, the Labor Party can go and jump in the lake, which is something that grown-up and mature people say all the time, telling their parliamentary colleagues to go jump in the lake. That was the official position of the Treasurer. Obviously, he is not interested in a proper and sensible discussion about these issues. Feeling hurt, feeling sensitive, displaying his well-known glass jaw, he just petulantly said: 'Well, 15 per cent, take it or leave it. I'm not entering into any discussions.' Well, it is not that simple either.

What the Treasurer did not do is outline how 15 per cent is a competitive rate, how 15 per cent compares with New Zealand's tax rate, whether 15 per cent has been modelled in terms of the impact on backpacker numbers to Australia. He did none of that because he could not because the work had not been done. We know this is the epitome of policy on the run. This is the prime example of policy on the run. How do we know that? We know that from the government because the Minister for Finance, the nation's second most senior economic minister, was on Insiders 24 hours beforehand saying: 'We will not move from 19 per cent; 19 per cent is set in stone. We can compromise no further.' That was the nation's second most senior economic minister 24 hours before, and then the Treasurer comes out and says, 'Well, no, actually we can compromise and we'll go to 15 per cent.' It is even worse than that. We know from Senator Hinch, who was at the little garden party down at the Lodge the night before, that the Treasurer himself told Senator Hinch that there would be no movement from the 19, 'No movement.' That was in the afternoon. I did not go; I am not sure what time it was, but I know it was in the afternoon–that little garden party down at the Lodge. So that was even less than 24 hours beforehand.

We have the Treasurer saying, 'We won't move from 19,' and we have the finance minister saying, 'We won't move from 19.' I wonder who decided to move from 19, Mr Speaker? Maybe it was the Prime Minister. Maybe it was the member for Dawson. Maybe it was Cory Bernardi. Who knows? It could have been anybody who decided to move from 19, but we know it was the Treasurer who was pushed out the door, by himself, no joint press conference with the Deputy Prime Minister, to say: 'We will now move to 15 per cent'—as if that would be all okay, there was nothing more to see here and now the world can move on.

This has been perhaps the best example out of many, many possible examples of this government's incompetence, their arrogance most particularly, and their lack of consultation. There was no consultation about 32½ per cent and there was no consultation about 19 per cent with the sector. Of course, what the government's position was when they announced 19 per cent was that the parliament should pass it immediately and to say: 'How dare you delay it for a Senate inquiry. How dare you send it off for further examination. You should pass this immediately.' That is what the Treasurer and the Deputy Prime Minister said to this side of the House and to the crossbench, that we should have no further discussion. We said: 'No, actually this might need a bit more discussion. This might need to go to a Senate inquiry,' and thank goodness we did. The Senate inquiry brought forward the evidence from the horticulture sector, in particular, but also tourism and agriculture that 19 per cent did not meet the concerns of the sector, that 19 per cent was regarded as a rate which would see fewer backpackers come to Australia and that 19 per cent was not sustainable. Again, no wonder the government did not want a Senate inquiry, no wonder the government did not want that further examination of their policy.

The fact of the matter is there is one reason the tax is not 19 per cent, one reason alone, and that reason is the Australian Labor Party, because the National Party and the Liberal Party wanted to vote for 19 per cent last week. All of them sitting over there on the other side, who will vote for 15 per cent today, voted for 19 per cent last week. That is what they voted for.

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

They didn't know they would get another chance.

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

They had the chance. We gave them the chance. We brought it on in the House and we said, 'You're prepared to stand up for shotguns, you're prepared to cross the floor so it is easier to import shotguns into Australia, why don't you cross the floor so it is easier for farmers and horticulturalists to get the workers they need to do their job?' But, no, they do not have the courage to do that. They did not have the courage to cross the floor. They voted for 19 per cent.

So when we say that it would have been 19 per cent if not for the actions of the Labor Party, those opposite have no defence because the Hansard does not lie, as the Deputy Prime Minister well knows—the Hansard does not lie. The Hansard will show all those members opposite saying they think the appropriate tax rate is 19 per cent. The Labor Party and the crossbench in this House and the crossbench in the Senate have delivered the result which means we have a tax rate lower than 19 per cent. Well, that is a start; that is a step. But it would have been better if the tax rate had been 10½ per cent. Why? Because it would make Australia competitive with New Zealand.

We suspect there will be continuing problems with a tax rate of 15 per cent and honourable members opposite will have to go and explain to their farmers and their tourism operators why they are insisting on a situation which makes it harder to attract backpackers to work in Australia. As we have said before, what honourable members opposite seem to fail to realise is it is not just about workers, important as that is. As the member for Bendigo well knows, when backpackers work in an area, they spend the money in the area; they are not great savers. Backpackers do not have a great reputation as frugal operators, as people who build their wealth; they spend their money. If they are working in Bendigo, they spend it in Bendigo. If they are working in Cairns, they spend it in Cairns. That was the feedback that was given to us as we engaged in our consultations around Australia—something that those opposite seem to fail to understand.

As I said before, the Liberal Party are meant to understand business, the National Party are meant to understand regional Australia and they have both shown through this farce that they understand neither. The Liberal Party do not understand business, certainly not tourism, hospitality, agriculture and horticulture; and the National Party are just out to lunch. On this issue, the National Party have been about as useful as an ashtray on a motorbike! They have sat and they have watched this Treasurer get it wrong time and time again. The member for Hunter, in terms of his responsibilities, has been consulting with the sector. He has been much more in touch with the concerns of horticulture and agriculture than has been the National Party and the Liberal Party on these issues.

We know that the National Party and the Liberal Party have engaged in a lack of consultation. We know that there was no consultation with the sector, certainly not on 32½ and not on 19 because the Deputy Prime Minister went out and said that he was outraged when we announced we were not voting for 19. He said, 'But it's part of a negotiated settlement.' The only trouble was nobody else was there, only the Treasurer and the Deputy Prime Minister negotiated this settlement. It is not one that the sector was consulted on; it was not one that the opposition was consulted on. We have shown that we are prepared to work with the government where sensible outcomes can be reached. We know that what we have has been a rolling farce.

I saw the president of the National Farmers Federation this morning—who, as the member for Hunter has made clear, has the support and respect of this side of the House—and she said, 'We were absolutely blindsided by an item in the budget that came in that we weren't consulted about that said that they were going to put the backpacker tax up to 32½ per cent from nought per cent.' And that is the point; it was from nothing. I have seen the Treasurer and the Minister for Finance trying to argue that it was actually a tax reduction from 32½ per cent down to 19 per cent, when in fact it was nought.

But that is not the limit on this government's dishonesty when it comes to the backpacker tax. The dishonesty has continued and it has been perpetrated by the Treasurer, who has argued—as has the Prime Minister—that the Labor Party's position is that backpackers should pay zero tax. The Prime Minister and the Treasurer keep saying that somehow or other the Labor Party's position is that backpackers should pay no tax. I understand that there can be argument about interpretation of what people say in this House. As you well know, Mr Speaker, I might put a certain connotation on what I say and honourable members opposite might try to put a different connotation on it—and that is all fair game. We all look at our respective comments and we all interpret them as we see fit, but what you cannot do is make it up.

When the government says that the Labor Party's position is a zero tax, it ignores the inconvenient little fact that our position is actually 10½ per cent. I know that 10½ per cent has a zero in it—I accept that there is a zero in the 10—but it does not mean zero. It is a figure greater than zero. It is less than 15 and less than 19 but it is greater than zero. We actually support a tax on backpackers, because the vast majority of backpackers do not pass the tax-free threshold and therefore pay no tax under current arrangements when they are working in Australia, and they should make a contribution. We accept that, but what we do not accept is that that contribution should be so high as to make it uncompetitive and so high as to make it harder for horticulturalists to get the workers that they need, which therefore has strong flow-through effects to regional areas.

The other great mistruth that the other side has sought to tell—and I am sure honourable members opposite will tell this mistruth in this debate until we all get gagged in this government's incompetence—is that somehow or other the Labor Party's position sees backpackers paying less tax than Australian workers, and that is just not true. Under these arrangements and under the Labor Party's amendments, backpackers pay tax on the first dollar earned and every dollar subsequent—the first dollar earned. That does not apply to Australian workers. Australian workers do not pay tax until they pass the tax-free threshold. So any comparisons there must take that into account. It is utterly inappropriate for the government to perpetrate this untruth that there is a level at which an Australian worker would pay more tax than a backpacker. That is just an untruth. The government should stop telling those untruths. They should accept their utter incompetence on this matter and they should accept the will of the Senate, which has been 10½ per cent.

We understand that they have done a deal with other crossbenchers to get it through at 15 per cent. Well, good luck to them. The Labor Party will stick to 10½ per cent, and the Labor Party will vote for 10½ per cent. And, at the appropriate time, I will move amendments to reflect that, just as I will be moving a second reading amendment—which I hope that the government can support, based on the precedent of government supporting second reading amendments condemning them, when they know, and they have to face the reality, that they have got it so wrong.

The Labor Party will continue our consistent approach on this. Those opposite have gone from 32½ per cent to 19 per cent to 15 per cent. We will continue to argue that the tax should be 10½ per cent. Presumably they will win. Presumably, they have their done their homework finally and they have the numbers—although, they did not, as we saw just a few minutes ago, when trying to get a cognate debate through with no consultation, against the precedent of normal consultation with the opposition. When they presumably win, what they will find is that they will continue to have to answer to regional Australia as to why it is harder for horticulture, agriculture and tourism to get the backpackers they need.

Mr Speaker, on slight indulgence, and I will not belabour the point because it is a separate bill, we have also seen the rolling farce of the passenger movement charge, which will come before the House separately. That has been equal in incompetence—without foreshadowing what the member for Grayndler says in response to the passenger movement charge. We saw the Minister for Trade at the despatch box just a few weeks ago saying that increases in the passenger movement charge strangle the goose that lays the golden egg for tourism and are inappropriate. Obviously, he was not in the loop. The Treasurer and the finance minister had not told him that they were about to increase the passenger movement charge—a departure tax which is already the highest in the world at $55 and moving to $60. That compares to $23 in the United States, $17 in China, $19 in Mexico and between $21 and $43 in the United Kingdom for short-haul travel. It is higher in the United Kingdom for long-haul travel—I do acknowledge that—but that does not mean that Australia's passenger movement charge at $60 is competitive.

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

I remind the member for McMahon that it is not a cognate debate.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to 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".

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

Is the amendment seconded?

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

It is indeed, and I reserve my right to speak.

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 McMahon has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

I could be unkind and say that is 20 minutes of my life I will never get back again. How far has the once proud Labor Party sunk? This is not the Labor Party of Hawke and Keating, who understood the national interest. This is the Labor Party of Bill Shorten, the member for Maribyrnong, who wants to find the quickest route to the Lodge and be buggered what he will do in the interim to the national interest. That is what this debate is about. The debate here is about the national interest. In particular, it is about hardworking Australian farmers—in my case in the electorate of Barker, whether they be in the Riverland, in the south-east, in the Mallee or in the Barossa. Hardworking Australian farmers have invested their hard-earned money and need the assistance of backpackers to do the heavy lifting at harvest time, during periods of peak labour demand.

I should say, and I hope it is not forgotten in this debate, that it is interesting that we are having a debate, effectively, about the rate of taxation for foreign workers when we have high levels of unemployment in this country. We need to always remember that we should be steering the ship of government, if you like, towards ensuring Australians find their way into employment. But, as I speak to my constituents, very many of them tell me that, unfortunately, many of these unemployed Australians do not want to do this work. I know lots about horticulture. My father was an onion farmer. I know this work is heavy, hard and dusty. My formative years were spent moving irrigation pipes around our property. The worst decision I ever made was to tell my father I could lift one, because he then put me to work fairly consistently doing more of that. Like I said, we are here to pursue the national interest and, sadly, the Labor Party has forgotten about that.

We heard from the member for McMahon that this measure does not have the support of the National Farmers Federation. That is not right—and the member for Hunter knows it. The NFF supported a 19 per cent rate, just like they now support the 15 per cent rate. We heard about uncertainty. Who is creating the uncertainty in this debate? This matter ought to have been resolved six months or more ago, but, instead of sitting down in a mature and constructive way to work with us, the member for Hunter and, presumably, his leader were working on ways to create division—not unity but division and uncertainty for people in my electorate. It is the kind of uncertainty that causes real economic harm. There has been a deal of misinformation in this campaign run by the Labor Party to try and paint a picture of dysfunction and chaos. The first bit of misinformation that I will correct is this: backpacker numbers have been in steep decline since 2012, long before there was a discussion about effective tax rates. If we are talking about misinformation, let's also talk about the misinformation circulating that somehow it was a coalition decision to arrive at a tax rate of 32½ per cent. Wrong. It was an application made by the Australian Taxation Office.

Ms Chesters interjecting—

If the member for Bendigo will listen, she will get the good oil. A decision was taken by the Australian Taxation Office to take three separate matters to the Administrative Appeals Tribunal. On each of those occasions, the Administrative Appeals Tribunal indicated that the backpacker here under a 417 visa was in fact a foreign worker and was subject to foreign workers tax at 32½ per cent. So this has not been a debate about the coalition wanting to set the rate at 32½ per cent; rather the coalition indicated that 32½ per cent is inappropriate. Members of the backbench and the executive, guided through work of the backbench agriculture committee, supported a lower rate of taxation—because 19 is less than 32.

Justine Keay (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

It took you 18 months to get there.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

We just heard from one of the Tasmanian members that it took us some time. Yes, it did. If you had come to the table six months ago, we could have resolved this.

We have heard from the shadow Treasurer that the Labor Party are not talking about no tax; they are talking about 10 per cent and saying that is effectively what you would see in an Australian workplace—rubbish. Is he suggesting—and if he is I encourage him to make it policy—that the effective tax rate in this country for Australian workers is 10 per cent or 10.5 per cent? There is no way the effective tax rate for Australian workers is 10.5 per cent. Effectively, what they are arguing is for Australian workers to be taxed at a higher rate than foreign workers. I accept that it is a working holiday, but I do not accept that it should be a tax-free holiday—not at all.

The other inconvenient truth, here, for the member for Hunter—I encourage him to try and explain this—is why does, presumably, the Australian Labor Party want a tax rate for backpackers, foreign workers here under 417 visas, a full 4½ per cent lower than the effective tax rate for Pacific workers working on the Pacific Seasonal Worker Program. It is incredibly inconsistent, and why is it inconsistent? It is because they are playing the politics of, 'How do we get Bill into the Lodge as quickly as possible?' It is absolute rubbish and not the Australian Labor Party of a previous day.

The member for Hunter, who has been large on this debate, who has been huge, absolutely significant—it is a pity he cannot get a question up at question time—might have wanted to word up the Assistant Treasurer when the Assistant Treasurer was saying that the Labor Party does not support a zero rate. The member for Hunter yesterday said, 'Well, the Australian Labor Party was happy with zero, happy for foreign workers to come to this country, take jobs that are available to Australians, compete with Australians for those jobs and, effectively, pay a tax rate of zero.' Fair dinkum, mate. Are we serious about getting young Australians and unemployed Australians into work? Clearly not.

It is like I told you, you are not the Australian Labor Party of Hawke and Keating; sadly, you are not, because you are not interested in the national interest. You should take a minute to think about the national interest. We can have our partisan fights at election time—bring it on—but not while we are trying to govern, not while the casualties here are hardworking Australian farmers who you have sacrificed in your pursuit of one member for Maribyrnong and his journey to the Lodge.

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

I think the member for Barker ran out of things to say, so solidly has he inserted himself into this debate. I will start with the member for Barker because I was on ABC Riverina just this morning and I heard the same porkies he told just now in the House when the host of the program decided to replay for me what the member for Barker had said yesterday. It is pretty extraordinary the way he and others—the member for Mallee, the member for Hinkler, the member for Durack, the member for Capricornia and others—have tried to twist this debate.

I will begin by dealing with some of those myths. The first is the Pacific Islander program the member for Barker just raised: apples and oranges, Mr Deputy Speaker Mitchell, if you will excuse the pun. That program is a foreign aid program. This whole debate is about the appropriate incentive settings to bring backpackers from places like Europe here, and there is no comparison to be made with the Pacific Islander program. The second I will not dwell on, because the Shadow Treasurer has already covered it. It is this idea that Australian workers were going to be working alongside backpackers and paying more tax. It is absolute rubbish and no shortage of economic commentators have said so. But they have continued to perpetuate that lie right throughout the course of this debate. The third is this idea that it is not their tax—'Nothing to see here. Thirty two point five per cent was never our idea. It was the tax commissioner. It was the tax commissioner backed by no less than the Administrative Appeals Tribunal. Nothing to see here. We are innocent. We never supported this not in any stage.'

Mainly for the member for Barker's benefit, I am going to read exactly what Joe Hockey, the then Treasurer, said on budget night 2015. Having already talked elsewhere about levelling the playing field, he said the government will:

… change the tax residency rules from 1 July 2016 to treat most people who are temporarily in Australia for a working holiday as non-residents for tax purposes, regardless of how long they are here.

This is the Treasurer's speech on budget night. He goes on to say this means they will be taxed at '32.5 per cent from their first dollar of income'. This is not your tax? This is your Treasurer, on budget night, declaring that he is about to secure $540 million in revenue.

He said it with such glee; I remember it so vividly. Yet members on the other side want to claim that this was never their idea—'It is all the tax commissioner's fault.' And the member for Barker said that the Labor Party was happy with it at zero. Yes, we were. Of six years in government we never proposed a backpacker tax—never. In fact, in the 12 years prior to that we never proposed a backpacker tax. It took geniuses on that side of the House, when backpackers were already falling away, to decide to whack a tax on them, to whack a tax on them when they were already falling away. There is one thing that all of us in this place agree on: backpackers are needed in the agricultural sector and, indeed, in the tourism sector. They are, in particular, needed in the horticultural sector.

While I am talking about some of the misleads, I want to go to an awkward conversation, and that is the contribution of the National Farmers' Federation throughout the course of this debate. Obviously, it is important for me to have a working relationship with the National Farmers' Federation, and I do. I said in this place, last week, 'Congratulations to Fiona Simson' the new chair. She will do an outstanding job, I believe, in that position. She has been a great leader of NSW Farmers and other entities, and she will be, again, a great leader of the National Farmers' Federation.

But on budget night 2015 I rang the NFF, as you would expect the shadow minister to do. When I saw a 32.5 per cent backpacker tax and $540 million in revenue coming the government's way, alarm bells rang in my mind. As you would expect, I called the NFF. I asked them, 'Are you concerned about this? This looks really nasty for the agricultural sector.' 'No', was the response, 'no problem there.' So, initially, the opposition did not criticise the backpacker tax. We thought, 'The NFF is supporting this initiative.' We assumed they had been consulted and that they had in fact agreed with the proposition, only to learn, of course, that they had not been consulted. Indeed, no-one in the sector whatsoever had been consulted, which is just a disgrace. Had there been any modelling?

Ms Price interjecting—

The member for Barker still seems to not understand—and nor does the member for Durack, who has been pretty happy to intervene. I look forward to her contribution, remembering that, last week, she sat in this place and voted for 19 per cent. When the member for Durack, the member for Capricornia, the member for Hinkler, the member for Mallee and the rest of them voted for 19 per cent last week, they could not possibly have known they would have another opportunity to vote in this place on this tax.

Only last Thursday they were all prepared to impose a 19 per cent backpacker tax on their constituents, on their farming communities. Of course, as late as Sunday evening, the finance minister was telling us that 19 per cent was it and that no more negotiations would be entered into, only to be embarrassed less than 12 hours later when his Treasurer rolled out to say something different. But what those opposite do not understand is that backpackers who do not come here do not pay income tax. We know that they are falling off dramatically, and that is why horticulturalists are screaming for this government to help them. Nor do backpackers pay GST, if they are not here. Nor do they pay excise on things like alcohol. I think I can respectfully say they tend to consume a bit of it—and maybe a few cigarettes as well.

I will let those on the other side in on another secret. I have spoken with many of them over the years. I come from an area that has backpackers. Their parents tend to send them money as well. Most of them do not live only on their earnings. Certainly, they spend all their earnings while they are here, but most of them have a little bit of money sent from mum and dad as well. That is extra cash into the Australian economy. It is obvious that no-one on that side has even contemplated these matters.

I went to that point because I was about to say that there was no modelling on this measure before it was announced in the 2015 budget. There was no modelling on the impact on backpacker numbers and there was no modelling on the second-round effects on the broader economy. What sort of a genius government does that when backpackers are already falling off? It just defies any logic.

I heard the member for Barker say that his farmers are happy now. I doubt it, and I think he is going to get a bit of a surprise when he gets home—or, will it be a surprise? I think it will not be a surprise because he knows they are not happy. I wish the member for Mallee were here. I hope he is on the list. The member for Bendigo might be able to help me out there. Is he on the list? Surely the member for Mallee—

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Not on the list!

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

The member for Mallee is not on the list? The member for Mallee is not on the list. If the member for Mallee does not come down here and account for himself to his farmer constituents, I suspect he will not be here next time around. Let me quote what one of his farmers has said about a 15 per cent tax: 'Yes, they have conned a few to agree to 15 per cent. We talked to Andrew Broad. He is going to support 15 per cent. It is better than 19, but Labor is on the money at 10.5 per cent.'

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

Why not eight? Why 10½?

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

That is what growers are telling me. I am not calling them; they are emailing me; they are coming through my door; they are on the phone saying , 'We will not be able to compete at 19.' But I want to come back to the NFF. We rang the NFF on budget night—not a problem. Then, of course, just like the government when things got hot, they decided they had a problem with this tax and put forward, very early, this idea of striking it at 19 per cent. That is an arbitrary figure. Some might argue it is the first tax rate, but it is arbitrary in any case. And didn't they fight ferociously for 19 per cent! Just like members in this place, they criticised me and the Labor Party uphill and down dale because we would not support 19 per cent. If we had taken their advice, we would have 19 per cent today. That was their advice.

We should remember that the crossbenchers in the Senate have no power while ever the opposition is voting with the government. But we were never going to vote with the government on this matter. It is the Labor Party that has dragged this government screaming to 15 per cent. But they have not done enough. They need to get real and come to 10½ per cent, as is the nature of our amendment. Why 10½? Because it is the headline rate which matches New Zealand. When backpackers in Ireland and Europe generally are looking at Australia, New Zealand, South Africa and Canada as destinations, they do not get the calculator out and compute award rates and average tax rates and all of that: they just look at the headline rate. This is a sensible proposition.

I look forward to Minister Ciobo making a contribution to this debate. It was only a matter of weeks ago, maybe a month ago, that the minister for tourism was in the UK on a pop-up beach declaring to the world that the backpacker tax had been fixed because it was now going to be 19 per cent. What contempt for this parliament that he was over there spruiking 19 per cent before the parliament had even deliberated on the bill concerned! Well, doesn't he look silly! We talk about the golden goose that has been cooked. I think Minister Ciobo has been cooked—well and truly.

Let me turn to the minister of agriculture, our Deputy Prime Minister. Have you ever seen one person emit so much spin in your life? The amount of misleading he has been doing on this backpacker tax matter is a disgrace. It was not his tax. It was not his idea. Aussie workers were going to be paying more tax than backpackers. It was the Labor Party's idea! It is just unbelievable that this Deputy Prime Minister, no less, is prepared to stand in this place—and, worse, outside in front of the cameras, where he is not covered by privilege and protected from defamation laws—and lie. There is no other word for it. I am sorry if that is not quite parliamentary, but there is no other word for it. The Deputy Prime Minister just lies to the Australian community.

On his colleagues: a week or so ago, two National Party senators crossed the floor, and three cabinet ministers abstained from a vote. They told us they stood up for the farmers. What did they cross the floor on? The Adler shotgun. I am not denying that the Adler is an important issue. It is true: farmers need firearms; no doubt about that. Whether they need nine shots is an entirely different debate, to have elsewhere. They crossed the floor on the shotgun, but not one member of the National Party, nor indeed any Liberal representing a regional seat, has been prepared to cross the floor on the backpacker tax, notwithstanding the overwhelming evidence that horticulturalists, in particular, are being hurt by this new tax. How is this explained? How can you cross the floor on a shotgun but not cross the floor to defend your farmers? It defies any logic whatsoever.

I am going to read them into the Hansard. I hope I do not leave anyone out; I do not want to offend them: the members for Barker, Durack, Hinkler, Mallee, Calare, Dawson, Riverina, Parkes, Gilmore, Leichhardt, Flynn, Capricornia, New England—the Deputy Prime Minister doing his own people in—Gippsland, O'Connor, Wide Bay, Page, Maranoa, Lyne, Cowper, Wright, Fairfax, Forrest and Corangamite. All are people with significant horticultural or other farming activities in their electorates but they have gone missing—not like the members for Longman and Braddon, and others who are not here, like the members for Lyons and Richmond. The member for Perth understands farmers better than they do on this. He has been one of the most vocal critics of all, and he is from Perth. He gets it. He understands how important this is to Western Australia. The member for Durack—we will see what she has to say—is completely deserting her people, just like the member for Capricornia. I suspect some of them will not be back. They should think about crossing the floor now in this parliament, because it may well and truly be their only opportunity. And I question how much of a future Barnaby Joyce has got as the leader of that hopeless party.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

Today I have the privilege of talking about the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 (No. 2). This is a very good and sensible piece of public policy that this government has worked on. It has worked through the issues and has landed on a great result for both Aussie workers and foreign backpackers. This government has consulted with farmers, including the NFF; with its own regional members, like me, who are very in touch with the regional areas; and with all the other key stakeholders around, and we have settled on a sensible rate of 15 per cent. This is something that I, together with my other regional Liberal colleagues, like the members for Barker, Forrest, O'Connor and Canning, have been fighting for. Where we have landed will make Australia an even more attractive destination for backpackers. When you factor in our comparatively higher wages and more opportunity for regional work, we are now one of the most desirable destinations for backpackers in the world. When compared with our direct competitors for working holiday-makers, we really do come out on top if we compare ourselves to New Zealand and Canada.

We need to be sensible about this issue. In my state of Western Australia we have an unemployment rate of some 6.5 per cent, but in my electorate of Durack backpackers make up a large and very important part of our workforce—filling jobs in regional towns that, regrettably, Australians simply do not want to take. This is where the balance must be struck. We need to weigh up the needs of our Australian unemployed with the needs of our small-business owners and employers in the regions and our backpackers and working holiday-makers. It is a difficult balance, and I underline that. It is difficult, but it is one I think we have found in 15 per cent.

But the members opposite have shown absolutely no spine on this matter. Just this morning they were saying that they seek to amend the ABCC legislation to protect Australian workers—yes, to protect Australian workers. But they also pushed for a backpacker tax rate of 10.5 per cent. I do not know what their rate is; I think that is Senator Lambie's rate. This would mean that Australian workers would be paying more tax than the backpackers working right alongside them. So what is it: do those opposite stand for Australian workers or not? Or do they—which is what I suspect—simply make their policy on the fly, bark at whatever government policy we may discuss and not even pretend to be an alternative government? The hypocrisy of those opposite is breathtaking and is matched only by their disdain and their disregard for the bush in Australia. Labor should hang their heads in shame. I am not even sure most of those opposite they would be able to describe what a regional or remote area in Australia looks like, let alone deliver policy that will help it to grow and prosper.

The Turnbull government is capable and confident in its reforms for working holiday-makers, which will balance the needs of Australian workers—whom we care about, and I thought those opposite cared deeply about the Australian workers—with the needs of employers and the needs of backpackers.

This legislation is of immense importance in my election of Durack, with a large seasonal workforce right throughout the five regions of mid- and north Western Australia. I doubt that there are many other electorates in Australia that rely on a diverse backpacker workforce as much as my electorate of Durack does. I am very delighted that this government has struck such a sensible, balanced deal and we can have some closure and security for our working backpackers and for their employers. Backpackers work in a wide range of industries, performing a whole host of functions and jobs which many Australians simply will not do. I am not happy about that, and I am sure everyone who sits in this place is not happy about it, but that is the unfortunate reality.

Working backpackers in my electorate make coffee in Geraldton, they pick bananas in Carnarvon, they pour pints in Karratha, they work on cattle stations in the Kimberley and they also do considerable farm work in the Wheatbelt. Without working backpackers, regional life as we know it would simply grind to a halt. They are often short-term propositions but they almost universally come into town with a positive mindset, a willingness to work and a vitality of spirit that enriches whichever community they happen to land in. Far too many Australians are unemployed, but the fact is that Australians will not take these jobs in regional areas. I believe that until we get welfare reform which does not disadvantage welfare recipients from taking such seasonal and regional work, we will see this sorry story continue.

But we do need to protect those who are working side by side with our working backpackers, the ones who are out there doing whatever job they can get to provide for themselves. I thought that is what those on the opposite side stood for, but I am very alarmed that that is not what they appear to stand for. We need to encourage these people to continue to do whatever work they can get, to pull themselves up through their work and move on to bigger and better things in the community in time. That is why we cannot allow working backpackers to be paying less tax than their Australian counterparts, as suggested by those opposite.

A rate of 10.5 per cent is supported by Labor. It was not their idea—it was Jacqui Lambie's idea and they are supporting Senator Lambie—but it would mean that no Australian would get a job over a backpacker. That is just a ridiculous outcome in regional Australia. Surely we need to be encouraging the complete opposite. We cannot tax our working backpackers less than their Australian counterparts for the same work. That is unfair, it is unreasonable and it is un-Australian.

I am particularly proud that we have also introduced the $10 million global youth campaign to encourage young people to come and live and work in Australia. Spearheaded by Tourism Australia, industry and travel partners are now gearing up to sell the message to the world that Australia is a destination for working backpackers and that they are welcome. This, of course, is a fantastic result for regional Australia and this is a great outcome for the Turnbull government. I commend this bill to the House.

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

In policymaking, just like in life, it is important to think things through very carefully. If you make decisions on the run, if you fail to consider what the consequences of those decisions will be, you end up with bad outcomes. If you get it really wrong, you can absolutely damage our economy, you can destroy jobs and you can have a devastating impact on average Australians. That is what has happened with this backpacker tax.

The member for Durack, who just spoke, who spoke in here in favour of 15 per cent, last Thursday was supporting 19 per cent and two months ago was supporting 32.5 per cent. Their position is quite frankly farcical. It is an indictment of their failure to have proper policymaking processes built into the budget situation, and this comes from a group of people who farcically pretend that they care about regional Australia. For the National Party in particular to have presided over this policy disaster, when it has the Minister for Agriculture as the Deputy Prime Minister in a senior cabinet position, is quite frankly extraordinary.

It is not just us saying this. This is what Fiona Simpson, the new head of the National Farmers Federation, said this morning on Radio National: 'We were absolutely blindsided by an item in the budget that came in that we were not consulted about that said that they were going to put the backpacker tax up to 32½ per cent, from nought per cent. When that happened we saw the dangers of what would happen to our industry. People, backpackers particularly, would have a look at that tax rate, would compare it to how well off they would be in Canada, in New Zealand or other countries, and they wouldn't come, and they haven't come.' That is what the National Farmers Federation said about this debacle, presided over by this incompetent, neglectful government.

The fact is that, prior to this, there was no consultation with the industry. The backpacker tax has been causing chaos and uncertainty across the Australian community for more than 18 months. We know this from members such as the member for Solomon, who has reported mangoes lying on the ground, rotting, because of the unavailability of a workforce. We know that farmers have said that they would not plant crops because they were not sure they would be able to be picked. We know that the tourism sector, which I am proud to represent in this chamber on behalf of the Australian Labor Party, particularly in northern and regional Australia, has been devastated by these changes. It has been unable to get those seasonal workers, who are so important, just like in the agricultural sector—particularly in areas like Broome, in the member for Durack's electorate, which has a very short tourist season. People come in and provide support for those businesses.

Yet they introduced this tax, which went from zero to 32.5 per cent, not only with no consultation with the industry but with no research or modelling into the economic effects of the tax. Indeed, there has been no evidence provided from the government that they weighed any benefits from a so-called increase in revenue from this tax against the negative effect on jobs, on businesses and on taxation from the fact that backpackers were not coming here to pay any rate at all. So, far from an increase in revenue, you have had a reduction in revenue and economic activity, particularly in regional Australia, as a result of this government's position.

They introduced this in May 2015, and the first time it was voted on was last week, in late November 2016—18 months without them having the capacity to bring legislation before the parliament. The 2016 budget came and went; the whole of that parliament came and went; the election came and went—and still we did not have any legislation. It is quite extraordinary that you would have a 2015 budget measure still being debated in November 2016—not because it had been rejected by the Senate, because it had failed to be introduced. But, over that time, month after month, as the agriculture and tourism sectors were warning about the impact that it was having—that backpackers were not coming here and that that was having a devastating impact on small business and on regional communities in places like northern Australia and Tasmania that rely upon these people for the local economy—what we had from this government was an arrogance that refused to listen.

And then, at the last minute, you had the 19 per cent figure that they attempted to get through the parliament last week. The government had again said, just two days ago, that they would not budge. And now of course we know that that is precisely what they have done: to budge; to change their position—now down to 15 per cent, because of an amendment proposed by a very minor party in the other place, the once great National Party, rolling over to the Liberal Party on one circumstance in this place around the cabinet room, but rolling over to One Nation senators in the other place, a fact that they stand condemned on.

But the chaos has continued in this parliament. Not only did you have an idea plucked out of the air and put in the budget—and, one would assume, supported by people like Barnaby Joyce and Warren Truss, who was then the Deputy Prime Minister of the country—but then, when they changed to 19 per cent, you had, again plucked out of the air, an increase in the passenger movement charge. That increase in the passenger movement charge was made, again, with no economic modelling and no consultation with the sector. It was just a thought-bubble from an unconnected piece of legislation somehow attached to this because they had the farcical situation of having to deal with this legislation.

Last week, first, they knocked off the increase to the passenger movement charge in the Senate. So they had to put it again. And what they said to the One Nation senators was: 'If you just agree to this, we'll have an amendment and we'll bind the parliament for five years.' And of course we heard from the Speaker, in his ruling earlier on, how farcical that is. You cannot bind the parliament for next year, let alone bind the next parliament. The idea that you can do that is, quite frankly, absurd, and the legislation we will deal with next, arising after this, will have no practical effect at all. But it shows that this is government by chaos. On policy integrity, it is a fail. On proper research, it is a fail. On industry consultation, it is a fail. On parliamentary procedure, it is a fail.

Backpackers are critical to the Australian economy. They come here, they work largely in regional communities, and, what is more, they bring more money than they earn. They contribute to those local economies. It is not rocket science. If they are working in Darwin or Broome or Townsville or Launceston, what they do is: they bring money to those local economies. They earn money, and they spend it in those local economies where they are working. The money circulates around those local economies. They help to create local jobs. That is what they contribute.

But also they do something more than that, because all of the research shows that they come back. It is a bit like the people who have gone through the Colombo Plan and why that has been a fantastic investment in Australia's future. These people become advocates. They circulate the pictures of them working in the tourism sector or the agricultural sector through social media. They become advertisers for our great nation. They encourage other people to come here right now. But they also come back. They come back with their families. They come back and, instead of staying in the hostel, they stay at the Hilton, when they come back, down the track. They become advocates for Australia. It is one of the reasons why the tourism sector is growing so strongly.

Research shows that most backpackers earn about $16,000 while they are here, and they spend many times more than that. But we have had these ridiculous arguments put forward by those opposite—ridiculous arguments about backpackers somehow being better off than Australian workers. Well, let us be clear and let us knock off that furphy. Backpackers, under Labor's proposal, would pay 10.5 per cent from the first dollar earned. Thanks to the Labor government, there is a thing called the tax-free threshold. That is now $18,200. We tripled it when we were in government. If you want to talk about progressive tax reform—and I pay tribute to the member for Lilley for this—the most significant single progressive income tax reform in generations was when we tripled the income tax-free threshold. It took a million Australians out of the tax system completely. And, of course, most backpackers do not earn anything like $18,200. So it is the complete furphy that they have raised. They have gone out there and they have tried to argue, somehow, this case. But then, in the ultimate indictment, if anyone was unsure of whether we were right and whether they were just talking rubbish, compare their speeches of last week when 15 per cent would be 'a disaster' with speeches of this week when they have legislation before the House for 15 per cent. They simply cannot have it both ways.

When it comes to tourism, there are a few points. It employs more than a million Australians. It contributes $107 billion to the economy. Every dollar spent on tourism generates another 92c in other parts of the economy. Tourism has been recognised as one of the five super growth sectors. It represents three per cent of Australia's GDP. In the 12 months to August this year, overseas arrivals show eight million international visitors came into Australia, with a 10.9 per cent increase over the previous years. We have a real opportunity at hand to grow the economy through tourism.

If you have a look at the jobs in one seat. Leichhardt, which is based around Cairns, has 8,535 jobs. We will see which way the member for Leichhardt votes on this legislation. The tourism minister himself, the member for Moncrieff, has 6,672 jobs and businesses in his seat. The member for Durack, who just spoke, has 6,195. The courageous member for Dawson will not be voting for this, surely. He has 5,325 people employed. And across Tasmania there are 10,000 direct jobs and over two and a half thousand businesses rely upon tourism.

The fact is: this government has completely botched this legislation. It has damaged tourism and it has damaged agriculture. (Time expired)

Rebekha Sharkie (Mayo, Nick Xenophon Team) Share this | Link to this | Hansard source

I rise to support the passage of this bill, the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 (No. 2). For too long this issue has dragged on while our farmers across Australia have faced uncertainty. In recent days the government has negotiated in good faith with myself and my Senate colleague, Nick Xenophon, and I thank them for their support. This issue is particularly relevant to me. My electorate has an incredible amount of horticulture and viticulture. We have cherries, we have apples, we have pears. I have seven wine regions. I have strawberries, I have blueberries, I have raspberries. The sector is a major employer, with major investment in my region. Myself, family and friends of mine—we have all done seasonal fruit picking. It is a big part of our lives.

In recent weeks I have worked with the government to develop a seasonal workers incentives trial, which will begin in July next year. This trial will go for two years. It will allow for up to 6,000 Australian job seekers to do seasonal work without losing Newstart or youth allowance. It will not affect their income payments at all. Currently, people on Newstart can be hit with up to a 50c-in-a-dollar loss once they earn over $104 a fortnight. This is a huge disincentive for Newstart recipients to enter seasonal picking work, as they are taking a huge cut in their payment for what could amount to six weeks of employment.

Given that dealing with Centrelink is also arduous at the best of times, the requirement to reapply, should they earn too much and lose their benefits, is often reason enough for Australians to ignore seasonal farm work. The scheme will provide incentives to employment providers, including jobactive and Transition to Work, which works with young people and disability employment services that specialise in supporting people with a disability into employment. This will place participants in seasonal work. In my negotiations with the government, this was a key point in ensuring that we had employment providers as that connection between unemployed people and farmers. Employment providers will be eligible for incentives for up to six weeks while they support people into seasonal work. I firmly believe that, for the scheme to work, the employment providers need to be there as part of it.

Participants in this trial will also be eligible for a living-away-from-home allowance of up to $300 if they find employment that is more than 120 kilometres away from home. This will create a further incentive for participants to enter the trial. I believe that it will give an opportunity for unemployed people living in more metro areas, who perhaps have never even been on a farm, to look up to the hills in my electorate and to look out onto the plains and try working in this area. I also believe that this will support many locals who are unemployed in the regions to take on this work. This scheme, as I said, will remove the disincentive for unemployed people to seek seasonal work where there are genuine labour shortages—and that is why we have backpackers. I am confident that this trial will be successful in encouraging unemployed Australians onto the farm and in creating a bridge into agriculture work.

It is my hope that many of those people who take up this scheme will get the opportunity to stay on farms and, ultimately, will no longer need their income support payments. I think that is really critical because many farmers that I have talked to—and I have been working with farmers right through the campaign and since being a member—tell me that they are really keen to employ Australians for ongoing work, not just for the harvest. This is the $30 million commitment by government. Again, I thank government for taking a look at this and ensuring that farmers have a deeper and wider pool from which to draw labour.

With the greatest respect to Labor and the Greens, I would like to point out that the delay of the implementation of this backpacker tax is hurting regional Australia. I have spoken to many horticulturalists in my electorate. The pain that has been caused to farmers due to the uncertainty over this issue is immense. How many of these farmers that are going to be affected are in seats held by Labor? I am not sure, but I can tell you that I have scores and scores of farmers who are affected in my electorate. The delay in action has caused more problems than you could imagine. This is not an issue to play politics with. This affects people's livelihoods and it affects jobs in regional communities.

I do support the new tax rate of 15 per cent, just as I did also support the 19 per cent tax rate. What we have to remember is that this is same tax rate that is applied to the Seasonal Worker Program available to Pacific islanders, so I think that it is a good landing point. It is quite absurd that we would have the idea of a 10.5 per cent tax rate. We would be giving a better rate to Scandinavians, to Norwegians and to people from England who are coming over than we would give to our nearest neighbours, the Pacific islanders, and it would be a better tax rate than we would be giving to Australians working full time in horticulture. It makes no sense to me. I believe many backpackers will continue to come to Australia. Tax is higher than in New Zealand; that is granted. However, our wages are higher too.

What I cannot stand, though, is that we have spent hours and hours debating this. In the meantime, I have farmers waiting on the edge of their tractor seats and wondering what is going to happen as the cherries in my electorate are getting ready to be picked. My deepest concern is that we will have tonnes of fruit left on the trees, simply because we will not have a workforce to pick it, this year or next year. In my electorate of Mayo, this will have a significant effect on us.

We have already been through enough. Throughout September and October, we lost millions of dollars worth of produce because of the storms that we had. This issue has dragged on for too long, and my deepest hope is that it will finally be resolved this week. The damage has already been done to this year's fruit-picking season, and that cannot be changed, but I wish more members in this House would deeply consider the impact of delaying and politicking on this issue and the damage it is doing in regional Australia. While nothing can be done this year, it is my hope that the Nick Xenophon Team's seasonal work strategy, which is supported by government, will provide a long-term benefit to Australian farms, Australian jobs, and Australian people. I, again, thank the government for their negotiations. I plead to this parliament, please do not play politics with regional Australia. We do not deserve this. Get this through the parliament and let's give certainty to our farmers.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

I would like to acknowledge those who have made a contribution to this debate on the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 (No. 2). I acknowledge the member for Mayo, but I want to say to her that she needs to understand that we are in the dilemma we are in at the moment purely and simply because of the government's own work. On the night of the 2015 budget, Treasurer Hockey introduced this tax. If there are currently backpackers picking cherries in your electorate, they are paying zero tax. The fact that you may not get sufficient workers this season is purely down to the uncertainty created by the government in the 2015 budget. There is no other reason.

There has been very lacklustre performance from the bunyip aristocracy in the National Party. They have done next to nothing to look after the interests of workers in their communities, or the businesses in their communities. That is what they are.

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

More bunyip than aristocracy.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Mate, you're certainly a big bunyip.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

We will not have any more of that, thanks.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

We won't be sizeist!

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Don't push it.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

My electorate, Lingiari, produces around $250 million worth of agricultural and horticultural product a year. We are right in the middle of the mango season now. We have seen reports of mangoes on the ground that will never get to market because the growers cannot get a workforce. During the approximately six-week period that they require labour, they need about 2½ thousand workers—for six weeks. This is in a labour market where we have a very low unemployment rate generally, so there is not an available workforce to do this work. It has to come from somewhere else, and it has traditionally been the backpackers. These businesses have suffered immeasurably as a direct result of the actions of this government.

We heard the member for Hunter retell the story about the National Farmers' Federation and their various positions on this tax proposal, but the simple facts are that those people currently involved in picking mangoes in the Northern Territory have suffered as a direct result of the stupidity and inanity of the government and for no other reason. The uncertainty which has been created is all their own work. Let's just remind ourselves—when Treasurer Hockey said he was going to be levelling the playing field in 2015, he said the government would change the residency rules from 1 July 2016, and he went on to say:

This means they will be taxed at 32.5 per cent from their first dollar of income.

You can imagine what went around the world: 'Don't bother coming to Australia because you'll be paying 32.5 per cent in tax of every dollar earnt, even though you're only a temporary worker for a short space of time in vital industries.' The advice from the Parliamentary Library was:

What do we know of the result? We know now that, over the last year to June this year, working holiday-maker numbers from the United Kingdom have dropped by nine per cent; from Ireland, they recorded a 46 per cent drop; Italy was down 24 per cent; and France was down 14 per cent. Why is this? Again, it is because of the bunyip aristocracy sitting back and not wanting to be involved in the discussion and the debate which actually affected them and their constituents and those people taking product out of their industries.

Thinking about these arguments, the member for Mayo again talked about the difference in apparent pay, as they see it. Those holiday-makers are currently—let's emphasise 'currently'—paying zero tax on every dollar earned and that has historically been the case. We did not attempt to change it when we were in government, as the member for Hunter said earlier on. It was not changed by the Howard government. This is being done in a capricious manner by the Liberal Party and the National Party to try and fix up their budget problems, which are all of their own making. And when they say to us that they want to level the playing field by introducing a 32.5 per cent tax and we object, we get pilloried. So they have now come back to 19 per cent. Of course as recently as Sunday, when being interviewed on TheInsiders, the finance minister said: 'Nineteen per cent is as far as we are we prepared to go. The budget cannot afford to cut taxes for foreign workers any further.' That did not last long.

Members of the National Party whose electorates are involved with horticulture or agriculture or tourism industry initially argued for 32.5 per cent and then argued for 19 per cent and today, apparently, are able to argue for 15 per cent because that happens to be a magic number that everyone likes. There is no science to it. It is a proposal which has come down because, well, it is different—it is not quite what the government wanted and it is not what the Labor Party wanted; therefore, let's strike a happy medium and go to 15 per cent. What is the justification? 'We do not have one.'

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

Pacific Islanders.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

Pacific Islanders is the justification now. What was the justification previously when they were paying zero tax? Any answer? Let's ask ourselves these questions because the public are entitled to know what was going through the minds of those people in the National Party in particular when they discussed this issue. The member for Dawson said he would cross the floor. Remember? 'I will cross the floor because this is such a stupid thing.' Here is your opportunity. Very shortly we will be having a vote.

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

We have resolved it.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

You have resolved it, have you? You think now that everything is hunky dory, that everything is happy, that you have done the right thing and that the people in your electorate are going to thank you for coming down firstly from 32½ per cent to 19 per cent. That is good. You have done well there. When they said: would you like, 10 ½ per cent or 19 per cent? What did you say? I will go for the 19 per cent, thank you very much? It is absurd. When they say: how about 15 per cent? Yes I will take 15 per cent—hands up. Well here is an opportunity to bring it down to 10½ per cent. When the vote comes on, just walk over the aisle and vote with us—show some guts. Look after your constituents and look after their interests. He is a lovely bloke, the Minister for Veterans' Affairs. I know he is thinking to himself: here is my opportunity to differentiate myself from my parliamentary colleagues. Here is an opportunity for you, Minister, to show some gumption and do something reasonable for your electorate.

We see time and time again the Treasurer come in here emboldened to describe us on this side as being conspiratorial, telling us we have got no vision, no standards, that we are corrupt—all the sorts of mealy mouthed stupid words that come out of his mouth almost every day. What has he done? He has gone from 32 ½ per cent to 19 per cent—and there is no room for any more movement—and he is very pleased now to be able to accept 15 per cent because that is a reasonable compromise. It is not good enough. The Australian public expect a lot more from us in this place. When you introduced the 32½ per cent in the first place, the National Farmers' Federation described, as the member for Hunter said, how they were blindsided by this approach because there had been no consultation, just as there had been no consultation about the 15 per cent. You have an opportunity here to do the right thing by the Australian community, to do the right thing by Australian workers and do the right thing by those travelling to this country to work as backpackers by giving them an incentive to come here, because we know the workforce has dropped off.

What do we say to those people who have lost hundreds of thousands if not millions of dollars as a result of fruit not being picked this year because of the stupid decisions taken by this government? Whose responsibility is it? Are you prepared to own up to it? What does the Prime Minister say when he visits regional Australia? Does he say, 'I wanted 32 ½ per cent. You did not want that but that is what we wanted. Then we went to 19 per cent. Oh, bad luck, I do not know what impact it has had on your communities.' We know what the impact is, Prime Minister, Treasurer, agricultural minister.

The agriculture minister, for God's sake, what do we say about this man? What can we say about this man? Now he is a true representative of the bunyip aristocracy—there is no doubt about that—coming here feigning indignation every second day and then just basically saying whatever happens to come into his mind. He opens his mouth and lets the wind blow his tongue around. It is about time he changed his behaviour. It is about time he thought before he spoke. It is about time that he understood the reasonableness of the position which is being adopted by the Labor Party in this debate. It is about time he said to his fellow members of the National Party and indeed the government: 'We should be supporting this 10½ per cent because it is the right and reasonable thing to do. It is fair, it treats people appropriately and it is not a disincentive for backpackers to come to this country.'

The Minister for Agriculture and Water Resources also should admit the failings of the system currently and the fact that people have got fruit lying on the ground as a direct result of the stupidity of the government and the decision makers within the government and the policies of the government. It is not anybody else's fault, just theirs. I say to my community, 'When you look at these people, look very closely. They do not bear great gifts. They come here and tell you fibs, they mislead you, they tell you all sorts of stories, they try to malign the Labor Party for standing up for your interests but the only people who are standing up for your interests are indeed the Labor Party, not your supposed friends in the National Party or the Liberal Party.'

Now is the time for the Liberal Party and the National Party to show that they are prepared to do something which is reasonable and adopt the 10½ per cent, which the Labor Party is proposing, and amend the legislation we have before the House.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

It being almost 1:30, the debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.