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Thursday, 10 November 2016
Page: 2461


Senator WHISH-WILSON (Tasmania) (12:24): First, I would like to raise a process issue. The Greens were not consulted about this today. We had no idea this was coming on. Obviously, we have been out there campaigning on this issue—before every other political party was, by the way. Nevertheless, we do agree that it is important to get some certainty for agricultural producers. We do agree that a potential deal is on the table here for agricultural producers and for backpackers, and we believe it will be accepted by the agricultural community. Senator Lambie has raised publicly a 10½ per cent tax rate that would allow us to be competitive with New Zealand. We would also like to see the superannuation clawbacks removed. However, if they were not that would still get local agricultural producers to around an effective rate of 19 per cent.

Our view has been very simple from the start. The very first thing I did during the double-dissolution election was to go out to the Tamar Valley to call a press conference and stand with agricultural producers—fruitgrowers, in this case. I said to them, 'You need to stand up on this issue now, during the election. This is when you're going to have the most leverage to actually get an outcome on this issue.' Their point is simply, 'If it ain't broke, don't fix it.' Their situation is that they have a competitive advantage over other countries to attract a pool of labour that is desperately needed.

Senator Xenophon, I do not agree with you on this issue. It is important to try to get those social security recipients into meaningful work if that is what they choose to do. However, let me tell you: you obviously have not been out to talk to agricultural producers. Nearly all of them have a policy to employ locally first, but they simply cannot get the pool of labour they need—the seasonal labour they need—at the right times. It is absolutely essential that that pool is filled by backpackers when they are here in this country. With my small vineyard in Tasmania I have used backpacker labour. I know how essential it is. Whilst the policy you are proposing may take some time to implement, if it works it is a positive. But it will not solve the situation now, I guarantee it. You are out of touch with what agricultural producers want. They want some certainty on this.

The easiest way to solve this problem would be for the Senate and the lower house to amend the Income Tax Act 1982 and make it certain that backpackers, while they are here in Australia, are residents for tax purposes. That means they pay the same tax as Australians. That means they pay no tax on their first $18,200. This is the most important point in this debate. At the moment a backpacker can elect whether they are a resident for tax purposes. The test for that residency is available for every backpacker to have a look at. The government, including Senator Duniam, is going around and saying that all backpackers will pay 32 per cent tax if this legislation does not pass. That is false. The ATO are on record saying at the Senate inquiry that that is false. Many backpackers—unfortunately, we do not know how many because no-one has ever looked at this—are residents for tax purposes when they are in Australia. I gave an example at the Senate inquiry of two Patagonian workers who rent the cottage on my family farm. They base themselves in Tasmania for six months and they work at the Hillwood Berry Farm. They are passionate rock climbers and they spend the whole year in Tasmania climbing mountains, but they work out of a single place. To all intents and purposes, they are residents and they pay no tax. They are just one example. The government is going out there and scaring people. The government has gone from telling bulldust one day to playing the xenophobia card the next day. They went straight to fearmongering. That is the last refuge of the scoundrel.

This tax is a stupid idea. It is not trying to fix a broken system; it is simply penny-pinching revenue raising when there is so much more we could do in this country to raise revenue. This is not wanted at 19 per cent or at 32 per cent by the agricultural sector. We can find the money elsewhere. I urge the Senate to reject the government's tax and actually get a result today that will fix the problem. Then we can move on to more important matters, like how we are actually going to raise some serious revenue to pay for the services we need in this country and help balance the budget.

The DEPUTY PRESIDENT: The motion we are looking at is the amendment moved by Senator Gallagher. Is the amendment agreed to?