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Wednesday, 23 November 2016
Page: 3023


Senator WHISH-WILSON (Tasmania) (12:14): 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?

Senator O'Sullivan: That's right; of course they do!

Senator WHISH-WILSON: The senator from Queensland, who purports to represent the bush—

Senator O'Sullivan: Don't you lecture me on agriculture!

Senator WHISH-WILSON: 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—

Senator Polley: And tourism.

Senator WHISH-WILSON: 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

Senator WHISH-WILSON: 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.

Senator Polley: I have been very strong on this.

Senator WHISH-WILSON: 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

Senator WHISH-WILSON: I will take that interjection. A number of these backpackers are legally residents for tax purposes.

Senator O'SULLIVAN: No, they're not.

Senator WHISH-WILSON: 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.

Senator O'Sullivan: A tax-free holiday.

Senator WHISH-WILSON: 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.

Senator O'Sullivan: What a nonsense statement! Every agricultural producer—

Senator WHISH-WILSON: And you would know!

The DEPUTY PRESIDENT: Order, Senator O'Sullivan!

Senator WHISH-WILSON: Thank you. Some of us are here to represent the people.

An opposition senator interjecting

Senator WHISH-WILSON: 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—

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

Senator WHISH-WILSON: 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)