tag:theconversation.com,2011:/au/topics/backpacker-tax-27546/articlesbackpacker tax – The Conversation2016-12-02T03:11:29Ztag:theconversation.com,2011:article/697812016-12-02T03:11:29Z2016-12-02T03:11:29ZVIDEO: Michelle Grattan on the final week of parliament<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/jU-4Lz6J9pI?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>In the final fortnight of the parliament for the year the government clinched some deals on major pieces of legislation. Michelle Grattan tells University of Canberra deputy vice-chancellor Frances Shannon that it was important for Malcolm Turnbull to get the bills that triggered the double-dissolution election through.</p>
<p>“Given the need to be seen to be delivering I think that he would feel reasonably satisfied with these last couple of weeks. Although the backpacker tax, which finally was clinched in a deal with the Greens, was a very messy process,” Grattan says.</p>
<p>“I think that the government next year will have to show that it can get more things done and also that the things that it does get done are relevant to the average man or woman in the street.”</p><img src="https://counter.theconversation.com/content/69781/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the final fortnight of the parliament for the year the government clinched some deals on major pieces of legislation.Michelle Grattan, Professorial Fellow, University of CanberraFrances Shannon, Deputy Vice-Chancellor, Research, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/696382016-12-01T02:26:39Z2016-12-01T02:26:39ZIt’s good the government will report GDP per capita, but it shouldn’t stop there<figure><img src="https://images.theconversation.com/files/148215/original/image-20161201-17770-148pk4f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">David Leyonhjelm negotiated for the numbers in the budget to be reported in per capita terms.</span> <span class="attribution"><span class="source">AAP/Mick Tsikas</span></span></figcaption></figure><p>The government’s <a href="https://theconversation.com/turnbull-is-happy-to-horse-trade-if-it-gets-the-nags-over-the-line-69667">horse trading</a> over legislation with the senate will have a profound effect on the way the government reports economic data. </p>
<p>Part of the <a href="http://thenewdaily.com.au/money/finance-news/2016/11/28/abcc-cross-bench/">government’s agreement with Senator Leyonhjelm</a> to support the reinstatement of the Australian Building and Construction Commission was that many government budget numbers be reported in per capita (i.e. per person) terms. </p>
<p>So rather than reporting economic growth as one monolithic number, the government will take that number and divide it by the total population. Doing so will enable us to better see how much an average Australian has gained or lost. But we shouldn’t stop there. </p>
<p>There’s a lot more to improve in the way we talk about numbers. </p>
<h2>Why we measure GDP</h2>
<p>Every year the federal budget is split into a number of sections, with the <a href="http://www.budget.gov.au/2016-17/content/bp1/download/bp1.pdf">first</a> containing projections for the Australian economy and budget outcomes over the next four years. For example, “real GDP” is <a href="http://www.budget.gov.au/2016-17/content/bp1/download/bp1.pdf">projected</a> to grow by 2.5% in 2016-17. Real GDP is the size of all the goods and services produced by firms and government – everything from haircuts to new houses and submarines, taking into account inflation. </p>
<p>It is worth knowing how big GDP is because GDP represents income. It is only an approximation of income, albeit a pretty good one, because some of the income generated goes to overseas owners of capital and vice versa – we earn income from GDP produced by other countries that use our resources. But we want to know whether our income as a nation is going up and by how much. So GDP gives us one partial measure of our national economic performance and can be compared over time and with other countries.</p>
<h2>Why per capita is better</h2>
<p>According to critics of this approach, just saying that Australian real GDP is growing by 2.5% is misleading. It does not take into account population growth, which for Australia is <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3222.02012%20(base)%20to%202101?OpenDocument">projected to be</a> 1.7% over 2016-17. When the population also increases, real GDP alone does not provide an accurate representation of how much our income has gone up.</p>
<p>What if the population were to increase by more or less than 1.7%? </p>
<p>If the population were to increase by 2.5% then an increase in real GDP of 2.5% would leave each person on average no better off. If the population were to fall, as is happening in Japan, growth in GDP per capita would actually exceed growth in real GDP. This implies that each person on average would be better off than simple GDP growth would suggest.</p>
<p>GDP is forecast to growth by only <a href="https://data.oecd.org/gdp/real-gdp-forecast.htm#indicator-chart">1%</a> in Japan next year, but their population is also falling slightly. This means that their GDP per capita will grow more than 1%. Simply reporting real GDP growth for Japan is understating what is happening.</p>
<p>Measuring GDP in per capita terms, therefore, is useful because we want to know whether each of us on average is becoming better off and by how much. </p>
<h2>Numbers are meaningless without reference points</h2>
<p>But it’s not just growth numbers that will be improved by reporting them in per capita terms. The so-called “backpacker tax,” for example, would raise <a href="http://www.abc.net.au/news/2016-05-17/malcolm-turnbull-to-back-down-on-backpacker-tax/7420102">A$540 million</a> over three years at a rate of 32.5%, according to Assistant Treasurer Kelly O’Dwyer. But this can be framed differently depending on the reference points you choose. </p>
<p>On a per capita basis it is about A$22 per person over three years. But adding up these numbers over several years might also be misleading – the A$22 is of course only A$7 per year. The difference between a rate of 32.5% and 13%, the <a href="http://www.heraldsun.com.au/news/government-and-key-crossbench-senators-strike-deal-on-backpacker-tax/news-story/bd9c60f64ad5f96b495077957f4ceaed">rate proposed by key cross benchers</a>, would amount to about A$4 per person per year. </p>
<p>Putting these figures in per capita annual terms calls into question the time spent by the Parliament and media on this issue.</p>
<h2>Let’s not stop at per capita</h2>
<p>In fairness, the Australian Treasury <a href="http://www.budget.gov.au/2016-17/content/bp1/download/bp1.pdf">provides its key budget aggregates</a> for revenue, spending, the deficit, government debt in percentage change terms and adjusted for inflation, both of which are more meaningful than simply the current dollar figures. But it does not present them in per capita terms and this would be an improvement.</p>
<p>But why stop there? The budget deficit is subject to much scrutiny and attention in the media and Parliament. The reason is that it represents the increase in government indebtedness, which puts pressure on the country’s credit rating and increases future tax liabilities. However, like any business or household the source of the increase in indebtedness is crucial – in particular the distinction between recurring and capital spending. </p>
<p>If recurrent spending, which includes things like welfare and public servants’ salaries, exceeds total revenue the deficit is a burden on taxpayers in the future. But if the deficit is entirely explained by capital expenditure, such as on a new road or school, then there may not be a burden on future taxpayers provided we can be confident the capital expenditure will generate future income.</p>
<p>So Senator Leyonhjelm could have usefully demanded the distinction between recurrent expenditure and capital expenditure in reporting of budget aggregates. Nevertheless his foray into budget reporting is to be welcomed.</p><img src="https://counter.theconversation.com/content/69638/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ross Guest has in the past received funding from the Australian Research Council but does not have any active ARC grants.</span></em></p>The government has agreed to report some budget numbers on a per capita basis. But there’s a lot more to do in how we talk about numbers.Ross Guest, Professor of Economics and National Senior Teaching Fellow, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/696502016-11-30T08:12:50Z2016-11-30T08:12:50ZWhy it’s now Labor’s turn to compromise on the backpacker tax<p>With time running out until federal parliament pulls up stumps for the year, the backpacker tax debacle has reached new heights. Yesterday the issue <a href="https://theconversation.com/what-the-government-can-learn-from-the-backpacker-tax-debacle-69550">seemed resolved</a> because of a 15% tax rate deal between One Nation, Nick Xenophon and the Coalition. It now appears to have <a href="http://www.canberratimes.com.au/federal-politics/political-news/senate-snubs-government-deal-on-backpacker-tax-in-surprise-turnbull-government-defeat-20161130-gt0klf.html">unravelled, with the Senate voting in support of a 10.5% tax rate</a> for backpackers.</p>
<p>So unless we’re willing to charge backpackers the ludicrous tax rate of 32.5% from the first dollar earned, it’s now incumbent upon someone to blink.</p>
<p>The Coalition, after saying “never ever” to going below 19%, has already agreed on 15%. Having already done this, it seems unlikely the Liberals would now be willing to agree to 10.5%. Perhaps the Nationals can be persuaded to <a href="http://www.theaustralian.com.au/news/latest-news/senate-insists-on-105pct-backpacker-tax/news-story/3bc9e2bdecde295de387e265a08feaae">cross the floor</a>, like some did on the <a href="http://www.smh.com.au/federal-politics/political-news/nationals-stage-a-latenight-revolt-in-the-senate-over-the-adler-shotgun-ban-20161121-gsueqe.html">Adler shotgun</a> a few weeks back.</p>
<p>Equally unlikely, however, is that One Nation renegade Rod Culleton or independent senator Derryn Hinch will agree to 15%, given that they’ve announced today that they will only support 10.5%.</p>
<p>So it seems like the ball is firmly in Labor’s court. If Labor gets behind a 15% tax rate then this issue can be resolved. During the election, Labor didn’t present a view on the appropriate rate of taxation for backpackers, but since then has come out in favour of a 10.5% rate.</p>
<h2>The politics of the backpacker tax</h2>
<p>What has been particularly interesting about the politics of the backpacker tax is the confusion of messages being sent by the major parties. </p>
<p>The Coalition has long been the champion of regional Australia and yet it proposed the 32.5% tax with no consultation with this core constituency, and without seemingly considering the impact of the tax on the horticulture industry. </p>
<p>Now the Coalition has changed its position, lining up with the National Farmers’ Federation in advocating for a 15% tax. Ironically, it is Labor, traditionally the friend of local workers, that is advocating for growers to have easier access to backpackers, falling in behind Jacqui Lambie’s 10.5% tax rate.</p>
<p>Behind the political confusion lies a deeper uncertainty about the role backpackers play in the Australian workforce. On the one hand, there is a concern that they be sufficiently remunerated so they remain part of the workforce. There’s an <a href="https://theconversation.com/factcheck-would-backpackers-be-better-off-working-in-australia-than-nz-england-or-canada-with-a-19-tax-rate-69332">argument that we don’t want them to take their working holiday in a range of competitor countries</a> including the UK, New Zealand and Canada.</p>
<p>On the other hand, there is a concern that they contribute to the economy through paying tax on a par with everyone else, and that they are not too well paid so as to flood the labour market and replace local jobs. There is a delicate balance here.</p>
<p>And, there is a related issue that is not being spoken about at all in this debate. A <a href="https://www.fairwork.gov.au/about-us/access-accountability-and-reporting/inquiry-reports#417-visa">report</a> by the Fair Work Ombudsman recently exposed the extent to which backpackers were being exploited in the horticulture industry. Many backpackers are paid off the books at well below award wages. The issue of tax is moot for these workers.</p>
<h2>Why 15% is the appropriate tax rate</h2>
<p>Having conducted a year-long, comprehensive review into the labour needs of the Australian vegetable industry, it is our opinion that the appropriate tax rate for backpackers is 15%. </p>
<p>Our research has shown that growers in particular regions have a very heavy reliance on backpacker labour which has come to characterise the industry. At 15% backpackers would <a href="https://theconversation.com/factcheck-does-the-backpacker-tax-rate-leave-backpackers-better-off-in-australia-than-nz-england-or-canada-69332">still receive more income in Australia</a> than they would receive in NZ with a 10.5% tax rate, or in Canada or the UK.</p>
<p>Growers depend upon backpackers at harvest time and without this source of labour, and without a genuine alternative, a vast array of fruit and vegetables will be lost. The harvest season is now upon us and with growers in Tasmania reporting a <a href="http://www.abc.net.au/news/2016-11-18/what-you-need-to-know-about-the-backpacker-tax-analysis/8034584">40% drop in backpackers</a> applying for horticultural jobs because of the political uncertainty around the tax, the risks are too great of leaving this issue unresolved. </p>
<p>In order to meet the needs of growers for the current harvest season, a tax rate of 32.5% is simply too high to incentivise backpackers to work in the industry. Equally however, a tax rate of 10.5% is too low when important contextual factors are taken into account.</p>
<p>There are currently two migrant labour supply solutions provided by the Australian government for growers. One is the <a href="https://www.border.gov.au/Trav/Visa-1/417-">Working Holiday Maker visa</a> which allows backpackers a second year extension on their visa if they complete an 88 day period in certain industries. About 90% of backpackers work in horticulture to meet this requirement, providing an army of between 33,000-40,000 to growers in the past few years. </p>
<p>The second option for growers is to use the <a href="https://www.employment.gov.au/seasonal-worker-programme">Seasonal Workers Program</a> which enables the sponsorship of workers from the Pacific for a period of six to nine months. Overwhelmingly, growers use the backpacker visa instead of the Seasonal Workers Program. In its current iteration, the Seasonal Workers Program doesn’t meet the needs of industry.</p>
<p>It is both important and appropriate that the two labour supply solutions be taxed at the same rate. Workers in the Seasonal Workers Program are taxed at 15% and so should backpackers.</p>
<p>Our research has found that the Seasonal Workers Program is a superior labour supply solution for the horticulture industry. It has the potential to become a much better source of workers for growers, to supplement the participation of local workers. In our <a href="http://horticulture.com.au/addressing-labour-supply-issues-in-the-vegetable-industry/">research report</a>, to be released for Horticulture Innovation Australia in early 2017, we advocate the redesign and expansion of the Seasonal Workers Program so that it better meets the needs of growers and workers.</p>
<p>The use of backpackers in the horticulture industry has long undermined the ability of the industry to grow and plan for the future, has been associated with endemic exploitation of workers. It has also resulted in the use of a far less productive and reliable group of workers. In recent months the political uncertainty around the backpacker tax has exposed the unpredictability of backpackers as a labour supply solution for the industry.</p>
<p>The horticulture industry deserves better. It contributes <a href="http://www.agriculture.gov.au/ag-farm-food/hort-policy/horticulture_fact_sheet#trade-statistics">A$2.1 billion in exports</a> and produces <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features10Dec+2012">93% of fresh food</a> consumed in Australia. It’s an industry of critical importance to Australia’s food security and economic prosperity.</p>
<p>Labor needs to recognise that a 15% tax rate is the appropriate outcome to this mess. Going forward, it is now incumbent upon both major political parties to develop long-term, bipartisan labour supply solutions for the horticulture industry.</p><img src="https://counter.theconversation.com/content/69650/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr Joanna Howe is the leader of a project investigating labour supply options in the Australian vegetable industry (VG 15025) commissioned by Horticulture Innovation Australia in 2016. The project's report, co-authored with Associate Professor Alex Reilly, Associate Professor Diane van den Broek and Dr Chris F Wright will be released in early 2017.</span></em></p><p class="fine-print"><em><span>
Alex Reilly is currently conducting funded research into labour supply in the Australian vegetable industry for Horticulture Innovation Australia, and into international students and work for the Fair Work Ombudsman.
Alex is a volunteer on the Management Committee of the Refugee Advocacy Service of South Australia, which offers means tested legal and migration assistance to asylum seekers who are not eligible for government assistance.
</span></em></p><p class="fine-print"><em><span>Chris F. Wright is currently working on research projects funded by the University of Sydney and Horticulture Innovation Australia.</span></em></p><p class="fine-print"><em><span>Diane van den Broek works for the University of Sydney. She has received funding from Hort Innovation. </span></em></p>The use of backpackers in the horticulture industry has long undermined the ability of the industry to grow and plan for the future.Joanna Howe, Senior Lecturer in Law, University of AdelaideAlex Reilly, Deputy Dean and Director of the Public Law and Policy Research Unit, Adelaide Law School, University of AdelaideChris F. Wright, Postdoctoral Research Fellow, University of SydneyDiane van den Broek, Senior Lecturer, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/693322016-11-30T01:19:18Z2016-11-30T01:19:18ZFactCheck: would backpackers be better off working in Australia than NZ, England or Canada?<p><em>Editor’s note: The original version of this article, published at 12.19pm AEDT on November 30, 2016, has been updated to reflect the news that the government’s <a href="https://theconversation.com/backpacker-tax-deal-finally-at-one-nations-15-rate-69477">proposed 15% backpacker tax</a> suffered a <a href="https://theconversation.com/turnbull-government-secures-abcc-but-suffers-sudden-defeat-on-backpacker-tax-69623">surprise defeat in the Senate</a>.</em></p>
<p><em>The Senate instead supported Labor’s amendment for a 10.5% rate. If an agreement can’t be reached, the rate will <a href="https://theconversation.com/turnbull-government-secures-abcc-but-suffers-sudden-defeat-on-backpacker-tax-69623">default to 32.5%</a>.</em></p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/pS40DtriMaI?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Deputy Prime Minister Barnaby Joyce, speaking to journalists on November 23, 2016.
Watch from 14.07.</span></figcaption>
</figure>
<blockquote>
<p>We come up with a rate – 19%. Why? Because that means that we are competitive in net take home pay for backpackers coming to Australia. In fact, they’re better off coming to Australia than if they went to New Zealand, Canada or England… <strong>– Deputy Prime Minister Barnaby Joyce, speaking to journalists, November 23, 2016.</strong> (Watch from 13:25.)</p>
</blockquote>
<p>After 18 months of debate about how much tax working holiday makers should pay on their income, uncertainty over the “backpacker tax” continues.</p>
<p>While negotiations were underway last week, Deputy Prime Minister Barnaby Joyce said that the government’s proposed 19% tax rate would mean backpackers were better off coming to Australia than to New Zealand, Canada or England.</p>
<p><a href="https://theconversation.com/backpacker-tax-deal-finally-at-one-nations-15-rate-69477">By Monday</a>, the Coalition agreed to drop that tax rate from 19% to 15%, in a deal that was expected to pass the Senate crossbench.</p>
<p>But on Wednesday – around the time this FactCheck was first published – that <a href="https://theconversation.com/turnbull-government-secures-abcc-but-suffers-sudden-defeat-on-backpacker-tax-69623">proposal was defeated</a>, with the Senate supporting Labor’s amendment for a 10.5% rate.</p>
<p>So while the arguments in Parliament continue, The Conversation asked two experts to check if Barnaby Joyce was right: would backpackers have been better off working in Australia and paying a 19% tax rate than if they worked in New Zealand, Canada or England? And how does that compare to backpackers’ take home pay if they were paying lower 15% or 10.5% tax rates?</p>
<h2>Checking the source</h2>
<p>When asked for sources to support the statement, a spokesperson for Barnaby Joyce provided an extensive response, including a table (reproduced below) showing the tax paid and net income for working holiday makers, based on a Department of Agriculture and Water Resources <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/BackpackerTaxBill2016/Submissions">submission</a> to a Senate committee. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=728&fit=crop&dpr=1 600w, https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=728&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=728&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=915&fit=crop&dpr=1 754w, https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=915&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/147522/original/image-20161125-15333-2jz6hb.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=915&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">International comparison of tax paid and net income, average per working holiday maker (PPP means the purchasing power parity adjusted exchange rate). WHM stands for working holiday maker.</span>
<span class="attribution"><a class="source" href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/BackpackerTaxBill2016/Submissions">Department of Agriculture and Water Resources</a></span>
</figcaption>
</figure>
<p>You can read the rest of the spokesperson’s response <a href="https://theconversation.com/drafts/69414/edit#">here</a>.</p>
<h2>Was Joyce right?</h2>
<p>The deputy prime minister was correct. Whether the rate is 19%, 15% or 10.5%, backpackers are better off – in terms of after-tax wages – working in Australia than New Zealand, Canada or England. </p>
<p>Even after accounting for the tax-free thresholds in Canada and England, at a 19% tax rate a working holiday maker earning the minimum wage would take home a bigger pay packet in Australia than in New Zealand, Canada or England.</p>
<p>A 15% or 10.5% tax rate would make Australia more favourable from an after-tax income perspective. </p>
<h2>How do we calculate this?</h2>
<p>To calculate how much take home pay backpackers would receive, we need to compare the minimum wages, tax rates and cost of living in each of the countries mentioned. </p>
<p>Joyce based his calculations on data contained in the Department of Agriculture and Water Resources’ <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/BackpackerTaxBill2016/Submissions">submission</a> (the Department’s submission is number 23, found on page 2) to the recent <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/BackpackerTaxBill2016">parliamentary inquiry</a> into the backpacker tax. </p>
<p>The tax rates and calculations used in the Department of Agriculture and Water Resources submission are accurate, and take into account the tax-free thresholds in <a href="http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html">Canada</a> and the <a href="https://www.gov.uk/income-tax-rates/current-rates-and-allowances">United Kingdom</a>.</p>
<p>The department calculated the after-tax income received by a working holiday maker who works 734.5 hours (approximately 28.25 hrs per week) on the <a href="https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/minimum-wages#current-national-minimum-wage">minimum wage</a>, and adjusted for cost of living differences by using <a href="http://www.oecd.org/std/prices-ppp/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm">purchasing power parity</a> exchange rates.</p>
<p>Using those figures, a working holiday maker in Australia taxed at 19% would receive an after-tax income of A$10,530. This does not include compulsory superannuation. So a working holiday maker in Australia would end up receiving more than this, even with the <a href="http://sjm.ministers.treasury.gov.au/media-release/104-2016/?utm_source=wysija&utm_medium=email&utm_campaign=Media+Release+-+Better+working+holiday+maker+tax+arrangements">95% tax</a> they will pay on superannuation payments when they leave the country.</p>
<p>The same working holiday maker would receive after-tax income of A$10,126 in New Zealand, A$9,837 in Canada and A$10,470 in the United Kingdom.</p>
<p>With a lower 15% rate, a working holiday maker in Australia would receive after tax income of A$11,050 (before superannuation), or A$11,112 (including superannuation and the tax on superannuation).</p>
<p>And if the rate were cut to 10.5%, as Labor and others are pushing for (though the government looks unlikely to support that), a working holiday maker in Australia would receive after-tax income of A$11,635 (before superannuation), or A$11,697 (including superannuation and the tax on superannuation).</p>
<p>So whether it’s a 10.5% rate, 15% rate or a 19% rate, working holiday makers receive a higher after-tax income in Australia than they would in New Zealand, Canada and the United Kingdom. This is despite the fact that working holiday makers in Canada and the United Kingdom receive the benefit of a tax-free threshold. That’s because <a href="https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/minimum-wages">Australia’s minimum wage</a> is higher than those in <a href="https://www.labour.gov.on.ca/english/es/pubs/guide/minwage.php">Canada</a>, <a href="https://www.business.govt.nz/hiring-and-manage/hiring-people/minimum-pay-rules/">NZ</a> and the <a href="http://www.minimum-wage.co.uk/">UK</a>.</p>
<iframe src="https://datawrapper.dwcdn.net/rXvu3/3/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="445"></iframe>
<h2>Residents and non-residents</h2>
<p>The amount of tax a working holiday maker currently pays in Australia depends on whether or not they’re considered an Australian resident. Residents are entitled to a <a href="https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Claiming-the-tax-free-threshold/">tax-free threshold of A$18,200</a>. After that, <a href="https://www.ato.gov.au/rates/individual-income-tax-rates/">Australian residents pay</a> 19% tax on income up to A$37,000, and 32.5% tax on amounts between A$37,000 and A$87,000. Residents who earn less than A$66,667 are entitled to a <a href="https://www.ato.gov.au/Individuals/Income-and-deductions/Offsets-and-rebates/Low-income-earners/">low-income tax offset</a>.</p>
<p>In contrast, <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201516/Holiday">non-residents are taxed at 32.5%</a> from their first dollar earned in Australia.</p>
<p>The same tax rates apply for residents and nonresidents for amounts above A$80,000. </p>
<p>Under the current law, there’s no set tax residency status for working holiday makers. A working holiday maker is considered a resident for tax purposes if they are in Australia for <a href="https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/Residency-tests/">183 days or more</a> during the income year, unless their usual place of abode is outside Australia and they don’t intend to take up residence in Australia. In that case, they will be a non-resident for tax purposes irrespective of whether they were in Australia for more than 183 days. </p>
<h2>Tax rate not the only factor</h2>
<p>New Zealand’s 10.5% tax rate has been a <a href="http://tasmaniantimes.com/index.php?/pr-article/backpacker-tax-deal-a-blow-to-competitive-advantage/">point of comparison</a> during the debate over the backpacker tax. But the tax rate is just one factor that determines the take home pay earned by working holiday makers. Minimum wages make a big difference to the outcome – and Australia has the highest minimum wage of the countries discussed.</p>
<p>It’s worth noting that the <a href="http://www.ird.govt.nz/how-to/taxrates-codes/rates/itaxsalaryandwage-incometaxrates.html">10.5% rate in New Zealand applies to all taxpayers</a>, not just working holiday makers. And there are other differences between the tax systems in Australia and New Zealand. For example, in New Zealand, taxpayers aren’t able to claim any work-related deductions.</p>
<h2>Superannuation claw-back</h2>
<p>Under the 15% deal <a href="https://theconversation.com/backpacker-tax-deal-finally-at-one-nations-15-rate-69477">proposed</a> by the Coalition on Monday (but then <a href="https://theconversation.com/turnbull-government-secures-abcc-but-suffers-sudden-defeat-on-backpacker-tax-69623">rejected</a> in the Senate on Wednesday), any superannuation payments earned by working holidays makers would be taxed at 95% when they leave Australia. This would result in an effective tax rate of approximately 24%. That’s 15% income tax and 9% from superannuation.</p>
<p>At first blush this appears high when compared to New Zealand’s 10.5%. But working holiday makers in New Zealand <a href="https://www.newzealandnow.govt.nz/work-in-nz/employment-rights">don’t receive superannuation</a> at all.</p>
<p>New Zealand does have a “KiwiSaver” retirement savings program, similar to Australia’s superannuation program. But to be eligible to join KiwiSaver you must be a New Zealand citizen or entitled to live in New Zealand indefinitely. Someome who holds a temporary, visitor, or work permit isn’t able to join.</p>
<p>A working holiday maker in Australia working 734.5 hrs at the minimum wage would be entitled to A$1,235 in superannuation payments. When they leave Australia, they would keep A$61.75 of their superannuation. But that’s in addition to their after-tax salary of A$11,050, which is higher than what they would receive in New Zealand.</p>
<h2>Verdict</h2>
<p>Barnaby Joyce’s statement that with a 19% tax rate in place, working holiday makers would be better off in terms of net take home pay in Australia than in New Zealand, England or Canada was correct.</p>
<p>Even after taking into account the tax-free thresholds in Canada and the UK, and the 10.5% tax rate in New Zealand, at a 19% tax rate a working holiday maker earning the minimum wage would receive a bigger pay packet in Australia than in New Zealand, Canada or the United England. </p>
<p>At a <a href="https://theconversation.com/backpacker-tax-deal-finally-at-one-nations-15-rate-69477">15% tax rate</a> or <a href="https://theconversation.com/turnbull-government-secures-abcc-but-suffers-sudden-defeat-on-backpacker-tax-69623">10.5% tax rate</a>, backpackers would be even better off.
<strong>– Kathrin Bain</strong></p>
<hr>
<h2>Review</h2>
<p>The author is correct based on the above facts and assumptions made by the Department of Agriculture and Water Resources. </p>
<p>The author has been fair and they have represented the data accurately. <strong>– John McLaren</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/69332/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Deputy Prime Minister Barnaby Joyce said backpackers would be better off working in Australia with a 19% tax than in New Zealand, England and Canada. Is that true? And what would a 15% or 10.5% tax mean?Kathrin Bain, Lecturer, School of Taxation & Business Law, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/695502016-11-29T02:38:47Z2016-11-29T02:38:47ZWhat the government can learn from the backpacker tax debacle<p>At the eleventh hour, and after a protracted saga beginning with the May 2015 federal budget, the furore over the backpacker tax has finally ended. Despite the federal government initially proposing a 32.5% tax rate for backpackers, followed by a post-election compromise of 19% and a refusal to negotiate below this, <a href="https://theconversation.com/backpacker-tax-deal-finally-at-one-nations-15-rate-69477">the federal government reached a deal</a> with One Nation and Nick Xenophon to introduce a 15% tax rate from the first dollar earned. But what the backpacker tax controversy points to is the inadequacy of relying on backpackers as the primary labour source for critical jobs.</p>
<p>There’s little doubt this deal comes as welcome relief to fruit and vegetable growers who rely on backpackers at harvest time. With the harvest now well underway in many parts of the country, it is crucial that backpackers are willing and available to work in the sector. <a href="http://www.abc.net.au/news/2016-11-18/what-you-need-to-know-about-the-backpacker-tax-analysis/8034584">For example, in Tasmania</a>, the indecision around the backpacker tax has led farmers to report a 40% drop in the number of backpackers working in the sector. </p>
<p>It has been extremely short-sighted for Treasurer Scott Morrison and his government to quibble about the minuscule contribution that backpackers can make to the budget bottom line, when the horticulture sector is so reliant on backpacker labour for its very existence. Horticulture is critical to Australia’s economic development and food security into the future.</p>
<p>The sector <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features10Dec+2012">produced 93% of the total volume of food</a> consumed in Australia, and is part of an agriculture industry that contributed A$48.7 billion to our GDP in 2010/11. It also supports an export horticulture market <a href="http://www.agriculture.gov.au/ag-farm-food/hort-policy/horticulture_fact_sheet#trade-statistics">valued at A$2.1 billion per annum</a>. It’s too important an industry to suffer because of a lack of stable workers resulting from political inertia, or because the <a href="http://www.dailytelegraph.com.au/news/national/backpacker-tax-cut-to-15-per-cent-in-triumph-for-common-sense/news-story/0ff5a035c7f7fa39f3406555a6d1d330?nk=17cc96328de397536c208f246244894b-1480299369">Treasurer wants to offset</a> A$120 million lost from budget coffers.</p>
<p>Since the introduction of an incentive for backpackers to work in certain occupations for 88 days in order <a href="https://www.border.gov.au/Trav/Visa-1/417-">to secure a second year visa extension</a> in 2005, between 30,000 and 40,000 backpackers apply for this additional year on their visa, using a stint in horticulture to meet the criteria. This has meant that backpackers have become the dominant source of labour supply at harvest time for growers.</p>
<p>But this poses many serious risks for growers, who have no choice but to rely on backpacker labour as part of their business model.</p>
<p>Backpackers do not come here on a work visa, their visa is officially for “cultural exchange”. We are increasingly reliant on backpackers to perform low-skilled jobs in the economy and in particular, in harvest-related jobs. But as the backpacker tax saga has exposed, backpackers are not a stable labour supply. </p>
<p>Backpackers are young people who will change their planned trip to Australia based on a number of variables. Changes in taxation arrangements, fluctuating exchange rates and Australia’s reputation as a desirable tourist destination are all factors outside of growers’ control. Nonetheless, they impact upon the decision of backpackers to travel to Australia and work in horticulture.</p>
<p>Another key issue with using backpackers as the central labour supply for the horticulture sector is the vulnerability of this group in the labour market. <a href="https://www.fairwork.gov.au/about-us/news-and-media-releases/2016-media-releases/october-2016/20161015-417-inquiry-media-release">A landmark report by the Fair Work Ombudsman</a> into the backpacker visa found that the 88 day extension created a license for unscrupulous growers to <a href="http://www.abc.net.au/news/2016-10-15/ombudsman-report-reveals-widespread-417-visa-exploitation/7934780">coerce backpackers into exploitative work</a>. </p>
<p>The Ombudman’s inquiry uncovered countless examples of wage underpayments and working conditions that were not compliant with the award given to these workers- the Horticulture Award. If the instances of exploitation prove to be endemic, arising from the use of backpacker labour in the horticulture sector, it’s highly likely there will be increasing calls for the second year extension for backpackers to be abolished.</p>
<p>But exploitation of backpackers is not just an issue for the workers themselves. It’s an issue that undermines the viability of the entire horticulture sector. </p>
<p>As Emma Germano, general manager of I Love Farms <a href="http://www.abc.net.au/tv/qanda/txt/s4547903.htm">told Q&A a few weeks back</a>, “the biggest issue” she faces is that the horticulture sector is not a level playing field for growers, as the non-compliant ones are able to use worker exploitation to sell their produce at a much lower cost. </p>
<p>What we need is a comprehensive solution for addressing growers’ needs. Although the government’s compromise has sought to neutralise this as a political issue, it fails to address the underlying problem- using an unstable labour source for an industry of critical importance to Australia’s food security and economic prosperity. </p>
<p>Similarly, although Labor is doing its best to keep the backpacker issue alive to maximise the government’s discomfort, it also does not have a sustainable and coherent policy around how farmers can best meet their labour needs at harvest time. Labor’s policy is to keep the backpackers coming, despite all that we now know about the inadequacy of backpackers as the primary labour solution for growers.</p>
<p>Australia needs a more targeted and sustainable way of meeting farmers’ labour needs. This should be through a dedicated pathway for horticulture workers, rather than a backdoor labour source like the Working Holiday Maker visa, which is riddled with problems. A dedicated pathway for horticulture workers would allow growers to plan for the harvest time and would allow regulators like the Fair Work Ombudsman to more properly monitor the wages and conditions of these workers.</p>
<p>In developing a dedicated visa pathway for horticulture workers, new and innovative attempts should be made to encourage local workers into the sector. Nick Xenophon’s proposal for the unemployed to remain on benefits whilst employed in horticulture is a step in the right direction. </p>
<p>His proposal reduces the disincentive to work for this cohort, and through the promise of a greater financial reward, it may lead to them gaining vital work experience and skills that make them employable. Nonetheless, it is clear that local workers alone cannot meet the labour needs of the horticulture sector. </p>
<p>Although the backpacker tax debacle has been an unedifying spectacle of policy-making on the run and partisan politics, it has exposed the vulnerability of Australian growers at harvest time. This presents an opportunity for us to pave the way for more far-reaching reform that addresses the core problem of labour supply challenges facing the horticulture sector and the need to develop more targeted and sustainable visa pathways to supplement the local workforce.</p><img src="https://counter.theconversation.com/content/69550/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr Joanna Howe is the leader of a project investigating labour supply options in the Australian vegetable industry (VG 15025) commissioned by Horticulture Innovation Australia in 2016. The project's report, co-authored with Associate Professor Alex Reilly, Associate Professor Diane van den Broek and Dr Chris F Wright will be released in early 2017.</span></em></p>The controversy over changes to the backpacker tax shows the inadequacy of relying on backpackers as the primary labour source for a vital industry.Joanna Howe, Senior Lecturer in Law, University of AdelaideLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/694052016-11-25T00:52:14Z2016-11-25T00:52:14ZVIDEO: Michelle Grattan on One Nation’s troubles<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/HnAntSnWY-A?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>Tensions between Pauline Hanson and her beleaguered One Nation senator Rod Culleton have been on open display this week, raising the question of whether the party will be able to hold it all together. </p>
<p>Michelle Grattan tells University of Canberra vice-chancellor Deep Saini that it’s going to be quite hard for Hanson to keep her senators well disciplined.</p>
<p>“At the same time it’s obvious that both sides of politics are now really fearing Pauline Hanson’s electoral power. We heard George Brandis caught on an open mic telling the Victorian Liberal president that One Nation really was going to be quite significant at the next state election [in Queensland] and I think that both sides of politics feel that,” Grattan says. </p>
<p>“You have this paradox in a sense – rising importance of One Nation electorally but difficulties in keeping the show together in Canberra, in the Senate, where of course it’s also powerful.”</p><img src="https://counter.theconversation.com/content/69405/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Tensions between Pauline Hanson and her beleaguered One Nation senator Rod Culleton have been on open display this week, raising the question of whether the party will be able to hold it all together.Michelle Grattan, Professorial Fellow, University of CanberraPaddy Nixon, Vice-Chancellor and President, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/692762016-11-23T04:01:05Z2016-11-23T04:01:05ZPolitics podcast: Barnaby Joyce on the state of the National Party<figure><img src="https://images.theconversation.com/files/147120/original/image-20161123-19712-1a3ttyk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> <span class="attribution"><span class="source">Mick Tsikas/AAP</span></span></figcaption></figure><p>Earlier this week, footage aired of Attorney-General George Brandis speculating that Queensland’s Liberal National Party might demerge. But Nationals leader and Deputy Prime Minister Barnaby Joyce says this won’t happen. </p>
<p>“It’s not going to happen. You know why? Because the people who make that decision is not George, or myself or anybody else, it’s the membership and the membership would have to decide they want to do it and I haven’t heard any big swathes of members having meetings saying that want to demerge.”</p>
<p>Joyce tells Michelle Grattan the Nationals need to differentiate themselves from the Liberals. </p>
<p>“I think people clearly understand there’s a difference between the National Party and the Liberal Party. They recognise the qualities in both. If there wasn’t a reason to differentiate then you would amalgamate. So I’m very – always have been – parochially National. </p>
<p>"When I first came into politics back in 2005 and we got down to 12 members and senators I think, there was always this ‘oh we should just fold this show up’ and I fought as hard as I could with others to make sure that didn’t happen,” Joyce says.</p>
<p>Acknowledging the threat posed by One Nation, Joyce puts that party’s success into the context of a global wave of right-wing populism.</p>
<p>“In those messages are things that matter to people - are messages that matter, that resonate. People wouldn’t just change [their vote] because they got a giggle. They change because they get a message and go ‘yep, that’s all I needed to know and that’s enough for me to change my vote’. And that’s what’s happening now and we’ve got to compete in that space.”</p>
<p>Joyce also has a reality check for his colleagues pushing for changes to Section 18C of the Racial Discrimination Act.</p>
<p>“There’s a set of people who are more intensely involved in politics and they might be concerned – but if you think I go past the guys working on the road and as I say ‘g'day’ to them and ask them how’s the job going [that] they’d say ‘I really want to talk to you about 18C’ – no they don’t. </p>
<p>"They are interested in the things they can touch. They do not occupy themselves in the deeper philosophical thoughts.</p>
<p>"What we’ve got to be really careful of is once you leave the party room meeting – whether it’s here or whether it’s your branch meeting back in the country – don’t think that’s the issue that’s going to get across to people in the pub on a Friday night.” </p>
<hr>
<p><em>Music credit: “What tomorrow brings”, by Ketsa on the Free Music Archive</em></p><img src="https://counter.theconversation.com/content/69276/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Earlier this week, footage aired of George Brandis speculating that Queensland's Liberal National Party might demerge. But Barnaby Joyce says this won't happen.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/664222016-10-11T19:08:14Z2016-10-11T19:08:14ZHow migrant workers are critical to the future of Australia’s agricultural industry<figure><img src="https://images.theconversation.com/files/140218/original/image-20161004-20221-lg6zhm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia takes in about half of all working holidaymakers who enter OECD countries.</span> <span class="attribution"><span class="source">AAP/Dan Peled</span></span></figcaption></figure><p>More than 900,000 immigrants on permanent and temporary visas enter Australia each year. Most live and work in Australian capital cities; immigrants are more urbanised than the average Australian today.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=295&fit=crop&dpr=1 600w, https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=295&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=295&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=371&fit=crop&dpr=1 754w, https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=371&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/140388/original/image-20161004-20239-1ti049h.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=371&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">New Immigrants Improving Productivity in Australian Agriculture report.</span></span>
</figcaption>
</figure>
<p>However, in the last decade or so, new visa pathways have opened up to attract new immigrant workers and their families to the Australian bush. Increased chances of selection attracts permanent skilled immigrants to accept employment in regional and rural towns.</p>
<p>At the same time, increasing numbers of temporary migrants on working holiday, student and skilled 457 visas are attracted to the bush. A new program for Pacific Seasonal Workers has also been introduced. </p>
<p>Immigrant workers add substantially to productivity in the Agricultural industry, a <a href="https://rirdc.infoservices.com.au/items/16-027">new report</a> reveals.</p>
<h2>Growth and benefits</h2>
<p>For policymakers, the attraction of getting migrants to rural areas is that it helps reduce labour shortages – particularly during seasonal harvesting peaks – and counteracts the trend of population movement away from the bush to the metropolis.</p>
<p>Immigrants, including refugees, play a critical role in the Australian agricultural industry. Some of these immigrants become entrepreneurs, opening up a business. Skilled immigrants in the agricultural sector were also much more likely to have set up their own business (15%) than those in other industries (9.6%).</p>
<p>When set against the Australian average rate of entrepreneurship (those in the workforce who are self-employed or employers) of 10%, this propensity for immigrant entrepreneurship in the Australian agricultural sector is very encouraging, since entrepreneurs drive employment and productivity growth in the industry.</p>
<p>457 visa skilled workers find employers in the bush eager to sponsor their immigration application, particularly in professional and technical occupations. Working holiday makers fill critical jobs during harvesting and picking seasons.</p>
<p>Seasonal workers from the Pacific are eager to supplement the income of their families back home via remittances. They also get to learn new skills.</p>
<p>Immigrant farmers fill the growing intergenerational gap in farm succession and bring with them new technologies and innovations to Australian farming. Zimbabwean immigrant Nicky Mann and her husband introduced hydroponic rose-growing at their NSW central coast operation. Vietnamese and Chinese market gardeners have introduced many new vegetables to expand Australians’ food horizons.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=503&fit=crop&dpr=1 600w, https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=503&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=503&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=632&fit=crop&dpr=1 754w, https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=632&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/140389/original/image-20161004-16660-189oxbv.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=632&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">New Immigrants Improving Productivity in Australian Agriculture report.</span></span>
</figcaption>
</figure>
<p>Australia takes in about half of all working holiday makers who enter OECD countries. They can work and travel around Australia from job to job. The carrot is a 12-month extension to their visa if they work more than 88 days in the bush. The agriculture, forestry and fishing industries receive the greatest benefit from this arrangement.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/140403/original/image-20161005-16660-deu9w0.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">New Immigrants Improving Productivity in Australian Agriculture report.</span></span>
</figcaption>
</figure>
<p>Working holiday markers come from more than 20 countries. The UK, South Korea, Ireland, Germany, Taiwan and France provide the largest numbers. Fieldwork with Korean working holiday makers found the majority arrived with the intention of working in the agricultural industry.</p>
<p>Most reported that the best thing about their experience was that they had good relations with the non-Koreans they worked with in Australia, learned new skills, had to opportunity to improve their English, and received good wages.</p>
<p>The <a href="https://www.employment.gov.au/seasonal-worker-programme">Pacific seasonal workers program</a> allows workers from East Timor, Nauru, Kiribati, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu to work in low-skilled jobs for up to seven months in a 12-month period. Most work in the horticultural industry.</p>
<p>The annual intake has grown from around 400 in 2010-11. It is now an uncapped, demand-driven immigration stream that has expanded to jobs in the broader agriculture industry – including the accommodation sector.</p>
<p>Many permanent and temporary immigrants in the bush, particularly those who work in the agricultural industry, report receiving a warm welcome. This undermines existing stereotypes.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=326&fit=crop&dpr=1 600w, https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=326&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=326&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=410&fit=crop&dpr=1 754w, https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=410&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/140406/original/image-20161005-30459-18cjv58.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=410&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">New Immigrants Improving Productivity in Australian Agriculture report.</span></span>
</figcaption>
</figure>
<p>Many skilled permanent immigrants report strong local connections through sporting, community, school and religious social activities in their regional, rural and remote towns.</p>
<p>Those who work in the agricultural industry report a higher level of social engagement – with the exception of sporting activities – than do other immigrants.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=464&fit=crop&dpr=1 600w, https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=464&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=464&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=584&fit=crop&dpr=1 754w, https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=584&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/140407/original/image-20161005-14595-1gnlgcs.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=584&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">New Immigrants Improving Productivity in Australian Agriculture report.</span></span>
</figcaption>
</figure>
<p>However, working holidaymakers had <a href="https://www.fairwork.gov.au/ArticleDocuments/710/fair-work-ombudsman-annual-report-2013-14.pdf.aspx">more than three times</a> the rate of finalised Fair Work Ombudsman complaints compared to all other workers in 2013-14. This suggests a high incidence of exploitative work arrangements.</p>
<p>The research also noted numerous examples over time of exploitation of temporary migrants on temporary student, skilled work, working holiday or Pacific Seasonal worker visas. Examples of co-ethnic exploitation are also common.</p>
<p>The research does not clarify the extent to which temporary migrants working in agriculture experience exploitation. However, experiences of migrant worker exploitation do jeopardise future migrant flows into agricultural jobs. </p>
<p>International migration decisions are often based on the experiences of friends and family around the world. This means that unscrupulous employers can undermine the benefits of migrant employment programs for the majority of Australian employers who provide appropriate pay and work conditions.</p><img src="https://counter.theconversation.com/content/66422/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jock Collins held a three year Rural Industries Research and Development Council Research Grant (2012-15) PRJ-007578 "New Immigrants Improving Productivity in Australian Agriculture" with Associate Professor Branka Krivokapic-Skoko (CSU) to conduct this research. The Office of Multicultural Affairs and Citizenship, Department of Premiers and Cabinet, Victorian Government and the Working Holiday Supporting Centre were Industry Partners.
Jock Collins is currently lead Chief Investigator on two Australian Research Council grants.</span></em></p>Unscrupulous employers who exploit migrant labour are posing a large threat to the continued contribution that immigrant workers make to the agricultural industry, a new report reveals.Jock Collins, Professor of Social Economics, UTS Business School, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/661332016-09-29T00:31:35Z2016-09-29T00:31:35ZBackpacker tax compromise means more discrimination for these workers<p>The government has reached a <a href="https://theconversation.com/backpacker-tax-to-be-19-but-departure-tax-will-rise-5-in-compromise-package-66129">compromise with the Nationals</a> over the so called “backpacker tax”, a tax of 32.5% in every dollar earned by those holding a working holiday visa. This will now be reduced to 19% but in an effort to claw back revenue, the government is reducing the rights of this already vulnerable labour force.</p>
<p>The superannuation of these workers will now be taxed at 95% when they depart Australia. The <a href="http://sjm.ministers.treasury.gov.au/media-release/104-2016/?utm_source=wysija&utm_medium=email&utm_campaign=Media+Release+-+Better+working+holiday+maker+tax+arrangements">government claims the tax</a> “is consistent with the objective of superannuation, which is to support Australians in their retirement, not to provide additional funds for working holiday makers when they leave Australia”. So much for integrity and backpacker worker rights. </p>
<p>Now the effective tax rate is in fact 25.6%, although the cost of a working holiday visa will drop by $50 to $390. This means that the cost of the visa is still higher than it is for comparable destinations, and the competitive disadvantage in attracting backpackers to Australia remains.</p>
<p>The government claims the policy changes are designed to improve compliance and the integrity of the working holiday maker scheme. But it is apparent that these ambitions could well be overshadowed by the key priority of addressing labour supply challenges. </p>
<p>Not only are the changes to superannuation arrangements mean spirited, they will not make much of an impression on the government’s bottom line. They also single out backpackers for discriminatory treatment. Other workers engaged on temporary work visas are entitled to claim their superannuation benefit upon the expiry of their visa, subject to a portion being lost to taxation. </p>
<p>For example, Pacific Islanders employed under the Seasonal Worker Programme have the right to claim their employer superannuation contributions upon the completion of their contracts. They sacrifice just 15% of their employer contribution to the tax office. Those with a 457 visa and other workers’ superannuation <a href="https://www.unisuper.com.au/new-to-unisuper/solutions-for-every-life-stage/moving-countries#1">is taxed at 35% when they exit the country</a>. </p>
<p>Importantly, in a world where employment is increasingly framed by the global mobility of workers, the changes cut across the concerted efforts <a href="http://www.iss.nl/fileadmin/ASSETS/iss/Documents/Research_and_projects/IDRC-MGSJ/Taha-etal-portability_of_rights-2013_LitRev_bibly_220913.pdf">to protect workers’ employment rights</a> and standards. What the Australian government is doing is sanctioning the international portability of social security entitlements. </p>
<p>This attack on working holiday maker entitlements, while unlikely to be of substantial monetary significance has to be considered in the context of the frequency and persistence of reports of abusive and exploitative practices. These reports have prompted the Fair Work Ombudsman to establish <a href="https://www.fairwork.gov.au/how-we-will-help/helping-the-community/campaigns/national-campaigns/harvest-trail-campaign">the Harvest Trail Inquiry</a> to investigate employment practices and to seek remedies for workers. Yet there appears to have been little improvement. </p>
<p>The government has committed to providing some A$10 million in funding to assist in addressing these problems as part of this latest package of changes, proposing to establish an employer register in the Australian Taxation Office and to support the efforts of the Fair Work Ombudsman to address workplace exploitation. This is a positive development, but it remains to be seen how effective this support will be given the structure of backpacker employment relations. </p>
<p>Much of the employment is <a href="https://theconversation.com/australian-dream-a-nightmare-for-many-labour-hire-employees-37479">organised through labour hire arrangements</a> and placement agents, some based on phoenix companies, and backpacker hostels that broaden <a href="https://www.fairwork.gov.au/about-us/news-and-media-releases/2016-media-releases/september-2016/20160921-boonah-packing-eu-presser">the range of exploitative practices</a>. These include backpackers being charged to obtain work, excessive accommodation costs in substandard and overcrowded facilities, and being charged for transport between accommodation and work sites. </p>
<p>The Working Holiday Maker visa scheme was set up as a cultural exchange, allowing young international visitors the opportunity to work for up to six months or 12 months if they worked in regional and rural Australia.</p>
<p>However, it has become evident that the cultural dimension has become increasingly overshadowed <a href="http://www.tandfonline.com/doi/pdf/10.1080/1369183X.2013.876896">by the ever-growing reliance</a> employers are placing on backpackers to meet seasonal workforce needs, especially in agricultural, horticultural and tourism and hospitality industries.</p><img src="https://counter.theconversation.com/content/66133/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stuart Rosewarne receives funding from the Australian Research Council. </span></em></p>The government’s changes to the so called “backpacker tax” will mean these holidaying workers will have less super than other temporary workers in Australia, creating even more inequality.Stuart Rosewarne, Associate Professor, Department of Political Economy, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/624222016-07-13T03:04:09Z2016-07-13T03:04:09ZPolitics podcast: Darren Chester on the Nationals’ success<p>By increasing their numbers within the government, the Nationals were the surprise success story of the election, with a very locally focused campaign. The infrastructure and transport minister, Darren Chester, tells Michelle Grattan the presidential style of campaigning that is becoming more prevalent in Australia doesn’t suit the Nationals. </p>
<p>“We don’t necessarily benefit from that style of campaigning. That’s no criticism of our Coalition partners. It’s just that they tend to focus on the metropolitan seats where the leader of the day gets a lot of media coverage. Our media coverage and our profile comes through the local newspapers in small country towns, the local ABC or the local commercial television news service,” he says.</p><img src="https://counter.theconversation.com/content/62422/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>By increasing their numbers within the government, the Nationals were the surprise success story of the election, with a very locally focused campaign.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/595822016-05-20T01:25:44Z2016-05-20T01:25:44ZBackpacker tax: if it were never broke, why try to fix it?<p>The Federal Government has announced it will delay the start of the so-called backpacker tax by six months. The delay has been welcomed by the tourism sector and farmers, who rely on backpackers as a relatively cheap source of labour, especially in the crucial harvest season.</p>
<p>But change to the status quo is unnecessary. The furore appears to be based on a misunderstanding of Australia’s residency rules and how they currently apply to backpackers. Enforcement appears to have been the real problem, not the law itself.</p>
<p>In last year’s budget (2015-16), then-treasurer Joe Hockey proposed to “change” the tax residency rules to treat temporary working holiday makers as non-residents (foreign residents) for income tax purposes, regardless of how long they are here. The change meant the non-resident tax rate of 32.5% would apply immediately to any earnings, with no tax-free threshold.</p>
<p>Last year’s Budget Papers stated: </p>
<blockquote>
<p>“…a working holiday maker can be treated as a resident for tax purposes if they satisfy the tax residency rules, typically that they are in Australia for more than six months.”</p>
</blockquote>
<p>This seems to represent a misunderstanding of one of the residency rules. At best, this can be explained as summarising gone too far.</p>
<p>To be a resident of Australia, a person must satisfy one of the residency tests. In brief they are: (i) an ordinarily resides test (ii) a domicile test and (iii) a 183-day presence test.</p>
<p>The test referred to in the Budget Papers is the third test, the 183-day test; the other two tests have little hope of being met by backpackers. The 183-day test does indeed provide that a resident of Australia “includes a person who has actually been in Australia, continuously or intermittently, during more than one half of the year of income.”</p>
<p>However, this test also contains an exception, which reads: “unless the Commissioner is satisfied that the person’s usual place of abode is outside Australia and that the person does not intend to take up residence in Australia.” Mere presence for 183-days is not enough. </p>
<p>People who are temporarily in Australia on a working holiday have a usual abode outside Australia. And they clearly don’t intend to take up residence here.
Indeed, just two months before the 2015-16 budget, the Administrative Appeals Tribunal handed down three decisions dealing with the residence status of backpackers under the 183-day test. </p>
<p>The deputy president, Professor R.L Deutsch concluded, <a href="http://taxlawaus.blogspot.com.au/2015/06/clemens-vs-federal-commissioner-of.html">in all three cases</a>, the taxpayers were non-residents.</p>
<p>So why did the 2015-16 budget announce a measure to “change” the law to treat backpackers as non-residents when current law already does this? </p>
<p>The most likely explanation is that backpackers had been asserting they were residents in their tax returns to obtain the (effective) tax-free threshold of $20,500 applicable to residents ($18,200 threshold along with the $445 low income tax offset). They were probably advised to do so by backpacker agents, or registered tax agents operating in areas of high backpacker concentration.</p>
<p>One significant downside of our self-assessment system of taxation, where the ATO generally accepts tax returns at face value, is that incorrect taxpayer reporting can go undetected for many years. The tax return is lodged, processed and a tax refund is issued pretty much automatically (assuming some tax was withheld by the farmer on payment).</p>
<p>The backpackers are either out of the country when the refund is paid, or they leave pretty soon after. And, it simply isn’t worth it to the ATO to chase them down. They don’t even have to set up camp on an island somewhere and fake a heart attack to avoid extradition. Not for a tax debt of a couple of thousand dollars.</p>
<p>The above does not describe a problem with the substantive residence tax rules. Enforcement appears to be the problem. It may be that the 2015-16 budget measure was mainly a signalling to all concerned that the Government wants the tax law enforced.</p>
<p>Effectively, the farming and tourism sectors complaint is that the backpackers should continue to be incorrectly treated as residents for tax purposes, or that something similar to that tax treatment should apply to backpackers.
As a result of the announced delay, a full policy analysis can be undertaken which can take account of all stakeholder interests in the issue. </p>
<p>Our best bet out of this review is that backpackers will continue to be treated as non-residents and that a concessional rate of tax will apply to backpackers’ “harvest” earnings - and perhaps hospitality industry earnings - of somewhere between 0% and 32.5% (most likely 15%-19%).</p>
<p>Non-harvest earnings and perhaps non-hospitality industry earnings will continue to be taxed under the normal non-resident tax scales (that is, 32.5% from first dollar of income).</p><img src="https://counter.theconversation.com/content/59582/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Backpackers always were treated as non-residents for tax purposes, that’s why changes aren’t necessary.Stephen Lawrence, Sessional academic, UNSW SydneyDale Boccabella, Associate Professor of Taxation Law, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/595562016-05-17T12:54:40Z2016-05-17T12:54:40ZPolitically, Turnbull’s affluence can be used to feed different narratives<p>While the Coalition accusingly targets Labor for “class war” politics, Tuesday’s Essential poll reinforces the fact that Australians think there are classes and tag themselves and political parties to them.</p>
<p>The poll found 81% believe social classes still exist in Australia. Nearly one in two (48%) identified themselves as middle class and one third (34%) as working class. A tiny 2% were willing to describe themselves as upper class.</p>
<p>Asked whose interests the Labor Party mainly represents, 39% nominated the working class and 17% the middle class; 10% said the upper class. Only 8% said the ALP represents all classes; 13% said it represents none.</p>
<p>Just 15% said the Liberal Party mainly represents the middle class. A majority (53%) said it mainly represents upper-class people. Only 4% said the Liberals represent the working class; 12% said all classes and 4% said “none of them”. Some 28% of Liberal-National voters said the Liberals mainly represent the middle class and 29% said they represented all classes.</p>
<p>Since the question was asked in August 2014, the proportion thinking the Liberals represent the upper class has risen from 47% to 53%.</p>
<p>Independent polling analyst John Stirton, who was formerly Fairfax’s pollster, says that it seems “the 2014 Abbott/Hockey and the 2016 Turnbull/Morrison budgets might have reinforced some voters’ views of the Liberal Party as a party for the rich or an ‘upper class party’.</p>
<p>"This is a traditional perception among non-Liberal voters that seems to have become more widely held over the last couple of years, rising from 40% of all voters in 2013 to 53% now,” he said. </p>
<p>The question of class is much more complicated than simple self- description, as the 2015 “ANUpoll – Social class in Australia: Beyond the ‘working’ and ‘middle’ classes” <a>points out</a>.</p>
<p>But such basic figures indicate the sub-soil that Labor is seeking to tap into when it paints Malcolm Turnbull as a wealthy toff out of touch with the average person. They also highlight why Peta Credlin’s description of Turnbull last week as “Mr Harbourside Mansion” is seen as so potentially damaging.</p>
<p>There are two obviously contrasting ways of viewing Turnbull’s affluence in political terms and mobilising it into a narrative.</p>
<p>One is Labor’s approach: to suggest he’s someone who is removed from ordinary people’s lives and so can’t understand them. The alternative view, espoused by the Coalition, is that of Turnbull as the successful self-made man, which can feed into a wider story about aspiration.</p>
<p>But there is another, intermediate, view that says Turnbull mightn’t be “one of us” but is a viable leader. This is probably about where he is now, although over the months people have come to see him as less effective as a leader than they’d expected. The danger for him is that the further he slips on the effectiveness scale, the more risk that not being “one of us” comes into play.</p>
<p>Tuesday’s Essential poll has Labor ahead 51-49% (unchanged since the last poll) in two-party terms. For the first time more people disapprove than approve of the job Turnbull is doing (42-40%), a net rating of minus two which is down two since April.</p>
<p>The poll found 52% thought the campaign too long, a view perhaps vindicated by a slow Tuesday. The penalty rates debate, which is mainly being conducted on the left of politics, went into another day, with Shorten declaring of his Green critics, “I’ve never got stuck in a traffic jam behind a car load of Greens going to stand up for workers”.</p>
<p>Turnbull hammered Labor ever harder on border protection, doing an Abbott and getting on a patrol boat in Darwin.</p>
<p>The Coalition half cleaned off a barnacle by announcing a six month delay in the so-called “backpacker tax”, with its future to be reviewed post-election. Under the tax, that had been due to start July 1, those on working holidays were facing a rate of 32.5% from the first dollar earned. The tax has brought a backlash from rural areas, but the decision is inconclusive, providing no certainty about what a re-elected Coalition government would do.</p>
<p>The announcement was made by Assistant Treasurer Kelly O'Dwyer. It was one that presumably Treasurer Scott Morrison was happy to delegate, though to be fair he had flagged action in his news conference on budget day. O'Dwyer said Agriculture Minister Barnaby Joyce – who was not with her at the announcement – would lead the review.</p>
<p>Questioned later, Morrison said this was a very complicated issue, involving labour shortages in rural areas, visa integrity, and consistency of tax treatment. He said the results of the review would feed into the budget update at the end of the year.</p>
<p>The one exploding cracker of the day was the revelation that Labor frontbencher and member for Batman, David Feeney, had failed to declare on his register of interests a A$2.3 million house that is rented out and negatively geared. He and his wife brought the house in 2013 with the intention of renovating it and living there. </p>
<iframe src="https://www.podbean.com/media/player/2dj4i-5f571a?from=yiiadmin" data-link="https://www.podbean.com/media/player/2dj4i-5f571a?from=yiiadmin" height="100" width="100%" frameborder="0" scrolling="no" data-name="pb-iframe-player"></iframe><img src="https://counter.theconversation.com/content/59556/count.gif" alt="The Conversation" width="1" height="1" />
While the Coalition accusingly targets Labor for “class war” politics, Tuesday’s Essential poll reinforces the fact that Australians think there are classes and tag themselves and political parties to…Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.