Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

It is good to have the opportunity to speak to the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016. It is worth having a look at the history of elements of this package. The so-called backpacker tax first appeared in Joe Hockey's last budget in 2015. The government failed to introduce legislation enacting this original measure prior to the last election. That measure, if implemented, would have treated most people temporarily in Australia for a working holiday as nonresidents for tax purposes. They would have been taxed at 32.5 per cent from their first dollar of income.

It was not surprising that this was met with a wave a criticism. The government's own 2015 budget papers made clear that many backpackers were paying tax at the same rates as residents. The budget measure marked a significant increase in the tax rates on backpackers, and it was not surprising that the agriculture and tourism sectors recoiled at this change. What was surprising was how long the government took to heed their concerns. Given that the reforms were originally set to commence on 1 July 2016, it is amazing that this issue was left unresolved a year later, in the 2016 budget.

We then got to the election campaign, where, after months of criticism from outside and from within, the government announced a review of the backpacker tax. And then, just over a month ago, the Treasurer announced a compromise: instead of the proposed 32.5 per cent tax rate from their first dollar of income, a lower rate of 19 per cent was proposed from the first dollar of income up to $37,000, which is still a significant hike on the tax that many backpackers are currently paying. Above this level, marginal tax rates would apply. The government also proposed to raise the passenger movement charge by $5 and to increase the tax on the departing Australia superannuation payment to 95 per cent.

We referred the package to the Senate Economics Legislation Committee to give the industries that the government had ignored a voice in this debate. Given the government had nearly 1½ years to sort this matter out, it was more than reasonable that we took a closer look at what the government have proposed here. The government were not listening to the industries that had a stake in this debate. They wanted to avoid scrutiny, just as they wanted to avoid scrutiny when they silenced debate on this package of bills in the House of Representatives. Unlike the review conducted by the government, which did not consider all the tax measures, the Senate committee was able to consider the package as a whole and was able to hear directly from farmers and tourism operators on the ground. It is also important to note that the authors of the Deloitte report, commissioned by the government prior to the announcement of the legislative package, acknowledged:

Deloitte has not undertaken any additional research or analysis, and the information contained in this report is reflected as it has been provided by the stakeholders engaged through this process. Deloitte has also not reviewed the quality or validity of the information presented to us.

These two points are critical as to why Labor has undertaken the responsible position of further scrutinising the legislation currently before the parliament.

By contrast, the government resisted these calls for consultation with stakeholders. This was despite the fact that the government had announced new measures not previously put forward to stakeholders. Adding insult to injury, the inquiry process has also revealed that the government are already spruiking the 19 per cent tax rate in the United Kingdom, regardless of the fact that this legislation has not passed the parliament. It is worth reflecting on the sheer arrogance that was on show: poor consultation with stakeholders and with the industries affected, and then, in the name of giving people certainty, the Treasurer demands that the parliament pass legislation. Not only does the Treasurer demand that this parliament come to heel, but the government then goes and gags debate in the House of Representatives, preventing members in the House from speaking on the legislation. Their disregard for this parliament is matched only by their disregard for the industries affected by some of the measures contained in these bills.

Let me now turn to the bills in this package. The bills, as they currently stand, would apply a 19 per cent income tax rate to working holiday-maker taxable income on amounts up to $37,000, with ordinary tax rates for taxable income exceeding this amount; allow the Commissioner of Taxation to disclose certain information to the Fair Work Ombudsman; require employers of working holiday-makers to register with the commissioner; require the commissioner to give a report on working holiday-makers; reduce the visa application charge for working holiday visas and work and holiday visas; increase the rate of the departing Australia superannuation payments tax to 95 per cent for working holiday-makers; and increase the passenger movement charge from $55 to $60.

Parts of this package of bills attempt to address issues in relation to the working holiday visa system and the treatment of workers on working holiday visas. Here it is worth mentioning the recent report released by the Fair Work Ombudsman. The report detailed exploitation of working holiday visa holders, including underpayment or nonpayment of wages, workplace health and safety issues, and other significant exploitation. Labor took to the election a policy for a fairer system that would ensure working holiday-maker visa holders were afforded proper pay and conditions. Our proposed review would have looked at the effectiveness of the current visa programs, the effect on the labour market and the instances of exploitation and abuse.

Labor wanted to give affected sectors and affected people the opportunity to make a submission through the Senate Economics Legislation Committee. This was to give them what they had so far been denied: a chance to have their say. We wanted to wait until the bills had been subjected to the scrutiny and the consultation that the Senate committee process provides. The Senate Economics Legislation Committee gave these industries the opportunity to have that say. There were three public hearings on the working holiday-maker reform package—in Canberra, in Cairns and in Tasmania. Fifty-three submissions were received and, of those submissions, by our count, 16 supported the tax package, 28 opposed the tax package and nine supported only certain aspects of the tax package. Many of those nine were opposed to the increase in the passenger movement charge.

The concerns in the submissions centred on ensuring that Australia remains internationally competitive in being able to attract backpackers, who do crucial work for our agriculture sector and who provide crucial income for our tourism sector. It also became apparent that none of the second-round negative effects were properly taken into account with regard to the impact of the tax measures. It came out that the National Farmers Federation believes that there has been a decline of up to 40 to 90 percent in backpacker numbers while this issue has remained unresolved. The inquiry also showed that the labour shortages caused by the drop-off in backpackers will hit rural and regional Australia much harder than our capital cities.

The evidence from the Senate inquiry on the government's backpacker tax shambles is clear: Australia needs a lower tax rate to remain internationally competitive and to ensure rural and regional businesses can continue to attract the seasonal workers they need. Labor believes that the government should compromise on the 10.5 per cent tax rate that industry, regional communities and members of the Senate crossbench are calling for. Labor will guarantee that, through this package, any changes will not disadvantage Australian workers. The government should stop misleading Australians to cover up for their continued failure to get this tax right after almost two years. Our farmers need a competitive rate and they need certainty.

Labor will oppose the increase to the passenger movement charge, and I turn now to our reasons for doing so. Through the inquiry process, it became apparent that the passenger movement charge increase was introduced with no meaningful consultation. The passenger movement charge is a $55 impost on every traveller leaving Australia. It is embedded in the cost of air and sea tickets. As part of the working holiday-maker reform package, the government wants to raise this charge by $5, which is an increase of nine per cent.

Australia already has the second highest departure tax in the developed world after the UK air passenger duty. However, the UK air passenger duty applies at different rates. There is a lower rate for short-haul flights. Australia's passenger movement charge applies to all outbound overseas flights. This means that Australia's passenger movement charge is in fact higher than the UK's with respect to short-haul flights. Our passenger movement charge applies to flights departing to overseas countries, regardless of distance. It applies to travellers going to family reunions in New Zealand or taking advantage of discount flights to go to Fiji or Bali. On trans-Tasman routes, the passenger movement charge can represent nearly 10 per cent of the average return fare.

Despite the government's abysmal approach to consultation and despite the gagging of debate in the other place, we gave the industry a chance to be heard with a Senate inquiry. That inquiry encouraged interested industries to make submissions. It held hearings in Canberra, Cairns and Launceston. Overwhelmingly, stakeholders across the tourism and aviation sectors have rejected the proposed passenger movement charge increase. The submissions to the Senate inquiry raise serious concerns about increases to the passenger movement charge.

The Qantas Group submission to the Senate inquiry highlights the disproportionate impact an increase in the passenger movement charge will have on Australian airlines. They argue that it is not as simple as passing increases on to passengers through airfares, as that has an impact on competition. The Qantas Group also points out that the 'structure and level of the passenger movement charge is inequitable for price sensitive Australian travellers and international tourists'. For example, Jetstar's fares on some international routes start at $130, which means the passenger movement charge alone already represents 46 per cent of that fare.

The Tourism and Transport Forum argues that an increase in the passenger movement charge will have a serious impact on Australia's ability to compete with other destinations, because when you 'add to the PMC the high visa costs and complicated visa processes applied to visitors from our key Asian markets, Australia is a less attractive option'. Similarly, the Australian Chamber—Tourism believes that, without proper modelling, an increase in the passenger movement charge should not be introduced. Their submission states:

… there is far greater potential for revenue growth from a policy focus on increasing passenger numbers by removing up front barriers to travel than there is by imposing a demand dampening 9 per cent increase on this charge.

The International Air Transport Association believes that increasing the passenger movement charge would create significant harm for consumers as a consequence of higher fares. It would harm Australian exporters through 'higher travel costs and reduced competitiveness', which will also act as a 'brake on the Australian aviation sector'.

What is becoming clear is just how little consultation was undertaken with the tourism industry before the increase to the charge was announced. This is consultation that should have occurred before this industry was blindsided by this poorly thought out measure, because this announcement from the coalition came as a complete surprise. I want to quote from the head of the Tourism & Transport Forum. She said:

Industry has been completely blindsided by this decision to increase the PMC by $5—a 9 per cent hike in the rate. At no point was it flagged in any discussions in which we took part and is a bitter disappointment that we’ve been slapped with this tax hike on every traveller—Australian or international visitor—heading overseas.

This is a bill from a government that is always saying how it never increases taxes. Well, this is a tax increase on travellers, it is a tax increase on tourism, and it is a tax increase on holidays. This is an increase that impacts industries that are crucial to Australia's economic prosperity. The passenger movement charge is an entirely separate issue to working holiday-maker reform and should be treated as such. The original package did not touch the passenger movement charge.

In our economy's transition from the mining boom, we are going to depend on industries like tourism to provide Australians with jobs and prosperity. As the Queensland tourism minister noted recently, 'Tourism in Queensland is booming.' Her government has been working closely with the industry to achieve double-digit growth in tourism arrivals from overseas. This bill will no doubt hamper these efforts. In Tasmania, the state government has set ambitious targets for growth in the tourism industry. This bill will make meeting these targets more difficult.

We should remember this government's history in relation to the passenger movement charge. The Treasurer used to be a vocal opponent of increases to the passenger movement charge. Then there is the Minister for Trade, Tourism and Investment, a minister who, until recently, was a trenchant critic of increases to the passenger movement charge. In question time in the other place on 31 August this year, the member for Bowman asked him:

… how is the tourism industry supporting the transitioning Australian economy? Are there any policies that could put the growth of the tourism industry at risk in my electorate of Bowman and South-East Queensland?

The minister responded by boasting about how his government had frozen the passenger movement charge so that Australia was a more competitive destination.

We had the minister for tourism, the member for Moncrieff, saying that increasing the passenger movement charge was akin to 'choking the golden goose that is Australia's tourism industry' just weeks before his own government announced an increase to the passenger movement charge. The minister represents an electorate on the Gold Coast. As the Queensland minister for tourism has noted:

Brisbane and the Gold Coast had the largest international visitation numbers on record, reaching 1.17 million and 984,000 visitors respectively.

Overnight visitor expenditure on the Gold Coast reached a record $1.3 billion …

Given how important the tourism industry is to the electorates like that of the member for Moncrieff, it is unfortunate that his government was unwilling even to properly consult the industry on this issue.

So, here we are. After 18 months of dithering, after 18 months of uncertainty, the government have demanded that we accept their poorly thought out package without amendment. Their message is that it is all right for the government to take 18 months to sort themselves out and to keep the farmers, growers and tourism operators in the lurch for 18 months. But they demand that this parliament fall into line and then they expect this parliament to congratulate them. Well, industries like the tourism industry deserve much better than what they got in relation to this increase in the passenger movement charge. In their own words, they were completely blindsided for no reason other than this government was too discourteous to pick up the phone and engage in meaningful consultation with them.

We will oppose the Passenger Movement Charge Amendment Bill 2016. Given the effect it will have on Australian travellers and on our tourism industry, it deserves meaningful consultation and proper consideration. Given the alarming facts that have come to light about the absence of that proper consultation with the industry, given the absence of a full and proper debate in the House and given the effect that this increase will have on our tourism sector, this parliament should not allow this increase to the passenger movement charge to pass.

I foreshadow that, when the question is put on the second reading of these bills, the opposition will ask for the question to be divided to enable us to oppose the Passenger Movement Charge Amendment Bill 2016 whilst supporting the remaining bills at that stage, with support for further amendments from Senator Lambie.

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

This would have to be one of the most stupid pieces of legislation I have seen in this chamber—and I say this with a lot of passion, from the bottom of my heart. I really thought that the Treasurer, Scott Morrison, who I understand has been pushing this, even though a number of his party room have pushed back, would see the sense in compromise on this bill. I have really learnt a lesson in how stubborn our Treasurer can be.

This bill—the Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016—puts at risk our agricultural producers who need seasonal labour from backpackers. It takes money—penny pinching—from some of the lowest-income workers in this country, and it flies against what I would have thought was an obligation for us to treat all workers the same. This bill differentiates between foreign workers and Australian workers who are working side by side them and discriminates against foreign workers who we desperately need in this country. In the first week of the double dissolution I went and stood with agricultural producers in the Tamar Valley—apple growers who I have known for years and who I have had to go to as a small vineyard owner in the Tamar Valley to see whether I could get some backpacker labour for my own vineyard at harvest time.

This is an issue I feel very deeply about, and I understand its importance to the community in Tasmania and around the country; I really, genuinely do. When you are growing fruit, as an example, the biggest risk you face is agricultural risk. You need to get your fruit off when the time is right. Growers do not have any second chances. When they need to pick, they need to pick, and they need workers. All the big agricultural producers in Tasmania, in the Tamar Valley, have a policy of employing locals first. They always try to employ Australians first. But the truth is that, as is the case around the rest of the country, there is just not enough labour when it is needed urgently. Backpackers who choose to come to Australia on working holidays fill that gap. They are absolutely critical. Without the workers in these fields, on these orchards, these businesses will fail.

I have already heard some Tasmanian producers talk about potential litigation against the government—suing the government if they lose their crops in the future because they cannot find the workers. This tax, and talk of this tax, has gone through two elections—a double dissolution, two budgets—yet the government brings it to us now. They say they have compromised on 19 per cent. They say backpackers should all be paying 32 per cent. Well, that is actually not true. If backpackers elect to be residents for tax purposes, they do not have to pay 32 per cent on the first dollar they earn. If they meet the criteria to be residents for tax purposes, they pay the same rate of tax as Australians—zero per cent tax.

The easiest way to fix this is to amend the income tax bill of 1982 so that all backpackers, whether they elect to be residents or not, are residents for tax purposes. That means they pay the same tax as Australian workers when they are working side by side with them. They pay zero per cent tax on the first $18,000, and then they pay 19c in the dollar up to $32,000. That is the fairest, simplest way to fix this problem. And let me tell you, that is exactly what agricultural producers want.

I do want to take this opportunity to say that it has also been a lesson to me to see the National Farmers' Federation and other groups come into the Senate, come into parliament—you would think they were there to get a deal for agricultural producers, but it looks a lot more like they are there to get a deal for this government, for the Liberal-Nationals government, rather than for farmers. I have had a lot of feedback directly from producers as to how let down they felt by the NFF and other groups that purport to be representing them on this issue. It was very clear from the evidence at the Senate inquiry in Launceston that Tasmanian producers do not want a tax rate of 19 per cent or 32 per cent. They actually want no tax for the first $18,000, the same as Australians. That is what they want. So, why aren't we giving it to them?

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

That's right; of course they do!

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

The senator from Queensland, who purports to represent the bush—

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

Don't you lecture me on agriculture!

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

and called himself an 'agrarian socialist', in his first speech to the Senate, is probably one of the wealthiest men in parliament and he is not representing the agricultural producers in his state who do not want the government to take 19 per cent of the first dollar that backpackers earn when they are in their orchards. They come and work because it is lucrative for them to work in Australia. No-one is denying that. We are giving up our competitive advantage. Compared with New Zealand and Canada and other destinations, Australia is a lucrative place to come and work. And guess what? It is a lucrative place to send your money, Senator O'Sullivan, if you are a backpacker.

And that is what they do. They come to Australia for a holiday, they have a great time and hopefully they go home and tell their family and friends to come here as well. They do it as a working holiday where they also meet people, and they spend their money here, and they solve a critical problem for our agricultural producers, and that is getting labour when it is desperately needed. And they are hard workers—

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

And tourism.

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

and very important for tourism. So why are we penny pinching, trying to raise what is essentially a couple of hundred million dollars from some of the lowest-income workers in this country? What we should be doing—and let us be totally frank about this—is raising revenue by real economic reform.

We just debated and passed a super bill that will raise us some revenue. But, if we had actually taken more money off the super wealthy in this country that rort superannuation to pay their tax, we could have got billions of dollars more to help pay for services in this country and balance the budget. Instead, Senator O'Sullivan's National Party are trying to put agricultural producers at risk and take money off backpackers. How pathetic! How dangerous! This bill is stupid. It has been poorly thought through. It has been hanging around like a bad smell for 18 months—and it raises no money.

One agricultural producer who gave evidence in Tasmania said: 'If it ain't broke, why fix it?' Absolutely. Why are we supposedly fixing this system? Why are we changing the tax rates for backpackers? I can tell you why: it is because of this government's obsession with what they call deficit repair. I do not even buy that argument in this case, because they are virtually raising no money. They are taking money off backpackers who, on an average, earn $14,000 when they are in Australia, when what we could be doing is getting rid of the diesel fuel rebate that we give to the big, dirty mining companies in this country—$25 billion.

What we could be doing is making the deficit repair levy on the highest income earners in this country permanent. There are a couple of billion dollars that would well and truly cover our poor backpackers. What about other areas of significant reform where we could raise money? We could get rid of negative gearing and capital gains tax concessions that allow wealthy Australians to invest in real estate and not pay tax.

Senator O'Sullivan interjecting—

There is another $11 billion or $12 billion, Senator O'Sullivan. Why on earth are we trying to take money off backpackers? I cannot think of a good explanation—I really am stumped—except for the stubbornness of this Treasurer. I know, Senator O'Sullivan, from discussions with your side of the chamber, that a number of Liberals and Nationals do not like this bill. They are vehemently opposed to it. Yet here we are debating this bill with no compromise at all from the government.

We have taken a clear, strong, unambiguous position on this bill from the day it was raised. We said no to a tax on backpackers. We want backpackers to pay the same tax as Australians. A tax on backpackers puts at risk our agricultural producers, and it is not the way that we should be raising revenue in this country. We have never wavered from that position from day one. It is good to hear the Labor Party are considering amendments, but I have been disappointed with their stance on this bill as well.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

I have been very strong on this.

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

I am glad you are very strong on this, Senator Polley, because I had to work really hard to try and get Labor take a position on this during the double dissolution election. That, as I said earlier, was genuine and heartfelt, because I understand agricultural producers. I have worked with them in the past, so I know them well and I know how serious this issue is for them.

As Treasury spokesman for the Greens, it just does not make sense to me. It is not good legislation. It is really bad policy. It is a sad indictment of the government that you cannot sort out this kind of mess and that you are bringing this legislation to the Senate after very poor consultation. Every stakeholder we talked to, whether they were tourism stakeholders, in relation to the increased fee for the passenger movement charge, or agricultural producers—excluding the NFF, who are the cheerleaders for the National Party and the Liberal Party; we heard evidence from the producers themselves—want backpackers to be taxed at the same rate as Australians.

This brings us to the point: will the Senate vote for something like the Greens amendment, which simply amends the income tax amendment 1982 and makes it crystal clear that backpackers are residents for tax purposes. At the moment backpackers can self-elect to be residents or not residents when they leave the country, and that determines their tax status. Whether they are doing that correctly or not, is not investigated by the ATO. That is pretty much the evidence we heard. The ATO does not see that as a priority, because they hardly pay any tax anyway, and the ATO has no jurisdiction over them when they leave this country. They go back to their country. So the ATO made it very clear—unless Senator O'Sullivan's leader, Mr Barnaby Joyce, orders the tax department to crack down on backpackers when they are leaving the country and make the situation even worse for our reputation—the situation in this country is de facto that most backpackers will not pay tax on their first $18,000.

Senator O'Sullivan interjecting—

I will take that interjection. A number of these backpackers are legally residents for tax purposes.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

No, they're not.

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

They are. You could not provide the information from your side of the chamber—nor could the ATO—on how many backpackers were or were not legally residents for tax purposes, because there is no information. I gave an example, during a recent debate, of two Patagonian gentlemen who stayed on our family farm. They rented an old cottage from my mum and dad. They worked on the local strawberry farm. They were in Tasmania for nearly nine months. They went and climbed all the mountain peaks in the state because they are extreme mountain climbers. They had a year in Australia and they based themselves in Tasmania for nine months.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

A tax-free holiday.

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

They would be residents for tax purposes, under any of the box-ticking exercises the ATO makes you do. We would like to make it very clear, by changing the income tax amendment, that all backpackers pay the same tax as Australians. Are they on a tax-free holiday while they are here? That is Senator O'Sullivan's contribution to this debate. They pay the same tax as Australian workers. Australian workers, for good reason, if they earn less than $18,000, do not pay tax, because they are low-income earners who need our support. That is a progressive taxation system. Why should it be different for foreign workers, when foreign workers are paying Australian tax when they earn over $18,000. It is exactly the same.

That is our competitive advantage. Other countries do not offer that, Senator O'Sullivan. That is why backpackers come. Your stuff-up in this bill today is why backpacker registrations in Tasmania are down 40 per cent since you said you were going to introduce this legislation. You are the economic vandals. You love to point it out to us, the Greens, across the chamber but, seriously, you could not have stuffed this up any more than you have. This has been a total catastrophe, and I think you have lost an incredible amount of support in the bush, Senator O'Sullivan, over this legislation.

This brings us to the other amendments that will be before the Senate today. Senator Lambie will be introducing an amendment for a 10½ per cent tax rate. I have to be honest: I do not want to support a 10½ per cent tax rate, because I passionately believe that these workers should pay the same tax rates as Australians, but I know that a number of agricultural producers will accept that. And there is a good reason they will accept the 10½ per cent tax rate: it is still competitive with other foreign jurisdictions where backpackers can go and work, like New Zealand. Given the awful superannuation clawbacks, where backpackers get paid superannuation and when they leave this country the government takes 95 per cent back off them—the government is going to take off 95 per cent of the super these backpackers pay—that is a de facto tax increase anyway. That takes us to around 19 per cent, so the effective amount of money that backpackers are losing will be around 19 per cent. If the underlying rate is 19 per cent on top of these superannuation clawbacks, the effective rate is going to be a lot higher than 19 per cent. And these backpackers will do their sums. They will look at these things and they will choose to go elsewhere for their holidays. We lose in tourism; we lose in agricultural production. It is a lose-lose situation for this country. We raise bugger-all money—almost nothing in the scheme of things—and it distracts away from the important issues we should be dealing with in this Senate and this country, and that is raising revenue and tackling inequality—income inequality, gender inequality and age inequality. This is nothing but a distraction from the things we really need to be doing.

I would urge all senators in this chamber to take the strongest possible position on this legislation. Stand up for your agricultural producers, because Senator O'Sullivan and the National Party will not; stand up for the tourism industry; and reject the increases in the Passenger Movement Charge Amendment Bill. Labor are looking to split these bills up. The Greens see that as a very sensible thing to do. Reject the passenger movement charges, which put tourism at risk—another penny-pinching exercise by Mr Scott Morrison—and reject this backpacker tax, which will put our agricultural producers at risk.

God only knows this is not just a Greens senator standing up in this chamber and saying it. I know some of my colleagues will say it. This is, Senator O'Sullivan, the clear evidence we heard in the Senate committees when we went around the country. It is what I have heard from feedback. I have contacted every agricultural producer in Tasmania to raise this issue with him. I absolutely have.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

What a nonsense statement! Every agricultural producer—

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

And you would know!

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Order, Senator O'Sullivan!

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

Thank you. Some of us are here to represent the people.

An opposition senator interjecting—

Yes, that is right. Look at the Orange by-election. I think that the Nationals might have lost that for the first time in 45 years. You might get the idea that something is wrong and that you are not representing your electorate. It is the same with coal seam gas and fracking. It is the same with coalmining on farming land. It is the same with not fixing the beef levy, Senator O'Sullivan, which I hold you personally responsible for. The rot set in and it showed in your numbers. Here is an opportunity for you to stand up, cross the floor, Senator O'Sullivan, and get your mates in the National Party when the bill comes—

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Senator Whish-Wilson, I remind you that you are to make your remarks through the chair and not directly to senators in the chamber.

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

Thank you, Madam Deputy President. Through you, I remind Senator O'Sullivan: here is the chance to cross the floor and vote against this awful legislation. I will be bitterly disappointed, as will many Tasmanians and Australians, Senator O'Sullivan, if you do not cross the floor and vote against this legislation so that we can actually at least get a good deal in time for Christmas for Tasmanian and Australian agricultural producers. (Time expired)

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

Farmers all over the country will have just broken out in a big sweat when they think that the Greens are finally standing up to articulate matters that are in their interest. I will say that one of the features that come out of the contribution from the Australian Labor Party and their coalition partners, the Australian Greens, is of course that they leave the facts out. The story does not sound anywhere near as compelling when the facts are left out.

Senator Polley interjecting—

I am pleased that I have the attention of Senator Polley. Let's first of all debunk the story about our government introducing the backpackers tax. The facts of the matters are that in the 2012-13 budget, the best Treasurer the world has ever seen, Mr Swan, introduced the rate of 32.5c, which is now loosely referred to as the backpacker tax. So it is a Labor-Greens backpacker tax that we are dealing with. I am pleased to see that Senator Whish-Wilson fits the description of another senator here now who understands the Constitution better than the High Court, and we now have a situation where he understands tax rules and tax laws better than the Taxation Office and the Administrative Appeals Tribunal, who visited this question in 2015. This where this dilemma comes from. The Greens-Labor backpacker tax was tested in the—

Senator Polley interjecting—

Through you, Madam Deputy President, I know this is really inconvenient rhetoric for Senator Polley, but if you sit there quietly, kick your shoes off, throw your legs up and have a listen, you are going to learn something out of this, Senator Polley. Here are the facts: you introduced the tax at 32.5c, so it is a Greens-Labor backpacker tax, if you want to give it that name. In March 2015 the tax office took three matters to the Administrative Appeals Tribunal, where the question posed was whether these backpackers were residents of Australia. The Administrative Appeals Tribunal ruled that they were not residents and, therefore, they were subject to the 32.5c—

Senator Whish-Wilson interjecting—

I know that Senator Whish-Wilson often does not put as much research into matters as he ought to, but I am happy to help him, because I have put the effort in. It was the Administrative Appeals Tribunal that made the ruling that they could not—in the contribution made by the senator before me it was almost suggesting that if you are confronted with the form, and you are a foreign national, a backpacker from Panama or Patagonia—I do not even know where Patagonia is—confronted with a form asking, 'Are you a resident of Australia?' you would tick the box. On your version of events, that is all that needs to happen. In fact, that is inconsistent with the law. The law does not support your principle. I really think that people looking at the Hansard of your speech ought to do a little bit of due diligence themselves. I expected a bit more from someone who has been a banker. But of course the contribution was not being made by a banker; it was being made by a grape-grower who uses this labour on their farm and does not want them to pay any tax. You talk about a conflict when you made some reflections on me. But let's get back to the issue at hand. This was Labor's—

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Whish-Wilson, on a point of order?

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

Senator O'Sullivan just slurred me. It was unparliamentary. I do not know what conflict he was referring to there. I think he needs to clear the record on that.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

I do not believe there was a slur, Senator Whish-Wilson. It has been a wide-ranging debate.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

The donkey will continue to bray, to use your own words, as we are talking about slurs. Let's get down to the serious issue here. We have the Labor-Greens backpacker tax at 32.5c. We have a confirmation that the existing law of the land was to be followed by the Australian Taxation Office. That is supported by the Administrative Appeals Tribunal. That is the simple pathway by which we found ourselves where we were. What did the government do? The government of the day, with a great deal of support and energy from members of the National Party, which has been under attack here, went to industry. We eventually took 1,760 submissions. Let me repeat that for effect: 1,760 submissions from all interested parties right across all the sectors of tourism, service industries, agriculture, particularly in horticulture, and, in pockets, meat processing. We went to them all. I must confess that even if I had rung every agricultural producer in Queensland, I would not have said it because it would have been met with the incredulous disbelief that met your statement that you have somehow rung every agricultural producer in Tasmania. I know there are not a lot of people in Tasmania, but that statement was outrageous. For you to present to this place and suggest that somehow you have caucused every interested party in Tasmania diminishes your argument. It puts your argument under clear doubt.

What I can tell you—this is a matter of public record, and these submissions are available for you on the government website—is that we took 1,760 very well-made and comprehensive submissions from all those industries. As a result of that the government settled on a position. We settled on matters to resolve this. You know who the first one was to agree with us? The Labor Party's shadow Treasurer, at the Press Club. He was the very first one. If you have a laptop here today, whip it open and have a look: you have still banked 32.5c in your budget—Labor's budget. You have not put it down to zero, as Senator Whish-Wilson would want. You have not even put it down to 10.5c. You have it in there at 32.5c.

Senator Polley interjecting—

Senator Polley, when you make a contribution today, what you should do is say to the Australian people, 'We've had a big change of mind and change of heart: we're going to cut the billyo out of this $540 million that we have in our budget papers, online, today, contemporaneously,' and when the $370 million disappears from revenue, you tell them what you are going to cut out of your services or what other taxes you are going to provide.

Senator Polley interjecting—

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Order, Senator Polley!

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

When I get Senator Polley going without a breath, I know that I am right on the money. This is proving to be grossly embarrassing for our Labor-Greens coalition sitting opposite here, because this has been their problem. This remains a problem for you. It is not for us. After we have consulted industry extensively and had 1,760 submissions, we have settled on a very balanced and fair position for this backpacker tax.

Let me now made a point. I promise you this: if the sun sets today and this legislation has not passed the Senate, the tax rate is 32.5c. All of these industries that you all pretend that you are supporting, with your crocodile tears—I tell you what: I move around the bush of Australia a lot, and I have never cut the tracks of any of you. No-one ever said that you were at bloody Wagga Wagga, or you were up there at Chinchilla or Cunnamulla or Dalby or all the places where I spend my entire time. This is a very serious matter and I should not longer make light of my contribution.

Debate interrupted.