Passenger Movement Charge Amendment Bill (No. 2) 2016 - Second Reading

29 November 2016

This so-called backpacker tax has been a joke from the start; however, the punchline is not funny for two of our most important industries: agriculture and tourism. The government has mismanaged this issue from the outset and no doubt it has been costly—costly to regional communities, costly to communities that rely on tourism, costly to communities that rely on agriculture and costly to communities like my own in the electorate of Paterson, which has the triple whammy of being a regional community that relies on tourism and agriculture.

My electorate of Paterson straddles the beautiful Hunter Valley, with its vineyards and restaurants and blue-water wonderland of Port Stephens with dolphins and whales. Both of these areas are reliant on tourism but also on agriculture. The alluvial plains of the Hunter Valley are the food bowl for the region and beyond. Our vineyards produce world-famous wine. Both of these areas rely on agriculture and tourism, and both of those industries rely on backpackers.

We are sending the wrong message to overseas backpackers with this tax—that these regions, these industries and this country does not welcome overseas backpackers. I would like to share some views on this subject that were reported in the Newcastle Herald in May this year. In a report on the backpacker tax, the chairman of Tourism Hunter, Will Creedon, who owns renowned restaurants in Newcastle and the Hunter, described the backpacker tax as 'poor policy'. This is the chairman of Tourism Hunter. Mr Creedon said:

It could have been thought out better and I hope it's reversed.

This was after the government had decided, just before the election, to delay the 32.5 per cent tax that would have come in on 1 July for six months pending a review. In that Newcastle Herald report of May this year, Mr Creedon said that backpackers brought a refreshing work ethic to the region, and that taxes that made working holidays in Australia less viable would be detrimental to local hospitality. He said:

They bring a new level of customer service.


We are very dependent on them, and it flies below the radar. We need them here to raise the bar.

That Newcastle Herald story also quoted 21-year-old German backpacker Angelina Heck, who has worked in a Newcastle West bar and restaurant for about three years. She was hoping to transition to a study visa, but she said in that story that the proposed new tax had brought forward her plans to return to her native Germany. She said:

It's already hard enough for international people to come to Australia and work.

And she said:

I decided to leave because my visa runs out and with these laws coming in July, it wasn't going to be worth it.

Ms Beck said she believed backpackers had made a contribution to local businesses. That is one business owner and community leader and one backpacker, but the message is the same across the country: Australia relies on backpackers, and backpackers want to come to Australia and work but they find it hard enough already.

I had attempted to speak on this tax in October but the government shut down the debate, just like they have shut it down today. They cannot shut down the voices of our agricultural and tourism businesses that rely on this input. First, there was the backflip from 32.5 to 19 per cent. Now, to appease the Nationals and cosy up to One Nation, they have done a further backflip to 15. Labor has agreed to 10.5. I urge the government to really think about what they are doing to these important sectors. Both industries need certainty, but the tourism gets hit twice because it will also be hit with the increased passenger movement charge that happened in exactly the same way as the backpacker tax—no modelling and no proper consultation. It is policy on the run, which is what we continually seem to see from a government that is clearly on the run.

The idea that you can have a five-year freeze on the passenger movement charge is absurd. How can you bind a government through legislation for the next budget let alone the next parliament? Of course, you cannot. The freeze is just a con by this government. It is a con to convince a group of senators to support their position—a position based on no modelling and, again, no consultation. We know that when the tax was proposed to be 32.5 per cent the backpacker numbers dropped off. The member for Solomon has just given us a very live example of that. We know that when the government backflipped to 19, backpacker numbers kept dropping off. How can we know whether this second backflip will do anything to halt that decline? I cannot see why it would.

When European backpackers look Down Under they look at Australia and they look at New Zealand. What do they see? Two beautiful nations, full of adventure, the chance to work while they party and the chance to pocket a bit of money to further fund their travels. One of those beautiful nations, New Zealand, is taxing them at 10 per cent. The other is Australia that wants to tax them at 15. Which would you choose? 15 or 10? Australia, at 10.5, looks just as appealing as New Zealand at 10, but add another five to that figure and the gloss wears off. If Labor could, we would have no backpacker tax at all, but we understand that sometimes you need a compromise, so we have compromised. We have compromised to 10.5, not 15. It does not even require a backflip for the government to agree to 10.5, merely a hop, skip and a jump, but they will not do that.

Labor will not support this 15 per cent tax. We will stand by our farmers. We will stand by our tourism operators. Labor will stand by our rural and regional communities—far better than this government and the Nationals ever will. Thank you.