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Transcript of joint doorstop interview: Parliament House, Canberra: 8 November 2016: Labor's superannuation tax reform package; Labor's response to Government's backpacker tax debacle; 18C; Australian Human Rights Commission

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SUBJECT/S: Labor’s Superannuation tax reform package; Labor’s response to Government’s backpacker tax debacle; 18C; Australian Human Rights Commission.

CHRIS BOWEN, SHADOW TREASURER: Thanks for coming everybody. I’ll deal with two matters before handing over to my colleagues, Anthony and Joel. Firstly on superannuation. Of course the Government went to the election promising a retrospective half a million dollar cap on non-concessional contributions. They then thought they’d solved the issue by changing it to a $100,000 a year cap.

Now the Labor Party has considered this and we are proposing a range of improvements to superannuation policy which are better for the Budget bottom line and are fairer. We’ve announced those today, including making that cap $75,000. All the evidence shows us that only people on very high incomes are able to contribute around $100,000 a year extra. A $75,000 cap will be better targeted and better for the Budget. In addition we are confirming the policies that Bill Shorten announced at his Press Club Address earlier this year which would improve the Budget bottom line in total as part of the superannuation package by $1.4 billion over the next four years and more than $18 billion over the next decade.

Now it’s up to the Government whether they accept this offer, but it could pass the Parliament very quickly. Of course if the Government doesn’t accept the offer, they will be policies we take to the next election and will be reflected in our Budget bottom line.

Backpackers tax. This is perhaps the worst example of bad policy making that this Government has presented us. Originated by Joe Hockey, perpetuated by Scott Morrison. No consultation and ill thought-out. Now the Government thought that they’d solved the issue and wanted praise for changing the backpacker tax rate to 19%. We thought this needed proper consideration by Senate Inquiry and that was the right decision because the Senate Inquiry showed that Mach II is not very much better than Mark I.

There is a broad consensus that the rate of 19% would make Australia uncompetitive. A rate of 10.5%, matching New Zealand’s rate, would be a competitive rate for Australia. So we are prepared to be reasonable and responsible and we will support a 10.5% tax rate for backpackers, working holiday makers in Australia. We will move that in the Senate and of course support other amendments in the Senate to achieve the savings.

I want to thank the Labor Senators on the Inquiry; Chris Ketter, Jenny McAllister, Catryna Bilyk, Helen Polley for their hard work in examining these issues. It is very clear that the Government had not done its homework. To have the backpacker tax raise money, you have to have backpackers in Australia and the Governments proposals are already driving backpackers away from Australia. As I’ve travelled around regional Australia, as Joel certainly has, and Anthony, it has been very clear to me as late as last week in Cairns, that the Government’s Mark II proposal was not receiving community support, business support. The Liberal Party is meant to understand business, the National Party is meant to understand regional Australia and they are understanding neither.

In addition, the Labor Party went to the election promising no increase in the Passenger Movement charge. The Liberal Party had the same policy. Just a few weeks after the election, they scrapped it. They might be prepared to scrap their commitment not to increase the Passenger Movement charge during this term, we are not. We will oppose this increase in the passenger movement charge which is already high by international standards, second highest in the world and the highest in the world for short haul journeys and we will prosecute that case in the Senate as well. We will be happy to answer questions but first I will ask Anthony to add to my remarks and then Joel.

ANTHONY ALBANESE, SHADOW MINISTER FOR TOURISM: Thanks very much Chris and Joel. I want to comment particularly on the impact of the Government’s proposals on the tourism sector, because the backpacker tax has an impact particularly on the agricultural and the tourism sector. At tourism round-tables that I have held, places like Cairns, Alice Springs and Darwin, since the election have seen the backpacker tax and the impact particularly, in places like the Northern Territory of the backpacker tax on the tourism sector which is seasonal in common with agriculture have a real impact already.

Joel will talk more about the backpacker tax in particular but the Passenger Movement charge increase came from nowhere. There was no consultation. It mirrored the

backpacker tax fiasco, which was an announcement and then phone calls to the tourism sector to inform them of the impact of that announcement.

Now this comes in a context of two weeks earlier, the Tourism Minister Steve Ciobo, at least now they have a tourism minister in this term standing up in the Parliament and referring to increases in the passenger movement charge as “choking the golden goose of the tourism sector”.

Indeed the tourism sector employees one million Australians. It is increasing in terms of a percentage of the economy substantially, and the growth in the tourism sector is around about four times the growth of our economy at the moment. So this is a super sector. It has been identified by Deloitte, and other sectors have looked at where our growth will come from, as being a key sector and yet what we have is this increase that would make us, we are currently the second highest charging in the world, but we are the largest with the exception of the long haul trips from the United Kingdom.

So there is no justification that has been put forward. When we sat down with Treasury officials we were told that no modelling had been done on it. Again bad policy not thought out, no consultation and quite contrary to what both sides of politics promised prior to the election. So we won’t be supporting an increase in the passenger movement charge, in this term. We think that it’s bad policy, and we think that it’s been underlined perhaps just how bad it is by the, quite frankly, cringe worthy performance of Stephen Ciobo, the Minister, in London, in a railway station, with a reality TV star from the United Kingdom, with London actors playing Australian surfers, with sand poured on a railway station in London to try and encourage tourists to come to Australia. I mean you couldn’t make it up. After the ‘where the bloody hell are you’ debacle, presided over by the current Treasurer, Stephen Ciobo has jumped the shark and made it even worse.

Well we will be saying no to the passenger movement charge and telling the Government that it needs to treat the tourism sector with a little bit more respect, and needs to regard it as something that’s not just a cash cow.

JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES AND FORRESTRY: I thank Chris, Albo and of course Bill Shorten for their support in addressing this very bad piece of public policy. 18 months ago backpackers were already starting to fall away from Australia. Why? In part probably because of the strength of Australian dollar, maybe because stories were starting to circulate in and throughout Europe about the exploitation of backpackers here in Australia, but whatever the case they were falling away. So the Government had a great idea, it would put a tax on backpackers for the first time. Now it’s obvious from that point given the spectre of that tax coming in, effected our international competitiveness and had a very poor, bad, impact on both the agriculture and tourism sectors.

For the last 18 months we have been pushing back. Fighting to get a better deal for farmers and fighting to get a better deal for tourism operators. It has not been easy to

come up against a degree of resistance. We’ve seen Barnaby Joyce’s spin at its best. I do give him credit for some things, spin.

Now you’ll recall that when Malcolm Turnbull replaced Tony Abbott, Barnaby Joyce claimed to revisit the coalition arrangement. He claimed that he had locked in a referendum on same sex marriage, but why didn’t he lock in a better deal for our farmers? Why has Barnaby Joyce been prepared in terms of budget repair, prioritise the big end of town with the big tax cuts, at the expense of our farmers. He’s got a lot to answer for. It’s pretty clear that 19 is no better than 32.5 and in the Senate as a team we will continue to fight for a better deal for our farmers.

JOURNALIST: Mr Bowen, that 10.5% is going to triple to 32.5% which is presumably in the Government’s best interest because they can bank that half a billion dollars in savings, aren’t you just setting the Government up for a win here?

BOWEN: The pressure is now well and truly on the Government. Firstly, the Government as a whole. They can pass this legislation now quite quickly, with our support, 10.5 percent and provide certainty to the sector. I mean they said they wanted certainty and they asked us not to hold a Senate inquiry, well if they really want certainty, they’ll accept these amendments and it can pass both houses. Secondly, the pressure is now on the National Party in particular. Now, I learnt a long time ago not to predict what happens in the Senate, but the early signs would be good, that there’s enough support to get 10.5 per cent through the Senate. That means, it will go back to the House of Representatives, and National Party MPs will have the choice whether they support 19 per cent, or do they support 10.5 per cent and they will need to explain to their electorates, if they vote for 19, why they do. We will be asking them to vote for 10.5 per cent and the pressure is on individual National Party Members of Parliament, and we will be pointing that out.

JOURNALIST: Mr Bowen, what’s the fiscal impact of the passenger movement charge and is one of the reasons you’re talking about the Budget savings in super so you can offset…

BOWEN: It’s not a direct offset Phil, the cost is $260 million for the passenger movement charge and $205 million dollars for the 10.5 per cent rate, presuming the Government doesn’t change position of course. While there’s not a direct offset, you are right to point out that I’m making two announcements today. One improves the budget line by $1.4 billion dollars, so we are net ahead in our announcements today. We are being extremely fiscally responsible in our approach to all these matters.

JOURNALIST: Mr Bowen why didn’t you tell voters before the July election that your plan for superannuation was to raise $4.5 billion as opposed versus the Government’s plan which was $3 billion which is what you booked. Didn’t you tell voters one thing before the election and then reveal a different plan afterwards?

BOWEN: Well what I’ve just said David, is that we will take these plans to the next election if the Government doesn’t adopt them, so we took a very comprehensive policy on superannuation, we led the debate on superannuation for the last two years. The Government’s changed their mission post-election, that’s their right, that doesn’t mean we have to automatically agree with every element of it. They’ve introduced a $100,000 cap, we think that’s a bit too generous. We think it should be $75,000. We’ve responded to the change in policy of the Government. If the Government changes its policy, either we have to consider our position, that’s exactly what we’ve done, we’ve taken our time. Remember when the Government came out breathlessly and demanded our support immediately without even showing us the legislation. So we’ve taken a bit of time and made a better proposal.

JOURNALIST: So this is not the policy you would have adopted had you won the election?

BOWEN: Well we didn’t win the election, we’re dealing with the circumstances being presented to us by the change in government policy.

JOURNALIST: You said there is broad consensus, is that what you’re basing the Senate Committee on and is there a comparison to New Zealand? Australia pays higher wages then New Zealand.

BOWEN: I think there is a comparison to New Zealand. Backpackers look at headline rates, and consider a whole range of circumstances of course, to their choice of which country to travel to but tax rates are one of them and if we have exactly the same tax rate in effect, we think it makes us competitive.

JOURNALIST: New Zealand has a tiered system do they not?

BOWEN: New Zealand doesn’t have a tax free threshold so there is a difference of approach. You pay 10.5 from your first dollar in New Zealand and backpackers by large in Australia don’t reach the tax free threshold. The average backpacker earns less than the tax free threshold hence the need for this backpacker tax and we do accept that. We think 10.5 per cent is a much better rate. The pressure is now on Scott Morrison and the Government to do the sensible thing and accept the consensus and see it pass the Parliament quickly. If he won’t the National Party should.

JOURNALIST: With the consensus, who have you spoken to who is on board? We spoke to Jacqui Lambie this morning who wants 10.5. Who else?

BOWEN: A wide range of consultations and Joel can talk more about the particular groups that we have consulted. Certainly as I said in my travels around Australia, it has come up with my meetings with tourism operators. What tourism operators and business understands is that yes backpackers are required for Labor market purposes. They then spend what they earn in that town and they promote tourism. When I was talking to the tourism operators in Cairns on Thursday and Friday, they were very concerned and asking us not to support the 19 per cent rate. For example not so much

because of their Labor shortages, but because the backpackers, having earned their money, they then go and spend it on tourism and they are noticing a very severe impact. Before I go to your question, I will let Joel add to who we consulted.

FITZGIBBON: Three tiers there. I have been inundated by growers from in particular places like Tasmania. I thank my Labor representatives and Senators who have been very active on this issue and people like Luke Gosling in the Northern Territory as well and of course Cathy O’Toole in Herbert. Growers continue to call me and write to me insisting we help them here. They are telling me they are going to have fruit rotting on the trees if they don’t get a solution to this and a sensible outcome. Now collectively almost now they are saying 19 is too much. Here in the Parliament of course in the Senate I expect, I do follow Chris’ counsel, but I’m more sure about what will happen in the Senate. I think the Coalition will find itself stranded defending a 19 per cent tax. Like us, the minor parties have had the same feedback. 19 per cent is going to be a big problem still for both the agriculture sector and of course the tourism sector. Can I just add to an earlier answer on what happens if things get difficult in the House of Representative or indeed the Senate. This is typical bullying from Barnaby Joyce. Barnaby Joyce is now holding a gun to the head of the agriculture and tourism sectors saying you vote for 19, you vote for increasing the tax from zero to 19 or we will give you 32.5 per cent on January 1. This is typical bullying on Barnaby Joyce’s part and we are not going to stand for it. We are not going to roll over to it. We are going to continue to stand and fight for farmers and tourism operators.

JOURNALIST: On exactly that point, there isn’t exactly a consensus in the Senate at this stage. The Greens haven’t committed to 10.5. If the amendment fails, are you ruling out supporting 19 per cent or would you reconsider?

BOWEN: I am confident that the amendment will pass.

JOURNALIST: If it doesn’t?

BOWEN: I am confident that the amendment will pass.

JOURNALIST: If it doesn’t will you reconsider?

BOWEN: We are working on the basis, we believe the best outcome is 10.5 and I am more optimistic than you are. Of course we have been in communications with the cross bench and I am optimistic it will pass the Senate.

JOURNALIST: How do you think that optimism translates for farmers though who are looking at new tax arrangements coming in on the first of January in the middle of their harvest?

BOWEN: I can tell you, farmers prefer 10.5 over 19 every day.

JOURNALIST: How can you say you are standing up for farmers though when you are quite clearly playing politics with this? You have thrown the gauntlet down to the National Party. If it doesn’t get through there is a chance it will stay at 32.5 per cent. If 10.5 per cent is the right rate, why has it taken you this long to come out and say where you stand?

BOWEN: We have been through a proper process of consultation unlike the Government who has botched it without consultation. We took our time through a Senate Inquiry and we said a Senate Inquiry with a few weeks duration was worth it to get it right and I’m glad we did because the evidence before the Senate Inquiry, I think was pretty overwhelming that 10.5 was a much better rate than 19. It’s competitive with New Zealand and other countries with whom we compete for backpackers and is the better outcome. Parliament House is a political building, but we are proposing a better policy and are asking the Government to support it in the interest of better policy and in the interest of certainty.

ALBANESE: And the point has to be made as well, that prior to Joe Hockey's announcement, the rate was zero. The rate was zero.

JOURNALIST: Why does (inaudible) say it was 32 per cent?

ALBANESE: That is not right. Prior to Joe Hockey's announcement and you go back and have a look at the announcement, they spoke about an increase for the first time, they would be getting revenue. That was the basis of this policy change. So we have been consistently critical of them not thinking through the impact of this. There isn't a tourism operator in Australia that I've met with, right around, particularly around the regions.

I attended last week the Australian Regional Tourism Network national conference. It was held in Roma in western Queensland in the seat of Maranoa. The Coalition didn't bother to send anyone. Didn't send a Minister, didn't send the Parl Sec, didn't send the local member, just didn't participate in it.

And I assure you there, all of the regional tourism operators, just like the agricultural sectors on the ground, are very hostile to the Government's actions on this.

JOURNALIST: Will you take responsibility if backpackers end up paying 32.5 percent?

FITZGIBBON: Why would the Labor Party take responsibility for that?

JOURNALIST: If the Opposition...

FITZGIBBON: Hang on; 18 months ago this was zero. This is their tax, they introduced this tax. By the way, they managed to defer it during an election campaign. The Government of the day decided to defer this prior to the election campaign to have themselves re-elected. This is their tax; the outcome is on their head. They should join

the overwhelming majority, the overwhelming majority, of growers, farmers and tourism operators; join with us in backing a more sensible tax rate.

JOURNALIST: Malcolm Turnbull's confirmed plans for an enquiry into free speech; what in your view should that enquiry investigate and do you absolutely rule out any changes to section 18C?

BOWEN: Well, Malcolm Turnbull just a little while ago said that this wasn't a priority for him. Now all of a sudden it's a priority. I'll tell you why it's a priority for him; because the extreme right wing of the Liberal Party has told him that it is. And it's just the latest of a long line of examples of Malcolm Turnbull who is not in control of his own Government. He is doing the bidding of others, and, it is it any wonder that so many Australians are so disappointed in this man who offered so much hope just a bit over twelve months ago.

Now Malcolm Turnbull can engage in this process if he wishes. We see it - I agree with the old Malcolm Turnbull - this is not a priority for the country. I also agree with the old Malcolm Turnbull that in Australia you do not encourage or allow a situation where you can humiliate people on the basis of their race. And that this is a law that has been in place now for many decades and now all of a sudden the extreme right wing of the Liberal Party has decided all of a sudden that it's a priority, well Malcolm Turnbull can sing their tune. We are not obliged to.

JOURNALIST: What about the Human Rights Commission? Because Gillian Triggs has to call up some of these frivolous claims. She's not responsible for the QUT students going to court but...

BOWEN: I'll leave Mark Dreyfus to comment in more detail, obviously, but I've seen her comments today. She has very clearly said that Malcolm Turnbull has misrepresented the situation and I'll leave it to you to judge whether that was accidental or deliberate. It's part of a broad pattern of course of this Government treating independent statutory office holders with contempt, whether it's the Solicitor-General or the Human Rights Commissioner, or indeed although they're not independent statutory office holders, the three departmental secretaries that they sacked on coming to office in breach of 114 years of tradition. These guys do not believe in the proper conventions when it comes to independent office holders.

JOURNALIST: We've seen (inaudible) with Russell Broadbent criticising George Christenson over race-hate speech. Do we call on others to speak up about (inaudible)?

BOWEN: Well I think I'd go as far as to say Russell Broadbent is a man of integrity, who has the respect of both sides of the Parliament and I commend him for having the courage of saying what was in his heart. I think that showed considerable courage. It's quite clear the Liberal and National Parties are very divided. You've seen other Liberals coming out today condemning the proposed enquiry into 18C but as far as Russell Broadbent goes, I say good on him.