SUBJECT/S: Turnbull Government’s back down on the Backpacker Tax.

HOST:  As mentioned earlier the Government has announced major concessions on its Backpacker Tax today; lowering the rate for backpackers from 32.5 down to 19 per cent, as was originally proposed 32.5 per cent anyway, a number of other changes as well, and to pay for all this an increase in the Passenger Movement Charge for tourists, and Australians wanting to travel internationally, to go up by $5 to $60 every time you want to enter the country.  So tourism sector not happy, farmers are happy, what about Labor?  Shadow Agriculture Minister Joel Fitzgibbon joins us this afternoon.  A very good afternoon to you.  What do you think about this compromise outcome?

JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: Well can I start by asking you a question David?  I see you had Senator Carvarvon on, I missed him, did he do what Barnaby Joyce has refused to do?  And that is, apologise to the agriculture sector.  This has been hurting now for more than a year.
HOST: He did not apologise. No.
FITZGIBBON: He did not apologise.  They took the tax from zero to 32 overnight without any consultation or involving anybody in the sector to test its effects.  And today he is announces he is almost halving the tax and he wants everyone to be thankful. Well they are certainly not thankful in the tourism sector. And of course he has been on the phone to leadership in the agriculture sector saying, look if you don’t back this in you will end up with the 32 percent taxes first proposed.  Of course people are being welcoming of it, but what he hasn’t told us is whether or not 19 per cent leaves us internationally competitive, that’s the big question here.
HOST: We need to remember Joel Fitzgibbon that Labor backed in the amount of money this would raise in your election costings.
FITZGIBBON: David, ten times throughout the election campaign at least, I sent the call to Barnaby Joyce:  you announce the abolition of the tax today and you will have Labor’s backing and he chose not to do so.  They can’t have it both ways.  They can’t ask us to be fiscally responsible and do some of the heavy lifting on budget consolidation and at the same time hit us up on this stunt.  What they were doing was trying to book the $540M and deny us that money.  We were ready each day throughout that campaign to back the abolition of this tax.
HOST:  But you were also willing to take the money it would raise, and that is the point here, and you can’t say that right across the board with other policies, on this one you said you would support that revenue.
FITZGIBBON: What we weren’t prepared to do was let them get away with walking both sides of the street, indicating falsely to the sectors affected that  - don’t worry, after the election we will sort this out – while at the same time spending $500M of revenue in election promises.  That’s what we were trying to stop them from doing.
HOST: Alright.  Where are we at now?  Nineteen per cent.  Let’s start there.  Basically you are saying that you want to make sure that is internationally competitive.  The Treasurer did seem to indicate today it would stack up well with similar arrangements in the US and Canada.  How will you make the call on that one?
FITZGIBBON:  Well let him release the modelling David. Whether it was modelling done by Deloittes or indeed by Treasury.  You and I have had a couple of conversations about their refusal to release the Cost Benefit Analysis on the mad relocation of the APVMA to Barnaby Joyce’s own electorate.  The only way we find out whether this allows Australia to remain internationally competitive is for them to release some information.  Now if they have got modelling, they should release it.  Because, you know, think about it David, two young people in London are talking about going to Australia, Canada or New Zealand, and one says: guess what, the Aussies have announced they are putting in place a new tax.  The second person doesn’t necessarily ask what the rate is David, they get the message – Australia no longer wants them.
HOST:  But there has got to be a tax here.  With the tax-free threshold being lifted by Labor under the carbon tax arrangements there would have been a lot of backpackers no paying a cent and that’s not fair.
FITZGIBBON: Nice try Barnaby Joyce. This has got nothing to do with the carbon tax David. 
HOST:  Lifting the tax-free threshold.
FITZGIBBON: Most backpackers would not have earned through the old tax-free threshold.  We have never had a tax on backpackers, it is always been thus.  It was this Government who decided to impose the 32 per cent tax and grab the $540M for expenditure elsewhere.  By the way, Barnaby Joyce was one of the key backers of the tax because he wanted that revenue.  This was all of the Government’s making – they should apologise – and if they want our bipartisan support, they need to demonstrate to us that 19 makes a difference to 32.  In other words, that at 19 per cent backpackers are going to return.  By the way David, those who were looking to pick product this week and last week won’t be helped by this.  The damage is already done.  That is why Barnaby Joyce should have straight up front apologised  today.
HOST:  So to be clear, you are still worried 19 per cent is too high for backpackers?
FITZGIBBON:  The fact is we just don’t know David.  It could be. We want to see the modelling on both the impact on our international competitiveness and I want to see some modelling on the second-round effects too.  They are still claiming hundreds of millions of dollars in revenue, but may I remind you the backpackers who choose not to come here do not pay income tax, they do not pay GST, nor do they pay excise on things like alcohol or cigarettes.  So is this revenue real? I want to see some evidence of that. 
HOST:  What about the way the Government want to pay for this – the $5 increase in the Passenger Movement Charge?  Labor did put it up four years ago in 2012 by $7, this Government now wants to put it up by $5 – is that a concern for you?
FITZGIBBON:  Well, like the Backpacker Tax, this came from absolutely nowhere.  The tourism sector is out there today saying throughout the course of consultation on the Backpacker Tax, nowhere by no one was this increase in the Passenger Movement Charge mentioned.  So they are rightly angry.  I had to laugh because I remember very vividly, I think the last time we sat in Canberra, Steve Ciobo the Tourism Minister crowing by way of an answer to a Dorothy Dixer about how strong the tourism sector was travelling and how it took a Coalition Government to put a freeze on any increase on the Passenger Movement Charge.  Well it seems that Steve Ciobo, the Minister’s word is worth too much on this occasion. 
HOST: Did Labor consult much when you put up the Passenger Movement Charge by $7?
FITZGIBBON:  Well I wasn’t the Tourism Minister at the time, but knowing Anthony Albanese I would be very confident they were consulted at the time, that is usually the way you do things.  If you are running a properly functioning government, which they are certainly not doing.
HOST:  They wouldn’t have loved it back then – the sector would certainly not have I’m sure.
FITZGIBBON:  Well the sector never enjoys an additional impost  which might affect their international competitiveness.  But this one has come like a bolt out of the blue and of course this is a big victory again to the extreme right of Malcolm Turnbull’s party.  This is the George Christensens of the world standing up and stamping their authority on the Government again.  And it does pose the question -  who is really running the show?
HOST: Alright, before I let you go – to wrap this up – certainly I am not hearing any assurance that Labor will back this through – you want to be sure this still stacks up internationally – the Government may need the cross-bench to get this through.  
FITZGIBBON:  I think that is why Barnaby Joyce would have been on the phone this afternoon bullying people as he is prone to do.  Our position remains very clear – we want our tourism and agriculture sectors to be productive and of course internationally competitive.  We will look at this from a positive perspective with a will to cooperate and fix this thing and return some certainty to the sectors.  But we want to see the evidence.  We have got to have evidence-based policy.  We can’t have the Government just guessing and saying we will take it from 32 to 19 without any evidence or knowledge that it is going to restore our international competitiveness.
HOST: Joel Fitzgibbon, Shadow Agriculture Minister, we appreciate your time this afternoon, thanks very much.
FITZGIBBON: My pleasure David.


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