Subject: Backpacker Tax

ANTHONY ALBANESE: Their modelling showed when we were briefed by them that they assumed the same number of backpackers coming whether it was 32.5 or 19.
LAURA JAYES: But 19 per cent, I would argue that’s probably the most-competitive in the world because, compared to New Zealand which the Opposition has done in this case, citing the 10.5 per cent, we have a higher minimum wage and also our exchange rate is better. So therefore we are more attractive than New Zealand.

ALBANESE: Well, that is not right of course. They exchange rate fluctuates of course from time to time.
JAYES: But our currency is consistently stronger than New Zealand’s.

ALBANESE: Well, not that consistent actually in recent times. But in terms of New Zealand as well, in terms of the cost of living in New Zealand compared to Australia, the differentials are there as well. So we say that headline figure is critical when these days, with the era of smart phones and people deciding what country they’ll go to, they can look at what the headline rates are. They’ll see 10.5 per cent New Zealand, 10.5 per cent Australia. That’s a good place to land on. Bear in mind this is 10.5 per cent compared with zero. There was zero before the announcement in the Budget of last year by Joe Hockey and that’s been maintained because the legislation hasn’t changed yet. Now the Government are now saying as well that if this isn’t passed, then perhaps it will become 32.5 as the default position. So they are saying to the agricultural and tourism sectors, we’ll actually punish you because of playing politics in this place.
JAYES: There's a lot of politics being played (inaudible) …

ALBANESE: This has been a debacle.
JAYES: As you point out, this was announced in the 2015 Budget by Joe Hockey, or, yes, it was Joe Hockey. Now the Government's said, OK during the election campaign, 19.5 per cent.

ALBANESE: Well they didn't. They said that afterwards. During the election campaign there was absolute uncertainty.
JAYES: Yes, after the election. But what that difference in tax costs the Budget - about half a billion dollars. This further reduction that you're proposing is losing another half a billion dollars in revenue over the forward estimates. Is that in line with the modelling that Labor has looked at, or you haven't looked at the cost?

ALBANESE: Well, of course we have certainly looked at the cost.
JAYES: Well how do you plan to offset it?