Malcolm Turnbull criticized politicians lobbying for lower tax rates for backpackers. Nevertheless future backpackers narrowly dodged a bullet after he struck a tax deal for the young travelers.
Australian Prime Minister Malcolm Turnbull gave a series of radio interviews before a major parliamentary debate on the so-called backpacker tax on Thursday, repeatedly saying that his opponents wanted to give "rich kids" from Europe a better tax deal than Pacific Islanders or Australian nationals.
His comments preceded a debate, after which Australia's Senate passed legislation implementing a 15-percent income tax on young travelers working in temporary jobs such as fruit picking. Backpackers, who typically earn less per year than the minimum tax threshold in Australia, faced their tax rate defaulting to 32.5 percent if the conservative government had failed to strike a deal with the left-wing opposition Greens.
The Greens had been lobbying for a lower rate than the agreed 15 percent, but compromised when the government offered concessions on taxes on pension contributions and on environmental spending.
In the lead up to the deal, Turnbull told public broadcaster ABC his political opponents thought "rich white kids from Europe, who come here on their holidays [should] pay less tax than some of the Pacific Islanders from some of the poorest countries in the world."
"They say a backpacker from Europe, a rich kid on holidays here from Germany or Norway, backpacking around, he or she should pay less tax than Pacific Islanders who come here to pick fruit during the season and is sending that money back to his village - some of the poorest countries in the world," Turnbull told ABC. "Where is the equity in that?"
Turnbull said keeping the 15 percent rate was "a very important statement of principle," despite the Greens securing a compromise on the deal.
"We have a situation where farmers just simply didn't know whether they were going to be able to collect their fruit or whether it was going to be withering on the vine," Greens leader Richard Di Natale told reporters.
Legion of workers
Thousands of young tourists on working holiday visas find jobs as fruit pickers or laborers at Australian farms each year, subsiding their extended trips to the country. But farmers feared the legion of workers would skip Australia for countries such as New Zealand if a default tax rate of 32.5 percent came into force on January 1. New Zealand agriculture officials were more than willing to embrace this theory.
"If I was a backpacker, if I had to work - which I really don't want to do because I want to be sight-seeing - I would want to maximize my earnings from when I do have to work," chief executive of Horticulture New Zealand Mike Chapman told the ABC last week. "And anything that takes away from my earnings is a discouragement in my view for the backpackers to work, and the backpacker may say 'I won't work in Australia, perhaps I'll work in New Zealand'."
An Australian farmers' lobby group welcomed the compromise.
"Farmers can now plan next year's harvest with confidence that they will have a backpacker workforce there to help them harvest their fruit and harvest their crops," said Fiona Simson, president of the National Farmers' Federation, Australia's leading farming group.
aw/msh (dpa, AP, Reuters)