Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Duniam for that very good question. It is great to be answering this question in the presence of distinguished former senators Richard Colbeck and Sean Edwards.

The government's reforms in this area help ensure we can meet seasonal labour supply needs, making sure Australia remains an attractive destination for working holiday-makers whilst also making sure that we do so in a way that is sustainable and fair. Indeed, it is important to get the balance right between meeting Australia's seasonal labour supply needs and a fair and more sustainable income tax system in Australia. We have consulted extensively to get that balance right. We have consulted with employers in relevant sectors of the economy, and indeed we have consulted with Liberal and National Party members and senators.

Our solutions for backpackers as part of an overall package of reforms is that the new 19 per cent tax rate on working holiday-makers from their first dollar is actually very competitive internationally. It puts us in a slightly better position than the equivalent markets in New Zealand, Canada and the United Kingdom. Indeed, let us look at what a backpacker in New Zealand, Canada or the United Kingdom would earn in take-home pay. When earning $13,000 in Australia it would be $10,530 in their pocket after tax, in Canada it would be just $9,837, in New Zealand it would be $10,126 and in the United Kingdom it would be $10,470.

We are also lowering the application charge for working holiday-maker visas, allowing visitors to stay with one employer for up to 12 months, and we are providing Tourism Australia with $10 million for a global advertising campaign targeted at young people. To protect against exploitation of working holiday-makers, the employers will need to register with the ATO, and legislation will need to be passed by the end of this year to allow employers time to register and to give certainty to the industry. (Time expired)