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

I am not surprised that the Labor Party are so disappointed. They were playing political games—trying to prevent a good outcome in the national interest by resolving this issue in the interests of farming communities across Australia. What the government was able to do, together with One Nation and the Greens and the Nick Xenophon Team, is put in place a fair and sustainable arrangement.

Senator Wong suggests that this is a deal that is worse for the budget. That is actually wrong. I am not surprised that Labor made such a mess of the budget, if they do not understand that we are locking in a structural improvement to the budget bottom line. We are making a one-off $100 million contribution to Landcare, which is of course a very good program, which we support and which regional communities across Australia support. Of course, if we had further reduced the tax rate, that would have been a cost to the budget, ongoing. Every single year—year in, year out and over the medium term—it would have continued to accumulate. We have been able to lock in a rate at 15 per cent.

There is a consensus in this chamber now for a 15 per cent income tax rate for nonresidents, foreign workers, holiday-maker workers, and that is of course the rate that will now apply, ongoing. We also have to remember that last week the Senate passed legislation to increase the passenger movement charge by $5 to $60, and that legislation only comes into effect once we have legislated the income tax arrangements for working holiday-makers. In effect, what the Senate is doing tonight is locking in a budget improvement of about $560 million, which is a structural improvement which will build over time.

Senator Wong talks about the AAA credit rating. The credit agencies will look at the structural impact of the decisions that we are making. The ratings agencies, unlike the Labor Party, understand the difference between a one-off $100 million contribution to the National Landcare Program—in effect, a capital contribution, a grants contribution and an ongoing improvement—and an ongoing liability. If we had gone down the path the Labor Party wanted us to go down and cut taxes for foreign workers by more—10.5 per cent is what they said yesterday—we would have had to increase taxes for Australians to pay for it or cut spending for Australians to pay for it. We have been able to achieve an arrangement that will lock in an ongoing budget improvement. We are very pleased that the Greens have engaged with us constructively to find a resolution because, quite frankly, we needed to find a resolution before we left this place this week. I commend the outcome that has been achieved by constructive people right across the chamber. I commend it to the chamber. I think it is in the national interest now for us to get on with it.