PRESS CONFERENCE, CANBERRA, WEDNESDAY,9 NOVEMBER 2016

SUBJECT/S: Backpacker tax

E&OE TRANSCRIPT
PRESS CONFERENCE
CANBERRA
WEDNESDAY, 9 NOVEMBER 2016

JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: I see the Minister has been out here again spinning his lines on the backpacker tax. Just let’s go through a little bit of history here and be clear on the law. In 2015 the Tax Commissioner became concerned backpackers were claiming the tax free threshold by ticking the box that declares them residents for tax purposes. The Commissioner was sceptical about this as they didn’t look like residents and had no lease arrangements for example like many other visa holders and he decided, having gone to the Administrative Appeals Tribunal, that they would be denied residency for tax purposes.

Now that meant from July 1 last year they would have faced a 32.5 per cent tax. Now the Government could have immediately fixed that. But they decided not to. They could have changed it by legislating to change the definition and could have put in a zero tax rate and could have put in a 10.5 per cent tax rate, but they saw the dollar signs and they saw that Treasury was estimating that if they stuck with the Commissioner’s ruling they would earn $540 million dollars over four years. They thought they could sell this as a levelling of the playing field - we’re just making things fairer for Australian workers and will get $540 million as a bonus. They were sorely wrong. And of course the agriculture and tourism sectors went spare, understandably. Then in the middle of an election campaign, they decided they would defer the tax. Now this is within their power. Once the Government makes an announcement of Government, that allows the Commissioner for Taxation to defer his decision. So he deferred it to January 1. That allowed Barnaby Joyce to go throughout the election campaign saying don’t worry, we will review this and of course in doing so he was implying he would eliminate the backpacker tax after the election. That’s what he was implying but at the same time he was spending the $540 million throughout the election campaign.

Two weeks ago this bill was the most urgent matter ever before the Parliament. So urgent they introduced it in the House and they parked it. Then when they finally brought it back to the House we gave it expeditious passage through the House, even though we had concerns. We said we will send it to a Senate Committee but we will let it through the House now to speed things up. They complained about the Senate Committee and said it was holding the bill up. Well hang on a minute, really? We still have two full sitting weeks before Christmas and the committee is reporting today and there is plenty of time to deal with this matter. The committee process did not hold this bill up one day whatsoever. The bill could be in the Senate being debated today. The bill could go through the Parliament this week. We are insisting on 10.5 and the Government should join with us.

Why 10.5? Well it’s because it’s the equivalent of the New Zealand rate. Now all this rubbish about - we have a higher rate here is just that. Backpackers in Europe know already they have been done over. They just see the headline rate, they don’t take the calculator or the slide rule out to work out what the award rate is in Australia and what the backpacker tax rate is, they just know the Australian Government for the first time is hitting them with a tax rate and a tax rate greater than that they will be hit with in New Zealand.

There was a great quote from a provider of backpacker labour in the papers this morning where the spokesman said quoting a French backpacker who said, all our mates at home are not coming now because they have been told they have been hit with this 19 per cent and I’m telling them to go to New Zealand instead. It is the headline rate that matters. All this rubbish about Australians being at a disadvantage is just that. Backpackers will be paying 10.5 per cent if our amendment is accepted from the first dollar they earn here. It is for that reason that they will always be paying more tax than any Australian who may or may not have gone through the tax free threshold. Minister Joyce has given up the argument about backpackers. He’s given up the argument about tax. He has even given up defending farmers. He is suddenly has morphed into the champion of workers’ rights. No one believes this. He has moved on to another subject because he has lost the backpacker tax argument. He knows he is destroying farmers. Let me tell him this. Today around the country major banks are stress testing the horticulture sector. They are stress testing the farmers they have on their books who rely on backpacker labour. These are the things Minister Joyce does not consider nor does he consider any of the evidence that went before the Senate Committee. None of the evidence whatsoever, where we learned of course that no economic modelling was done here to determine the impact of the backpacker tax. Not the original 32.5 nor the 19 per cent. Barnaby Joyce needs to put his dummy back in his mouth and come with Labor and the crossbenches and back 10.5. If he does so, we will have this thing appropriately done and dusted well and truly before Christmas.

JOURNALIST: This whole saga is causing enormous distress for farmers who just want both sides to get on with the job. Are you guys going to sit down anytime soon and figure it out a way forward?

FITZGIBBON: Have you ever attempted to have a sensible policy discussion with Barnaby Joyce? Really? It’s a pretty clear choice here. This is the Government’s tax, the Government’s initiative. They could have fixed this 18 months ago by simply legislating a different rate. They chose to take the revenue. Remember, they say this is about budget repair. They are going to give $50 billion of tax cuts to big business and it’s going to be paid for at the expense of Australian farmers. Their priorities are all wrong.

JOURNALIST: If you are serious about supporting farmers and that you are doing it for them, why are you not putting the politics aside and Labor attempt to find a compromise between 10.5 and 19?

FITZGIBBON: Are we going between 10.5 and 19 now? Well, Barnaby Joyce hasn’t called me about going somewhere between 10.5 and 19. I am more than happy to have a discussion with Barnaby Joyce or indeed Scott Morrison but no such proposition has been put to me. From day one I have only had one objective and that has been to restore Australia’s international competitiveness. If someone can show me that our international competitiveness can be restored at a different rate, I’m more than open to the conversion and so is Bill Shorten, so is Chris Bowen and so is Anthony Albanese.

JOURNALIST:  To be fair, before yesterday you had never given them a rate to start a compromise on.

FITZGIBBON: Because I did not want to be plucking figures out of the air which is the habit of the Government. They have the Treasury and the Tax Office behind them and they have the capacity to model. For 18 months I have been saying - give us the rate that restores our international competitiveness, if there is one, because I will remind you backpackers were falling off before the backpacker tax was ever announced. Did they address those labour force issues? Did they undertake a study to determine on how we might repair that problem? No, instead they introduced a tax for the first time that made the situation worse.

JOURNALIST: If the 10.5 per cent tax rate passes the Senate it goes to the House of Reps where you will probably need, presumably one of the Nationals MPs to cross the floor. How likely do you think that will be given problems within the electorate?

FITZGIBBON: Well I am far more interested in fixing the Government’s problem than I am on playing games on the floor of the House of Representatives. I am far more interested; however, I would be very surprised if the crossbenchers don’t support a lower rate because they understand this is hurting farmers. Andrew Broad, George Christianson, Michelle Landry and the list goes on - they will have a decision to make. Their farmers are telling them that 19 per cent is too damaging. Some of whom I have spoken to by the way, who are stress testing horticultural enterprises today know 19 per cent is too high and that is why they are stress testing them. Andrew Broad, George Christianson and others know this and they will have a very tough decision to make when this bill comes back to the House of Representatives. They can vote for 19 and desert their farming communities, or they can come with Labor and back the 10.5 per cent and do the right thing. I have to say, 10.5 per cent, given backpackers were already falling off, is not the ideal solution either but it is the same headline rate as New Zealand and sends the right signal to backpackers and it is a hell of a lot better than 19

JOURNALIST: If 10 is not right, then why not back the Greens who want to keep the tax free threshold?

FITZGIBBON: Well the Greens have a very strong view on this. What I am trying to do is what Barnaby Joyce is accusing me of not doing. That is meeting the Government half way and trying to come up with a sensible compromise and proposition which will give Scott Morrison and Barnaby Joyce the revenue they so crave for but also take some of the pressure off our farms. 10.5 just proves we are having a negotiation and are trying to be cooperative. Might I say, I am glad Brian Mitchell is here with me. If you go down to Tasmania today, you will find farmers seething about the prospect of not only 10.5, but what they see is a rape and pillage of the superannuation earnings of backpackers. Now we have had concerns about super as well. Why haven’t we gone there? We are trying to make this as easy as we can for the Government. If we can just get the rate down to a more sensible level with the New Zealand rate, then we think farmers and growers in particular can get on with life. I thank my Tasmanian colleagues. They have been great throughout this fight. Like me, they don’t want the political games and are not interested in that. I’m happy for Barnaby Joyce to have his political win. We just want to do the right thing by these growers.

JOURNALIST: Is there a danger for the Tasmanians though that Labor could be seen to be led by the nose by Jacqui Lambie?

FITZGIBBON: No danger. Tasmanians are very sensible people and they like solutions to problems. This is a problem of the Government’s making and they like the fact that Labor in Tasmania is working hard to find a sensible compromise and a solution to those problems.

JOURNALIST: What do you say to Joyce’s claim that for Labor to do the honourable thing, they should just get the honourable thing, they should just get the 10.5 per cent rate to the election.

FITZGIBBON: Barnaby Joyce, I mean it all gets lost in translation. 32.5 per cent was Barnaby Joyce’s decision. Barnaby Joyce decided to take the $540 million and run. 19 per cent was Barnaby Joyce’s decision but farmers and growers are still telling us that it is going to hurt them very badly. They can’t wait for the next election. In fact they should not have waited for the last election. I said countless times throughout the last election through the radio airwaves mainly, drop this tax now, give up the $540 million and you will have Labor’s support. Guess what? he didn’t give it up but he did play the light of hand. Oh we will have a review implying he would change it after the election. Well he did change it after the election but nowhere near enough to save the farmers that are going to be so adversely affected.

 


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