In the 2015-16 Budget, the then-Abbott Government announced one of the largest ever increases in income tax for a cohort of taxpayers – working holiday makers. By changing their tax status from ‘resident’ to ‘non-resident’, the Government increased income taxes by 32.5 per cent on a population between 150,000 and 200,000 at any one time. No consultation, and apparently, no consideration of what this tax might do was undertaken.
In the 16 months since, the Government has failed to address the fundamental concerns from employers and migrants. Now the Department of Agriculture is tasked with reviewing the ‘backpacker tax’. While the Working Holiday program is on the surface about cultural exchange, over the past decade, it has transformed into an informal, unregulated low-skilled work visa for young people from predominantly OECD countries. To be blunt, this is transforming one of Australia’s more open immigration programs into a complete mess.
As an aside, the fact not a single National Party MP was able to identify this issue in the lead up to the 2015-16 Budget and then fail to stop this measure, shows how weak their political sway is when it comes to policies which actually matter in regional Australia.
Here is my submission to the Review – WHM Review – Ag Submission. It is a bit rusty given my lack of blogging combined with a very tight timeframe for submissions. I doubt there will be any positive outcomes from this process and instead, a small band-aid will patch over the serious policy issues of regional labour shortages. The summary of my submission is below the fold.
(Note: This is my first blog post in a while. From February 2016 until yesterday, I worked for a Shadow Labor Minister. It was a wonderful experience however a silver lining of finishing up is the opportunity to write publicly again.)
The Working Holiday Maker (WHM) program is a valuable part of Australia’s broader migration framework. The bilateral nature of the program facilitates immigration of people to Australia and the emigration of Australians overseas.
This is a unique, important contribution in migration policy. However, like many parts of migration policy in Australia, the WHM program is often viewed in isolation from other migration programs and policies. The program has traditionally been promoted as a way for Australia to engage in cultural exchange and deepen people to people links across the world.
Yet since the introduction of a second 12-month visa in 2005 as an incentive to address regional labour shortages, the Working Holiday Maker program has become an unregulated mess, fostering exploitation while also undercutting the migration program specifically designed to address regional labour shortages, the Seasonal Worker Program.
The program today is clearly used predominantly as an informal low-skilled labour migration scheme with very little regulatory oversight. The most important questions this review must address are: what is the purpose of the WHM program and does this align with the broader migration framework?
In answering these questions, despite the current heavy reliance of the horticultural industry on working holiday makers, the only sustainable way to address structural labour shortages is under the Seasonal Worker Program.