SUBJECT/S: Backpacker Tax, South China Sea

SUBJECT/S: Backpacker Tax, South China Sea
HOST: The Shadow Agriculture Minister is with me now, thanks for joining us.


HOST: You’re good mates I can tell. The main point of attack from Barnaby Joyce is why do you need more time to get your position on the backpacker tax? I mean you have sat here many times and have said the government is dragging its heels, when is it going to take to have an outcome? And now they have and it’s Labor (inaudible).

FITZGIBBON: They announced this new tax, their tax, 16 months ago it was many, many months ago. I think in May they indicated they might have a rethink and then it took another few months to have a review, their third or fourth review, and then on September 29, just a few weeks ago, they concluded their report. Now they have built up this straw man and want this through the Parliament straight away. You know as well as me, no bill ever goes through the parliament in a week or even three weeks unless it is a national security.

HOST: Sure, but you’ve looked at this issue for a long time now.

FITZGIBBON: But David, they have tied in the same bill the backpacker tax now which is still 19 per cent and by their own admission, we are not competitive at 19 per cent and they still expect backpackers to fall off. Their own treasury modelling says at 19 per cent backpackers will continue to fall off. So they are imposing a tax on the agriculture sector and the tourism sector even though they know it will have an adverse effect. But what they have done is tie it to the superannuation changes which are just a cash grab. The employer has to pay 9 per cent of salary and taxation takes it straight back.
It is just a big churn. They have tied it in the same bill and they have tied it to increases in the Passenger Movement Charge that’s the old Departure Tax which has the tourism sector off its head and we can’t (inaudible) it’s all one package.

HOST: Let’s go through the three of them, and if you could have your way and split, starting at the end there at the Passenger Movement Charge, Labor put this up by a lot more than the government saying it will put it up by. Are you opposed to that?

FITZGIBBON: Labor had put it up in the past, but there was a bipartisan agreement it would be left alone now and they put it up despite the agreement, without any consultation with the industry whatsoever. That’s a big hit on the industry. It wasn’t our idea to put the backpacker tax in the same bill as two other tax measures. This is three new taxes.

HOST: So you don’t like the Passenger Movement Charge going up?

FITZGIBBON: I don’t like it at all.

HOST: Okay

FITZGIBBON: Three new taxes in one bill and Barnaby Joyce is blaming us for the impost. How does that guy’s mind work?

HOST: And the 19 per cent rate, you acknowledge there needs to be a tax rate there?

FITZGIBBON:  I have never acknowledged that.

HOST: You don’t think there should be any tax?

FITZGIBBON: Well let’s have that policy debate, this had its genesis…

HOST: What’s your view on it?

FITZGIBBON: My view is that we have to be internationally competitive

HOST: And what does that mean?

FITZGIBBON: These backpackers aren’t taking Australian jobs. You come with me to Tou’s Mango Farm an hour out of Darwin where they need 200 hundred people for just six weeks.

HOST: So they should get that tax free? They should get a complete tax break?

FITZGIBBON: I don’t see, what was already happening is that backpackers were already falling off. Even before the tax. What do they do in response? Did they have a labour market response in their whitepaper? No, instead, they imposed a new tax which of course exacerbates the situation.

HOST: Alright.

FITZGIBBON: We never had a debate about Backpacker Tax. We need to have it about visas generally. These are complex issues.

HOST: If you had your way, there’d be no tax at all?

FITZGIBBON: If I had my way we would be internationally competitive. They are in government, let them…

HOST: Does that mean no tax though?

FITZGIBBON: Well I don’t know? I don’t have the treasury modelling machines.

HOST: New Zealand does have a tax.

FITZGIBBON: 10.5 per cent.

HOST: Would that be competitive?

FITZGIBBON:  Maybe. Let’s have treasury model it and let’s have an informed debate not these arbitrary figures. We are 32.5 now we are 19.

HOST: Can you get the parliamentary budget office to do that modelling?

FITZGIBBON:  With respect the parliamentary budget office, I don’t know if they would be competent to do that. I think treasury is the best place. As I said, the government has modelled 19 per cent. I got them to say it three times David because I couldn’t believe they were saying it, they still expect backpackers to fall away. And by the way I continue to consult. Every day I have producers and growers, and growers especially largely from Tasmania ringing me saying forget about what the peak industry groups are saying, the NFF and others, I hate this 19 per cent.

HOST: Surely you accept the need for some tax. You costed in your election costings, the revenue from the backpacker tax.

FITZGIBBON:  Throughout the election campaign on at least 20 occasions, I sad to Barnaby Joyce, give this tax up today and we’ll match you. What they were doing is walking both sides of the street and were saying we are going to review it after the election implying they were going to get rid of it after the election.

HOST: You could have said we don’t support it therefore…

FITZGIBBON:  We don’t support it. It’s a dumb idea, ill-conceived and done without consultation.

HOST: You took the money.

FITZGIBBON: Back on, well we didn’t take the money.

HOST: Well you included it in your costings.

FITZGIBBON:  You wanted us to say we’ll get rid of it and allow them to get away with implying they are getting rid of it and having $540 million to spend.

HOST: We’re not going to have it therefore our budget bottom line will be that much worse off.

FITZGIBBON: The other point is that we could have killed it then, not wait to after the election and a review. Here we are in October and we still have the uncertainty. If they have had matched me at the time it would have been dead back then. The other point is back on the timeliness of the bill, I had this discussion with Brent Finlay from the National Farmers Federation just this afternoon, an hour ago, and he accepts linking the backpacker tax to the super changes and the increase in the Passenger Movement Charge makes this very problematic. No one who knows anything about this place would expect that bill to go through the Parliament without going to a Senate committee. That’s just the normal course of things.

HOST: As a former Defence Minister, the South China Sea, should it be the government of the day or the military of the day to decide whether we sail a ship within 12 nautical miles?

FITZGIBBON:  This is a false debate David.

HOST: It’s a simple question.

FITZGIBBON:  This is the important thing. We have to accommodate China’s rise. They are a major trading partner, they are entitled to their place in the world and at the same time if they are to expect other Western nations in particular to accommodate their rise, they should reciprocate by playing by internationals law- the rules of the international community and at the same time, any person who has a legal right to pass through certain waters, should not hesitate to do so.

HOST: And we do have a legal right, do you believe, to pass within 12 nautical miles?

FITZGIBBON:  I believe we do, yes.

HOST: So would a Labor Government say that we should do one of these freedom of navigation exercises?

FITZGIBBON:  You would have to know all the circumstances. I have sat in the National Security in the cabinet and when you’re in there David, you get advice from the military branch. You don’t make calls like that from opposition without knowing all the relevant facts

HOST: You can answer whether it’s the government’s call to on this at least?

FITZGIBBON:  This is all nuancing David.

HOST: This is whether it’s the government or the admiral that decides.

FITZGIBBON:  You sit in the National Security Committee, without saying too much about the confidential nature of that, and you have a discussion.

HOST: Someone has to make the call.

FITZGIBBON:  The government says what are the options available to the government in these circumstances?

HOST: So the military says here are the options, we do or we don’t. Ultimately it’s the minister who makes the call or the prime minister?

FITZGIBBON:  The interesting thing about the National Security Committee of the Cabinet and this is no secret it’s the only cabinet committee where non-elected representatives participate in the debate. It’s not a simple decision. It doesn’t t matter who is making the decision.

HOST: It’s a collective decision.

FITZGIBBON:  Ultimately the government is responsible for all decisions, that’s what matters.

HOST: So it is ultimately the government?

FITZGIBBON:  Ultimately the government is responsible for all decisions.

HOST: Joel Fitzgibbon, thank you very much for joining us.

FITZGIBBON: It’s a great pleasure.

HOST: Good to catch-up again. 

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