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

Well, they are a rabble. I can't say it with quite the intonation that Senator Cameron can, but absolutely they are a rabble. Senators, let's reflect on what happened around the backpacker fiasco. It was leading into the Christmas holidays. We were all looking forward to it—talk about a rabble—after an absolutely shambolic double-dissolution, going into Christmas of 2016. What did we have? We had a seemingly obscure piece of legislation around changing the tax rate for backpackers. It nearly brought the government down and it nearly brought down the Prime Minister at the time. That's how serious this was. That's how it snowballed into an absolute fiasco for the government.

We had a situation where, in a tax grab, a revenue grab—and it wasn't very much revenue either, by the way; we're talking about only a very small amount of money—the government decided in their budget to go after foreign workers. They decided to go after foreign workers, who, for all intents and purposes, were working on short-term visas—holiday visas—in Australia, helping Australian businesses pick their fruit, which is very important in my home state of Tasmania. The government basically said, 'You're not paying any tax while you're here. We're going to levy a 32.5 per cent tax rate on the money you're going to earn.' There were existing exemptions and loopholes and all sorts of accusations of rorting of the system, but the employers, the National Farmers' Federation, clearly told us senators—and as a Tasmanian senator I had discussions with all the stakeholders—that the system was working. They were able to source the labour they needed to pick their fruit and stay in business. The system was working because Australia was an attractive destination. They not only came here for a holiday but for a working holiday, and there was work available. They were able, effectively, to get more money in their pocket, because of the way the tax laws were, and therefore we were very competitive compared to our friends across the ditch in New Zealand, and to other places. So, the government set a 32.5 per cent tax rate and there were going to be no negotiations on that.

When it was clear that they didn't have the support in the Senate the government decide to bring in a tax rate of 19 per cent. They weren't going to budge, and they weren't going to negotiate. They'd already compromised, so that's what it was going to be. Of course, senators in this place got together, and they talked to employers again, and a new proposition was put up on multiple fronts—I think One Nation put up a proposition; the previous Senator Lambie certainly put up a proposition—and the Senate passed a 10.5 per cent tax rate for foreign workers. The Greens, at that point, had a really clear position. We wanted the system to stay the way it was. We didn't want foreign workers to pay any tax while they were here, because they were benefiting our economy, they were benefiting our community and they were spending most of their money here anyway. They were earning on their working holiday money that they were spending in this country. We were pretty happy with the way it was, so we didn't support changing the tax rate at all. We had a very clear position all the way through.

The government weren't going to come at 10.5 per cent, so what did they do? They dropped their required tax rate to 15 per cent. So it was 15 per cent, and that was it. Just as they'd said the other two times, they were not going to negotiate on 15 per cent. That was the base rate. I can understand, if you're the government and you're in charge of a country, why you wouldn't want to negotiate legislation by auction, and not just by auction but by very public auction. If it wasn't clear to Australians after the double dissolution that the government had lost control it certainly was going into Christmas 2016, because legislation was up for a very public auction.

As a Tasmanian senator, I could see my state of Tasmania on its knees—and ultimately we're here as senators for our states. It was desperation stakes. Where I come from, in the Tamar Valley in Tasmania, it's all fruit growing operations. As some of you may be aware, I planted a small vineyard of three hectares many years before I came into the Senate. I relied on fruit pickers. Everybody in my state in the agricultural industry relies on foreign workers, mostly on working holiday visas. As I've said in the Senate, I had a fantastic pair of rock climbers, two fantastic guys from Patagonia, who were staying on our farm and picking fruit. They were working in all sorts of different businesses. We've been lifelong friends ever since. This is absolutely critical to Tasmania.

I felt very strongly, and I know Senator Rice and others in the party room who come from states that have large agricultural industries felt very strongly, that we couldn't let this go on over Christmas. We were getting the very clear signal that businesses weren't able to employ people because people weren't coming. The numbers were down significantly because of the uncertainty that had been introduced for what was essentially, in the beginning, a small tax grab. It snowballed, and there was a stampede away from Australia on the back of this stupidity. That's what it was. At the end of the day, the Greens were the adult in the room. We sat down with Senator Cormann, and we negotiated what we thought was a way forward for everybody. We got the best possible deal we could for foreign workers, although they paid a 15 per cent headline rate, which the government at that stage refused to negotiate on. They were paying 95 per cent of their superannuation when they left this country into a fund that went back to the government. Foreign workers were only getting five per cent of their super back. So we proposed to the government that they change that 95 per cent rate to a rate that gave an equivalent effective tax rate of 10½ per cent. At that point it worked out to be that 65 per cent of their super would be paid to the government, so foreign workers got over a third of their super back in their pockets when they left. So workers got the 10½ per cent rate, the government got to save face and keep its 15 per cent headline rate and the Greens also negotiated a desperately needed $100 million for Landcare. We need a lot more than that, but we negotiated that deal. It was a good deal for foreign workers. It was universally applauded by employer groups, by the National Farmers' Federation and by many businesses, including in my home state of Tasmania. Although we'd have liked to have seen no tax at all paid by foreign workers while they were here, it has turned out to still be an effective, competitive tax rate for backpackers.

Let's get back to this totally bizarre piece of legislation. How did we get here today? Part of the backpacker tax package passed by this parliament involved establishing a public register of employers. The explanatory memorandum of the original bill, the Treasury Laws Amendment (Working Holiday Maker Reform) Bill 2016 states:

The ATO will develop a simple registration process for employers who need to withhold tax from WHMs.

WHMs are working holiday-makers. The explanatory memorandum continues:

Information as to who is a registered employer for this purpose will be publicly available. This will incentivise employers to register in order to attract WHMs, since unregistered employers will be required to withhold at the 32.5 per cent rate from the first dollar of income.

Keep in mind that that 32½ per cent rate is not competitive. That will not bring in foreign workers to work in the businesses where we need them. We were absolutely confident about that. It would be a total disincentive to potential employees. So this was to be avoided. The explanatory memorandum continues:

The register will assist with enforcing compliance and will provide data that can be used to help inform future policy related to WHMs.

The then Treasurer, now Prime Minister, in his second reading speech, stated:

The register will be made public, with a list of registered employers published on the ABN Lookup, making it easy for working holiday-makers and others to check the registration status of a potential employer.

But, in the process of trying to get the bill through parliament, it would appear that Senator Leyonhjelm extracted a commitment from the government not to make the register public. Presumably he got this concession when the government thought they needed his vote. In the end, they didn't need his vote, and legislation was passed that would allow for the register to be made public. But, not three months later, government introduced this bill to repeal their own legislation, on a deal that they didn't even do. Of course—I don't know—there may have been other deals done around this. That's very possible.

This bill has been sitting in the parliament ever since then. This bill has, it would appear, been cause for the ATO not to act to make the register public. The answer to question on notice No. 196 from the Senate Economics Legislation Committee at supplementary budget estimates 2017-18 says:

As Registrar of the Australian Business Register, the Commissioner has the discretion to make certain information publicly available.

The Registrar has chosen not to make an employer's working holiday maker registration publicly available.

In other words, even though this legislation passed this place and there was a very good reason for this register—the register was there to protect working holiday-makers in this country—it wasn't made public. The answer to another question on notice to the Senate Economics Legislation Committee, No. 68 at budget estimates 2018-19, says:

The Commissioner, in his role as Registrar of the ABR, received discretion to make details of employers of working holiday makers publicly available on 2 December 2016 via an amendment to the ABN Act Schedule 2 of Treasury Laws Amendment (Working Holiday Maker Reform) Act 2016.

The Registrar has chosen not to make these details publicly available to address concerns raised in the community about the privacy of this information.

Really? Who in the community has raised these concerns about the privacy of information, apart from Senator Leyonhjelm?

Senator Leyonhjelm is, out and proud, a libertarian, and this is important to him and the people he represents. I don't know how many of them there are. But who else? Who else is the proxy for concerns raised in the community about privacy of this information? Was it the businesses themselves who didn't want to disclose the effective tax rates that they were levying off foreign workers? That's something we can ask in committee, because I'm interested to know who else has raised these issues with the minister and the minister's office apart from Senator Leyonhjelm.

The last thing I'd like to address is why the government hasn't brought this bill forward before now, especially considering the fact that they haven't disclosed this register anyway. They haven't protected foreign workers. They haven't made it easy for foreign workers to detect and determine which employers would be the best employers to work for in terms of how they're going to be paid. Why would I want to go and work for a business that's going to charge me 32.5 per cent when I could get 15 per cent from a business on a register and I can make that decision? If I'm on a working holiday, obviously these decisions are going to be very important. I'm going to be looking at where I'm going to work geographically. I'm going to be determining my choice of employment not just on things like tax rates but on where I want to go for my holiday and what I want to do around my holiday. My two friends from Patagonia, who started on our farm in Tasmania, chose Tasmania because they were rock climbers and there was plenty of work. We were desperately seeking workers in the summer of 2016. Our registrations—I checked this with working holiday businesses who matched the demand and supply—were down more than a third that summer because of this backpacker fiasco. It was a totally unnecessary fiasco, based on a quick tax grab by a government without giving any thought to the uncertainty this would cause to the agricultural industry in Australia. It was an absolute fiasco.

I say this personally: I, as a Tasmanian senator, felt that it was very important to get a deal done and certainty for Tasmanian businesses, and for the workers. If we had let it go to Christmas they would have been slugged 32½ per cent. And Tasmanian pickers and businesses weren't able to find workers. I got a lot of attacks. That's probably a good way to describe it. I would like to use an expletive, but I know the Acting Deputy President would pull me up on that. I got a lot of attacks that Christmas because we did a deal with the government and people felt like we'd let Mr Malcolm Turnbull and Mr Scott Morrison off the hook. This could have brought the Prime Minister down. It was that bad. It was that much of a fiasco. They had totally lost control of government over this bill. But it was absolutely critical, and my party room all supported this because we wanted to see the agricultural businesses get the employment they needed to keep going, and we wanted to see workers and foreign workers get the best possible deal and get certainty on this issue. That's why we came up with what was a very good compromise in the end for all parties involved.

We won't be supporting this bill. We want to see this register. It's absolutely critical that it's out in public and that workers get to choose and get the best information possible for their working holidays. When we go in committee, unless the minister deals with this in her second reader amendment, I'll be very interested to know who these other parties are that have complained about the privacy issues surrounding this public register.