Nov 8, 2016

Labor will not support Liberal Party’s backpacker tax debacle

The Liberal Party’s backpacker tax debacle is the preeminent case study in the chaos and incompetence of the Turnbull-Abbott Government.

The Government botched the consultation and the details of the original 2015 Backpacker Tax measure.

But Scott Morrison’s and Barnaby Joyce’s latest try shows that despite some backflips, the Government again botched the consultation and the details of the backpacker tax package.

Over the last year and a half, the uncertainty and chaos surrounding the backpacker tax packages has seen the numbers of backpackers coming to Australia dropping off, while tourism and agriculture businesses have struggled to get the workers they need.

Labor successfully moved for a short Senate inquiry led by Senators Chris Ketter, Jennifer McAllister, Catryna Bilyk and Helen Polley, that travelled to Cairns and to Tasmania and heard from farmers and tourism groups about the damage the Government’s backpacker tax Mark I and II are causing.

Labor has consulted extensively with a range of stakeholders on the Government’s package, including in the tourism and agricultural sectors, and received a briefing from Treasury.

The clear message from the community and the regions is that the Government has failed twice on the backpacker tax.

Today, Labor outlines that it will move amendments in the Senate that would:

  • Lower the proposed tax rate for working holiday makers from 19 per cent to 10.5 per cent; and
  • Oppose the proposed increase to the Passenger Movement Charge.

Backpackers working in New Zealand pay tax at the rate of 10.5 per cent from their first dollar – setting our tax rate at the same level will ensure Australia remains a competitive and attractive destination for working holiday makers

We recognise that Australia already has the second highest departure tax in the world after the UK Air Passenger Duty.

And only weeks prior to the Government’s announcement of an increase in the Passenger Movement Charge, the Minister for Tourism was saying that increasing the PMC was akin to “choking the golden goose that is Australia’s tourism industry”.

Now Labor’s message to the Parliament and to the National Party is simple.

If you care about rural and regional Australia and you care about tourism to the regions and to and from Australia, you will listen to your communities, and agree on changes to the Government’s package.

Labor will continue to have discussions with the Senate crossbench about its amendments as the Government seeks to bring on debate on this legislation from tomorrow.

We believe the Parliament has a unique opportunity to provide certainty to the economy, to the agriculture and tourism sectors in particular, by supporting Labor’s proposals.

The sooner the Senate considers these amendments, the sooner the nation can put behind this sorry chapter of chaos and incompetence led by Barnaby Joyce and Scott Morrison, well in advance of 1 January 2016.