Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

The Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 (No. 2) is bad policy for agricultural producers in this country. Let us be very clear about this. There have been plenty of heroes in this place hunting headlines, trying to come in at the last minute and do a deal. For the government, I am not sure; for agricultural producers, I am not sure. This is a 15 per cent headline rate for backpackers. Most backpackers in this country do not pay tax at the moment because they deem themselves to be residents for tax purposes. That is a situation that has worked very well for this country's agricultural producers, and it has been good for backpackers. This government has now put a new tax on backpackers of 15 per cent from the first dollar they earn through to $37,000. Let us be really clear about this. This is not a reduction in the tax rate. For all effective purposes, this is a new tax on backpackers.

Go across the ditch, across the Tasman to New Zealand, and backpackers pay a rate of around 12 per cent from the first dollar that they earn. It might sound on the surface that 15 per cent is pretty close to that and that it is competitive, but that is not the case, and let me tell you why. Backpackers in this country also pay 10 per cent of their salary into superannuation, the same as any other worker. This government is going to claw back 95 per cent of that 10 per cent of superannuation. So, for all effective purposes, that is another 9½ per cent tax on top of 15 per cent. So let us do the maths: around 24 per cent is the tax rate that backpackers are going to pay in Australia. Remember at the back of your mind that, at the moment, most of them are not paying tax in this country. These are some of the lowest paid workers in Australia, who fulfil a very important role for Australian industry. We want them to come here for their working holiday, we want them to work hard and we want them to spend their money in the tourism industry while they are here seeing this beautiful country.

It is a win-win relationship, but now, thanks to a stubborn Treasurer who is penny pinching, trying to raise revenue, we now have a new tax on backpackers which is effectively 24 per cent—twice what they pay over in New Zealand. And if anybody does not think the Kiwis are going to capitalise on this, they are living under a rock. This is a competitive situation to get labour in this country. So let us be very clear about this: this is not a good deal for agricultural producers. This is not a good deal for backpackers. This is bad policy, and the Senate should reject it. This is not about getting a political win for Mr Barnaby Joyce and Mr Scott Morrison. Some of the farming groups have been running around—the National Farmers' Federation—cheerleaders for the Liberal-Nationals party, saying, 'Take 19 per cent' and, when that did not happen, 'Take 15 per cent', because they think it is a good deal for the government, because they are trying to help the government out.

Well, we are trying to help agricultural producers, and we want to see this bill rejected and a competitive tax rate put in place to help Australian producers and help backpackers. The Greens will not be supporting this, and we have a second reading amendment. I move:

At the end of the motion, add:

", but the Senate is of the opinion that the increase in the tax payable on superannuation to 95% which is contained in Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2016 should not be proceeded with.".

That would give an effective tax rate for backpackers that is much lower than the one that is being proposed.