Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 - In committee


Senator IAN MACDONALD (Queensland) (12:44): I want to very briefly in the committee stage ask the minister a couple of questions, because this issue is particularly important to the state that I represent, Queensland, but even more importantly up to the north of Queensland where small crop growers, horticulture growers, banana growers and mango growers rely on foreign backpackers to pick their crops. I am disappointed to say that, with huge unemployment in Townsville and Cairns, particularly youth unemployment, we still cannot get unemployed young Australians to go and do this work—but that is a separate issue.

I agree with the previous speakers that, unless we have these foreign backpackers to do the work, the crops will rot on the tree or on the bush. It is a very big issue. And I do think, and I have said this publicly, that the budget measure announced by the government was a mistake and it cost us during the election campaign. I assured everyone who raised this issue with me that, as long as I had breath in my body, we would change what was then proposed. I am pleased to see that the government did subsequently do it.

I chaired the Economics Legislation Committee in the absence of the chairman when it met in Cairns. The general response from Cairns—which is the centre of the tourism industry in Australia, as we know, and which has a very big horticulture industry in the Cairns, Far North Queensland region—was that, whilst they would prefer the passenger movement charge not to be imposed, they did not think it was going to make a great deal of difference. A $5 charge on a $2,000 airfare to and from Australia was not going to be a big deal. I think this is important. If you look at the Hansard evidence, none of the tourism industry people in Cairns were terribly worried about that. The horticulture people were concerned about the 19 per cent, the 15 per cent and the 13 per cent that applies in different places.

I have a question for the minister on a matter that I do not quite understand and that a lot of my constituents have raised with me. In the past there was a tax-free threshold for foreign workers that allowed them to earn up to $18,000 and not pay any tax, and that is what attracted a lot of them to Australia. Just in a brief contact with the minister before, I did not understand—the minister just mentioned it, and I want him to elaborate on it—that there was a court case which changed that. I want to understand that and get the facts on why that doesn't apply. Most people in the north, in my state, still believe that is the situation. Minister, could you explain that to me. I understand this matter has to be dealt with today. I do not want to take up much time. I understand that, if it is not dealt with today, we will be having tax at 33 or 35 per cent—

Senator Williams: 32½.

Senator IAN MACDONALD: and that means we will get no backpackers. So I understand the urgency. I do not want to delay the debate much further, but I am very curious about that, minister, and I know a lot of my constituents are as well.

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