May 6, 2016

Colbeck in hiding as open warfare erupts on backpacker tax

Tourism Minister Richard Colbeck has gone into hiding as open warfare erupts among Coalition MPs over the Government’s backpacker tax, which would see working holiday makers pay 32.5 per cent tax from the first dollar.

During yesterday’s Senate estimates hearings, Coalition Senator Bill Heffernan joined his colleagues Warren Entsch, Andrew Board and Senator Anne Ruston in publicly opposing the backpacker tax, declaring it ‘disastrous’.

Treasurer Scott Morrison’s blatant attempt to avoid a damaging campaign by furious tourism and agricultural bodies by announcing a six month delay to the start of the backpacker tax is fooling no one.

In a startling admission for a Treasurer who was part of the Cabinet which approved the very policy prior to last year’s Budget, he said:

I don’t think we’ve actually resolved it at a point yet where I think we’ve got good policy. 
Scott Morrison, National Press Club, Tuesday 3 May 2016

The Government can’t have it both ways. It’s either bad policy and should be dumped, or it’s happening.  Ongoing uncertainty is already hurting our economy – a fact made clear by the agricultural and tourism sectors this week.

Prospective working holiday visa applicants seeking to come to the region in the next six months will see that Australia may have a 32.5 per cent tax rate from the first dollar, while our competing countries, such as New Zealand, do not.

The consequences on demand for working holiday visas, on visitor spending in regional Australia, and availability of critical seasonal labour for the agricultural sector could not be more obvious.

But since the Coalition came to office, demand has plummeted with Department of Immigration figures showing 23,000 fewer working holiday makers in Australia at the end of 2015 compared with the same time in 2013.

Despite having more than a year to find a solution, Minister Colbeck failed to secure any improved outcome from his Cabinet colleagues this week, who instead rolled him on Budget eve.

The tourism sector deserves an advocate who will stand up for its needs, not one who willingly submits to the Treasurer’s damaging incompetence. Richard Colbeck will be remembered as Australia’s most ineffective Tourism Minister.

Labor stands by the three principles previously outlined regarding a backpacker tax:

  1. The figures must be based on real data of backpacker earnings, with proper modelling conducted as to the effects on demand for working holiday visas.
  2. Additional funding must be provided for a marketing and education campaign to help maintain demand for working holiday maker visas and ensure applicants understand their tax obligations.
  3. The tourism and agricultural sectors must have been properly consulted.