Backpackers should be taxed to restore the balance between imported labour and young local people who need a start, the health minister, Sussan Ley, has said.
With the backpacker tax still in limbo almost 18 months after it was announced, Ley told the ABC’s Q&A rural special in Mildura on Monday there had been resistance among food producers to using local people for seasonal picking work.
National Farmers’ Federation representatives told a Senate committee last week that agriculture sourced 25% of its workforce from working holidaymakers, but in some fruit-growing regions the proportion was much higher.
Asked why the government needed to introduce the tax, Ley said it was about getting the balance right between local and imported labour.
“The balance is between the imported backpacker labour and local young people who need to get a start in rural Australia,” Ley said.
“Now I know a lot of farmers because I represent many in my electorate and they say, ‘Don’t give me local people because they don’t turn up and they don’t have a go.’
“I understand that there are challenges. But that’s where the balance lies.”
How beneficial to Australia do you think it is to steal from backpackers in tax? @sussanley & @GermanoEmma #QandA https://t.co/FvNKuqc0vM
— ABC Q&A (@QandA) October 31, 2016
In the 2015 budget, the then Abbott government said it would impose a 32.5% backpacker tax from an effective rate of zero. But after increasing opposition from the farming and tourism industry, the Turnbull government announced a review of the tax in the election campaign.
In September, the treasurer, Scott Morrison, announced a tax of 19% but introduced two new savings measures. Under the changes, backpackers will repay 95% of their superannuation in tax when they leave the country and there will be a $5 rise in the passenger movement charge.
The backpacker bills and associated savings measures have passed the lower house, but remain under investigation by a Senate committee.
Ley said the existing system meant backpackers effectively paid no tax but also meant they were often exploited.
“While you might think these are working holidaymakers, can I say I’ve seen busloads of working holidaymakers in the most appalling conditions driven from Sydney, housed in one room, and effectively rorting this to the nth degree,” Ley said.
“I think it demonstrates where there is a tax break, people take it. So this 19 cents lands exactly where it need to sit. There is competitiveness between Canada, New Zealand, UK and other places.”
Labor’s agriculture spokesman, Joel Fitzgibbon, also on the panel, said the government had simply tried to raise revenue from backpackers but he would not nominate a rate that Labor would support.
The party has refused to say whether it will support the Coalition’s 19% rate when the bills come back to the Senate.
“When the government half backflipped and went from 32.5% to 19%, it insisted the new measures be revenue-neutral,” Fitzgibbon said.
“They increased the departure tax and raped and pillaged the superannuation of backpackers to make it revenue neutral. The only principle here from the government’s perspective is revenue.”
The other panellists were Stefano de Pieri, chef and author of A Gondola on the Murray; Emma Germano, general manager of I Love Farms; Dean Wickham, executive officer of the Sunraysia Mallee Ethnic Communities Council; and Katrina Myers, an avocado farmer and mental health advocate.
What would you say to supporters of the govt’s proposed legislation to ban refugees? Wickham & @sussanley #QandA https://t.co/IQcdqSjQbz
— ABC Q&A (@QandA) October 31, 2016
Ley also confirmed that some refugees in Australia on bridging visas would be affected by a ban on asylum seekers who arrive by boat from ever being allowed into the country.
“The reason for that is they would have been processed in either Manus or Nauru or an offshore processing centre,” Ley said. “That’s what’s being targeted with this legislation.”
The ban will apply to any adult who has been sent to detention centres on Nauru or Manus Island since 19 July 2013.
Ley could not tell the panel how many people would be affected by the legislation. “There are very few people who have been processed in Manus and Nauru who are now in Australia,” Ley said.
