SUBJECT/S: Backpacker Tax.


HOST: The Greens have thrown up one late surprise this afternoon, I will bring in now for reaction, the Shadow Agriculture Minister Joel Fitzgibbon. Were you surprised?

JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: I was surprised. The Greens have been even more critical on the backpacker tax at 15 per cent and 19 per cent and 32.5 per cent than in fact we were and I was gob smacked when I heard they had done this deal. The genius of this deal- not, is that we are going to end up with a higher headline rate than we might have but keeping it at 15 is going to cost more than moving it back to 13. It’s crazy.
HOST: Mr Fitzgibbon, if this was really about a revenue saving measure for the budget, why were you steadfast at 10?

FITZGIBBON: Because backpackers were falling away even before this Government announced its 32.5 per cent backpacker tax and if we are going to restore our capacity to compete with places like New Zealand, and 10.5 was the equivalent of the New Zealand rate. So when they are thinking of doing the long haul, then they see New Zealand 10.5, Australia 10.5 and hopefully they come to…

HOST: Fine, but this is effectively 13 as Jacqui Lambie is saying that this 13 per cent rate, throw in the money that has been given to Landcare, this is what you came to this afternoon anyway so a deal is a deal isn’t it?
FITZGIBBON: The backpacker sitting in an Irish pub tonight doesn’t know about the Landcare deal.

HOST: I’m sure he doesn’t care about the Landcare deal to be honest, don’t farmers just care that we are going to the summer break now and the rate isn’t 32 per cent at the end of the day?

FITZGIBBON: What that backpacker looks at sitting in that Irish pub is what the headline rate is and what he sees now is that it’s 15 and he sees 10 in New Zealand.

HOST: But we have a better exchange rate and better wages here in Australia.

FITZGIBBON:  The wages thing is a myth. For one, they are not likely to be looking at it and don’t do that in-depth research. The wage rate is lower in New Zealand but so is the cost of living. That is why their wage rate is lower. This is a part of the equation the Government conveniently left that out of the so-called modelling.

HOST:  We are going back to old arguments here, but look, a deal looks like it’s about to be done. How is Labor going to handle this in the House and in the Senate over this evening? I guess this will pass or perhaps it will go on tomorrow.
FITZGIBBON: We will continue to argue for a lower headline rate, but I will be -  because of the dirty deal that has been done with the Greens. I say it’s a dirty deal because they were prepared to have a higher headline rate at more costs just so they didn’t have to agree with the Labor Party and that is what it has come to.
HOST:  Hang on, this was political opportunism on all sides wasn’t it? From Labor, from the Greens and from the crossbench. Everyone was arguing a different rate, if you really believe in the 13 per cent rate, why did you swoop in this afternoon and make such a late announcement on the last day?
FITZGIBBON: I campaigned against the backpacker tax right throughout the election campaign. And then post the election campaign, they went to 19 and I campaigned against that because it was clear that it was not going to restore our capacity to compete. Of course they had to admit in the end they had done no modelling to assess both the impact on our farmers…

HOST:  Did you argue against then Labor banking that 32per cent rate?
FITZGIBBON:  Right throughout the election campaign on least a dozen occasions, on radio and I think on your program, I challenged the Government, I said if you agree…

HOST:  (Inaudible)

FITZGIBBON:  Well we weren’t going to let them get away with walking both sides of the street. What they did was they announced a review implying that there wasn’t going to be a backpacker tax after the election- trust us we will review this and you will be okay- but they were booking and spending the $500 million they were intending to raise with it. We weren’t going to let them off the hook then. Of course it has taken us until Christmas to complete this process. If they joined with Labor during the election campaign the uncertainty would have ended then.

HOST: I have just been told the budget impact is over 70 per cent of the original saves, plus you have the benefits of agriculture tourism and hospitality. I understand the politics here but is that correct?
FITZGIBBON:   No, no, we wanted them to go from 15 per cent to 10.5. That would have cost $85 million over the forward estimates. In other words, a bit more than $20 million a year. Less than what Barnaby Joyce is spending moving the APVMA to his own electorate. This move is going to cost $60 million but is going to cost them another $100 million for the Landcare commitment so..

HOST: 160?

FITZGIBBON: That’s right. It was going to cost them more to deliver a higher headline rate so farmers still lose out and tourism operators still lose out.
HOST: Mr Fitzgibbon, at the end of the day, one last question. We now go to the summer break, without a backpacker tax at 32 per cent. Isn’t that a good result?

FITZGIBBON:  Thank God, that would have been a disaster for both the farm sector in particular, those in the horticulture sector and you know, in reality, Labor managed to get the Government from 32.5 per cent to 15. We would have liked it to be lower, but, we lost that debate.

HOST: Shadow Agriculture Minister, Joel Fitzgibbon, thank you for your time. You’re probably going to have to run off to the House soon. Thank you. 

FITZGIBBON: I don’t want to miss the backpacker tax.

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