Nov 28, 2016

Joint doorstop – Parliament House, Canberra

Subjects: Scott Morrison’s backpacker tax backflip; George Brandis and the Bell Group case.

CHRIS BOWEN, SHADOW TREASURER: Well today we see the latest humiliating back down in what has been a rolling crisis for the Abbott/Turnbull Government. This has been, the backpacker tax, has been ill-conceived, ill-though out based on no consultation and the Government has lurched from position to position in a way which has undermined confidence in regional Australia, which has affected backpacker numbers to Australia even already, even before the tax has come into place.

This Government’s lack of coherent approach, this Government’s lack of consultation, the price has been paid by regional and rural Australia. And today in a press conference which was immature and petulant even for him, the Treasurer, cranky with the Parliament for not excepting the compromise which was negotiated between him and Barnaby Joyce in secret, backed down further to 15 per cent. But what the Treasurer didn’t reveal or announce is whether 15 per cent is competitive internationally with New Zealand at 10.5 per cent and of course it is not. So the Labor Party will maintain its position on 10.5 per cent preferred backpacker tax rate. If the Government had come to us in good faith to try and reach a settlement then we would have been happy to hear their arguments.

The Treasurer, again as I said in a performance which was arrogant and petulant even for him said the Labor Party could ‘go jump’. Well he’s clearly not interested in a proper, sensible and mature discussion in this, the 45th Parliament. The Treasurer was lecturing everybody today about revenue and the importance of ensuring that measures continue to produce the same Budget bottom line. This is a Treasurer together with his predecessor who oversaw $300 million being given away to the West Australian Government on behalf of the Commonwealth with no oversight and the Government is clearly exposed today and the Labor Party will of course be pursuing those matters today.

You see the Treasurer, the Finance Minister and other Ministers saying they know very little about this matter. This is $300 million which the Government has just given away while they lecture other people about the backpacker tax and the need for other pro- Budget measures, Budget positive measures. This Government through a secret side deal has given away $300 million in a way which has led to the scandal and crisis leading to the resignation of one of Australia’s most respected statutory independent office holders, the former Solicitor General.

So this again is the latest in a series of humiliating back downs. Just yesterday the Finance Minister on the ABC was saying there is no further room for compromise, we are sticking to 19 per cent. This morning the Treasurer was quoted in the Financial Review saying the Parliament should back 19 per cent, we are sticking to 19 per cent and yet the Treasurer is wheeled out this morning for the latest back down. Well the Labor Party will maintain our consistent position. Of course the other great part of this imbroglio have has been the Government’s breaching of its election promise on the Passenger Movement Charge. I will invite Anthony Albanese to add to my remarks in relation to that in particular and then Joel will make a few brief remarks on the backpackers tax and then we will take questions.

ANTHONY ALBANESE, SHADOW MINISTER FOR TOURISM: We will just have a short delay for this technical issue.

Thanks very much. Of course we saw the example of how chaotic the Government’s handling of this backpack tax fiasco has been on the floor of the Senate last week. Of course the tourism sector as well as the agricultural sector are affected adversely by the handling of the Government of the backpacker tax. But the tourism sector got a double whammy because the tourism sector will also be hit by the increase of the Passenger Movement Charge that happened in exactly the same format as the backpacker tax; no modelling, no consultation with the sector.

And last Thursday we saw on the floor of the Senate a motion of amending the legislation on the Passenger Movement Charge handed to the One Nation Senators written by the Government which then it was ruled by the clerks that they couldn’t actually move on the floor of the Senate. Of course the reason why that ruling then was the subject of debate was because it wasn’t done in advance; it was policy on the run.

And of course the idea that you can have a five year freeze on the Passenger Movement Charge is absurd. You cannot bind a Government through legislation for the next Budget, let alone the next Parliament. It is up to the Parliament to determine it and in the same way as this five dollar increase in the Passenger Movement Charge was done through legislation, a further increase could also be done through legislation. So it was just a con by the Government in which they conned a group of Senators to support their position in return for this so-called freeze and now, the Treasurer is having to introduce special legislation on the floor of the House of Representatives today, without giving notice of it, clearly on the basis of the One Nation senators agreeing to other legislation being on the table that’s there this week, no doubt unrelated legislation.

This shows how chaotic the Government is when it comes to the handling of these issues. If you can’t run the parliament, you can’t govern the county. And it’s very clear that this Government through the backpacker tax and passenger movement tax fiasco, just simply hasn’t been up to the job. It’s an example of government incompetence that will be studied; I’m sure, for years to come.

JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE: Well for the last eighteen months, this Government has been prepared to put its own first for some additional revenue, in front of the interest of both our farmers and those in the tourism sector. Worst on field has been Barnaby Joyce, no less than the Agriculture Minister. First cheering on 32.5 per cent, then cheering on 19 per cent and today we don’t know whether he is supporting  15 per cent or not. We do know that they are all over the place, and there are various views within the coalition party room.

What we do know, is that just like the original 32.5 per cent proposal, there’s been no consultation, no modelling, we don’t know if at all this helps to restore Australia’s capacity to compete internationally. We do know that at 32.5 per cent backpackers were dropping off immediately. We do know at 19 per cent backpackers continued to fall off. And nothing the Government has delivered gives us any confidence that at 15 per cent they won’t continue to fall off. So today, Labor will stand by our farmers, and in particular those in the horticulture sector.

We will stick at 10.5 per cent. Why? Because it’s the headline rate. When European backpackers look towards Australia and New Zealand, they don’t get the slide ruler or calculator out they just look at the headline rate. Now remember, 15 per cent is a 15 per cent increase from the current tax rate. I’m concerned about 10.5 but accept compromises sometimes are necessary, but 10.5 per cent is a lot more competitive than 15. They will look to Australia and New Zealand, they will see around 10 in both countries, and I think they’ll mark Australia as competitive again at 10.5.

But at 15 it’s just a flip of a coin, there’s been no research or modelling done, it’s an arbitrary figure. And this Government stands condemned still, for selling out our farmers and putting some of their own interests around Senate negotiations in front of the interests of the country and our farmers. In particular, Barnaby Joyce, we know thanks to senate estimates has been chasing this backpacker revenue to pay for some of his boondoggles in his Agriculture White Paper, a now discredited white paper, and in particular the relocation of the APVMA to his own electorate which is going to cost the tax payer around 28 million dollars and in turn do enormous again, to our agriculture figure.

JOURNALIST: Mr Fitzgibbon you say 15 per cent is an arbitrary figure. It’s not, it’s the same rate that the Pacific workers are currently taxed at and there’s a lot of support for a 15 per cent rate in the farming sector including in the horticulture sector. Why not get on board?

FITZGIBBON: Well you know the National Farmers Federation brought a group of farmers to Canberra last week to support 19 per cent and I haven’t heard one of them support it yet. Nor have I heard one farmer support it at 15 over 10.5. Most farmers of course want zero. And they support the lowest possible rate they can secure. It’s a little bit cute to compare the 417 visa for example with the Pacific Islander program which of course is in effect a foreign aid project. They are not comparable it’s a little bit like trying to compare 457s with 417s. There is no comparison. The fact remains that we are going from zero to 15 if the Government has its way and that’s going to be very damaging to our farmers.

JOURNALIST: If it’s a foreign aid project why should they be paying a higher tax rate than backpackers?

FITZGIBBON: You don’t understand, you obviously haven’t looked at how that program works. We are bringing pacific islanders here to have the cultural experience and the work experience. The collateral benefit of course is the extent to which they help our farmers. But it’s the 417s that form the backbone of the workforce in these horticultural areas in particular. And comparing them is, if you’ll excuse the pun, like comparing apples with oranges.

JOURNALIST: Where is your evidence that 10.5 is going to be so much better than 15 or 19 per cent? You keep having a go at the Government that they are arbitrary figures, but all you’ve sort of said about the 10.5 is that it’s a headline rate.

FITZGIBBON: Well the Australian Labor Party was happy with zero. This tax arrangement is the Government’s tax – 32.5 per cent was the Government’s tax. Nineteen was the Government’s tax. Now 15 is the Government’s tax. It is common sense that if we are comparable to the New Zealand headline rate and five points lower than 15, it’s going to be better than 15.

JOURNALIST:  But you don’t have any other figures or modelling or anything to back that position?

FITZGIBBON: Her Majesty’s Opposition at times relies, in the absence of any assistance from the Government, which has not been near us but did admit that they are making their own assumptions about nine and 15, that is that backpackers will still refuse to come. We run on instinct here. Of course we do. It’s an obvious common sense thing that a low rate is better than a higher rate and the same headline rate as New Zealand is much better than 15.

JOURNALIST: The Treasurer says 15 from 19 will cost the Budget $120 million over four years. What would 10.5 per cent cost across the Budget?

BOWEN: Well Lane, we released out figure when the three of us announced our position of $205 million and, as I said, you know this is a Government which has just given away in secret $300 million or attempted to, to the West Australian Government. So we don’t take lectures from them. The last sitting week we offered $1.4 billion worth of improvement to the Budget bottom line by improving the superannuation package. They rejected that. The Treasurer could have gone to the ratings agencies and said look, we’ve got even more savings than we asked for from the Parliament. He turned down that opportunity. So the other point to make of course is that at 32.5 per cent that will raise effectively zero because I think everybody accepts now that very few backpackers are going to come to Australia under that tax rate and that of course, until recent times, was the Government’s preferred position.

JOURNALIST: Mr Bowen on the Bell Group issue, The Greens have signalled a Senate inquiry. Do you think Chris Jordan should front that to give his insight as to what has gone on?

BOWEN: I’m not going to give a running commentary.  Of course Mark Dreyfus and Penny Wong will provide further commentary, Mark in terms of being Shadow Attorney General and Penny as Leader in the Senate. Obviously, this is a very significant problem for the Government. Obviously there are a huge number of questions to be answered here, up to an including by the Prime Minister, let alone the Attorney General and other economic and treasury ministers who had, or should have had, line of sight on this issue.

JOURNALIST: And just on the $120 million. The Treasurer said this morning Labor has to co-operate to find this $120 million. What is your response to that?

BOWEN: So he is asking for support for a measure he’s not prepared to tell us what it is. He said it would all be released in MYEFO. Now this is a very arrogant Treasurer, but that is arrogant even for him. If he’s got a proposal to make he’ll make it and we’ll consider it on its merits. We won’t be lectured by this Treasurer, who, on his watch is giving away $300 million to Western Australia sight unseen, in secret, and has rejected $1.4 billion worth of Budget improvements that we offered him last week.

JOURNALIST: Mr Bowen, (inaudible) Opposition staffers have increased in number by six this year. What’s the justification for that increase?

BOWEN: Well the number of Opposition staffers is determined by a formula in relation to the Government’s. We get a percentage of the Government’s.

JOURNALIST: (inaudible).

BOWEN: The formula is well accepted, established and long-standing. We get a certain percentage of the Government’s staff. If the Government increases its numbers, then in terms of the long-standing bipartisan formula that the Opposition gets a certain percentage of the Government numbers, then that is reflected. That  has been the case under governments of both persuasions.

JOURNALIST: Do you need this six extra staff?

BOWEN: Well there is a long-standing formula that says if the Government increases its numbers in terms of advisers, it’s only fair that  the Opposition gets the number of advisers to reflect that.

FITZGIBBON: About 20 per cent I think, or less.

BOWEN: Yes, it’s a small percentage in the greater scheme of things.

JOURNALIST: So it is a deal between Labor and Liberal? Is that right?

BOWEN: It’s a long-standing formula which has existed under all governments. All right. Cheers. Thank you.