CONFUSION surrounds the ALP’s formal policy position on the backpacker tax increase and if they would support its continuation, if elected to government.
Ambiguity intensified after the National Farmers’ Federation issued a statement today saying they welcomed the Labor’s election commitment to “abolish the destructive backpacker tax” if they formed government.
The NFF referred to statements by Bill Shorten at a doorstop media interview in Adelaide on Tuesday to say the Opposition leader had confirmed previous comments from Shadow Agriculture Minister Joel Fitzgibbon that their party would “kill this tax and kill it quickly”, if elected.
In the NFF media statement, President Brent Finlay said Labor’s commitment to removing “this heavy burden” from the agriculture industry would be welcomed by farmers across the country.
“The ALP, together with a number of minor parties, has recognised the short-term workforce crisis now facing Australian farmers because of the backpacker tax.” Mr Finlay said.
But the NFF used ambiguous comments from Mr Shorten at the press conference made after he was asked whether he was at odds with Mr Fitzgibbon’s position to kill off the tax.
“No, I'm not,” Mr Shorten said.
Mr Fitzgibbon however said he was misquoted in comments attributed to him, reported by other media.
The ALP has not released a formal policy position on the backpacker tax but calls have been made to the leader’s campaign office, seeking clarification and also to the NFF.
Prior to the question at Tuesday’s media doorstop, Mr Shorten said Shadow Treasurer Chris Bowen would provide more detail about the government’s announcement earlier that day, committing to a review on the tax measure and to defer its increase to a flat 32.5 per cent by six months at a cost of $40 million to the budget.
Mr Shorten said the government had effectively led to “an almost de facto strike” by backpackers choosing to visit Canada and NZ, rather than come to Australia.
However he did not state any desire by the party to get rid of the unpopular tax if they proved victorious at the July 2 election.
Mr Bowen’s comments were critical of the Coalition and his opposite number Scott Morrison for mishandling the tax matter and failure to find a resolution, around the recent budget.
But he said it had been “appropriate” for the Opposition to wait and see how the government responded to backlash over the tax; given rumours about various potential options being explored, like a 12-month delay.
However, Mr Bowen said the ALP would “continue our consultations, of course, with the sector” and “we will have more to say about it”.
That statement supported other comments from Mr Shorten this week saying his party would “go and talk to people”, if they formed government, before making any commitment on the backpacker tax.
Recent Senate budget estimates revealed the ALP had supported the tax increase immediately after the 2015 budget which came following a ruling by the ATO supporting working holiday makers paying some form of local taxation.
At the weekend, Opposition deputy-leader Tanya Plibersek debated Agriculture and Water Resources Minister Barnaby Joyce on the backpacker tax controversy with both MPs refusing to say they would kill off the unpopular tax altogether.
“We want to make sure that we fix the issue,” Mr Joyce said while adding a delay was needed to ultimately provide legislation and to “ultimately to get a fairer fit”.
Ms Plibersek said hundreds of millions of dollars were booked as savings in the federal budget for the backpacker tax and Mr Fitzgibbon had said “that we will deal with this in government”.
“Joel Fitzgibbon, our shadow minister has said that he'll work with the affected communities to make sure that they have the labour they need,” she said.
In response today, Mr Fitzgibbon said understanding the ALP’s position on the backpacker tax was dependent on how the NFF’s media release was read and interpreted.
He said he’d only ever said the tax should be scrapped immediately and was determined to ensure the issue was dealt with sooner and not delayed another six and a half weeks beyond the election time-frame.
Mr Fitzgibbon said while the government had announced a delay to the tax increase, the only way it could demonstrate that it was serious about the review was if the $500m in projected revenue wasn’t contained in Treasury’s soon to be released election, budget outlook.
“If the (Pre-Election Economic and Fiscal Outlook) statement comes out and the government is still claiming $500m in revenue for a tax they are claiming to review, we will certainly have more to say,” he said.
“I want this government to admit they got it wrong – we can’t wait another six and a half weeks.”
But in the media statement, Mr Finlay said the Coalition was now on its own in supporting the backpacker tax.
“We call on the Coalition to end the games and deliver certainty to rural Australia,” he said.
“How can the agriculture sector play its part in boosting economic growth and jobs without an adequate workforce?
“The tax has to go.
“We have offered a compromise and, if that’s not good enough, find another way to ensure that working holiday makers still want to come and work on Australian farms as soon as possible.”
The issue arrives after the Coalition announced on Tuesday that it would delay the scheduled July 1 tax increase on working holiday makers by six months, while a review was conducted by various departments and led by Mr Joyce.
The tax was scheduled to increase to 32.5pc flat rate on July 1 with no tax free threshold and was originally announced in last year’s federal budget.
But the NFF joined tourism and others industry sectors to run a public campaign to have the increase softened warning it was detrimental to the fragile supply of seasonal workforces; especially horticulture.
Mr Bowen also said the government would be tested over the issue on whether they would back out the savings and to not include them in the pre-election economic forecast; if they would ensure the sector was consulted going forward about the plans; and if they would make the tax retrospective.
“Labor has been doing the sensible thing: myself, Joel Fitzgibbon, Anthony Albanese consulting with the sector,” he said.
“We'll continue our consultations, but clearly the government has completely lost control of this.
“This backpacker measure, which the government knew about because remember this was a measure in the 2015 budget - they said they'd fix it in the 2016 budget, they didn't, and two weeks late we see it unravelling.”
Asked if Labor would scrap the backpacker tax in earlier interviews, Mr Shorten said he wanted to see if the Coalition was “actually keeping the scheme and banking the taxes they think they will raise or not”.
“Once we've seen what they do, then it becomes possible for Labor to make very clear what we will do, because it's all part of an economic picture,” he said.
“But in the meantime, we are deeply sceptical about the design of this tax, the impact it has on small business, the impact it has on tourism and the impact it's having on our farmers.”
Mr Albanese said Labor was “not the government” but its positon was “we'd sit down with the sector to come up with a solution”.
“What we are concerned about here is that the people who earn money in regional Australia, by and large spend money in regional Australia and we are concerned about the impact on jobs,” he said.
“What we have here is an ill thought out policy, they've banked $500 million in savings but what they haven't taken into account is the flight of backpackers that will happen, which means they don't pay any tax at all because they're not here.
“This is creating real issues for the tourism sector as well as for the agricultural sector.
“We've been sitting down with the tourism sector and the agricultural sector to come up with an appropriate solution.”
ACT Labor Senator Katy Gallagher said her party would look at the government's announcement on the backpacker tax and would “be a matter that I'm sure the Leader of the Opposition and the Shadow Minister will be discussing further”.
“But really, if the government was serious about this, this has been an issue that should have been resolved in the budget instead of being pushed out by a couple of months so it's just not believable,” she said of the deferral and review.
On talkback radio, Shadow Assistant Treasurer Andrew Leigh was told farmers who relied on backpackers for labour, were already being warned fewer numbers were coming to Australia.
But when asked for Labor's official stance on the backpacker tax and if it was staying or going, he did not provide a direct response but said, “We have been urging the Government to drop the backpacker tax”.
“This is a tax we don't believe should be instituted in the first place - but damage has surely already been done for backpackers that have already decided to pick another country than ours.”
Mr Fitzgibbon also told reporters on Tuesday, “Barnaby Joyce could fix this today by simply announcing they’re getting rid of the tax”.
“They made a mistake and of course indicating that he’ll give up that revenue that he has booked to pay for some of his loopier ideas in his failed Agriculture White Paper,” he said.