Interview with Brian Carlton on Tasmania Talks - backpacker tax, University of Tasmania, HMAS Tobruk

17 March, 2016

Interview with Brian Carlton on Tasmania Talks

Topics: backpacker tax, University of Tasmania, HMAS Tobruk

CARLTON: A week ago we spoke with Phil Pyke from the Fruit Growers Association and he's not too happy about the proposed changes to the way backpackers who are often used as itinerant workers.

The changes were due to come in July 1 and would see backpackers paying 32.5 cents in every dollar earned. In other words, there is no tax free threshold.

Now it appears there's been some re-think at Treasury level because the Treasurer Scott Morison has had a chat with the Tourism Minister, Richard Colbeck, Senator Richard Colbeck from Tasmania. And it was announced yesterday that he'd been asked to find an alternative to the tax hike.

Now clearly this is not just an agricultural issue, this is also a tourism issue because if you've got backpackers coming down who want to do a bit of work they're going to be slugged massively - 200,000 of them a year.

They might just choose to go somewhere else where they can both have a holiday and work at the same time and not pay vast amounts of tax. Senator Colbeck's on the phone from Canberra and I appreciate you taking some time out of what is no doubt going to be a very busy day for you Senator.

COLBECK: Good morning, Brian. A busy day and I think quite an interesting one if I can use that term.

CARLTON: Yes indeed in the sense it will probably go way into the wee small ones, wont it?

COLBECK: Today could end up being tomorrow.

CARLTON: Yeah, right.

COLBECK: Or tomorrow could end up being today, depending on how you look at it in Parliamentary terms.

CARLTON: Indeed. I won't pre-empt any of that. We'll wait and see how it all plays out. So the Treasurer personally asked you or is it Treasury that came to you and said hey we need to have a think about this?

COLBECK: Actually I went to the Treasurer and had a bit of a chat with some thoughts that I had around how we might look at it differently. Obviously the issue you've just indicated, a lot of people in the tourism industry employ backpackers as part of their seasonal workers.

CARLTON: Yeah, of course.

COLBECK: I've had a number of representations from around the country including Adam Giles in the Northern Territory and a lot of people through the tourism industry nationally have come to me expressing concern about it.

And obviously having spent a lot of time in and around the agricultural sector over my time in the Parliament, I wasn't deaf to the calls from the Tasmanian industry either and as a Tasmanian Senator I understood the demand and the need.

But I know a lot of players in the ag sector as well, so I'd had a bit of a look at it and listened to some of the suggestions around how we might do it differently and combined that with some thoughts that we'd put together here in my office.

We went to the Treasurer and said look, can we have a look at this, here's some new thoughts, we will do this on a revenue neutral basis because we understand it's tight economically and you want to maintain the revenue that comes from the measure. But can we do it in a different way that preserves the revenue but provides a better outcome in the context of the backpackers and also the industry.

CARLTON: Good luck there. What were you looking at annually in terms of revenue, extra revenue?

COLBECK: Well the measure as it was implemented was worth about $540 million which is quite a significant amount of money.

CARLTON: Hell yeah.

COLBECK: So there won't be a zero tax solution to this problem or to this issue. That to be fair is not what industry is asking for.

CARLTON: No, they're asking for 19.5 per cent plus benefits, so in other words leave the tax free threshold there, as I understand it.

COLBECK: Look I'm not sure how that's going to work. We also did have a situation where we had different taxation treatment for different visa classes and that's not desirable either. So that's one of the things that we need to look at as part of this overall process so we have fair treatment across various visa classes.

CARLTON: Somebody's going to have to pay $540 million though, Senator. Who's that going to be?

COLBECK: We've had a look at a few issues that we can look at. So visa class alignment and there has been some conversation around superannuation treatment that's been suggested by some of my colleagues.

I think if we start to pull some of those things together we can come up with a solution that is better than where we sit at the moment. And we're also looking at what our competitor nations do and none of them have a zero tax solution.

So these people come to the country, they're here for a holiday yes but they also use services while they're here working and so we think it's reasonable that they make a contribution to that which they do in other countries like New Zealand, Canada, other nations that have a similar visa regime.

So we're looking at those things to see where we fit competitively into that space. So we'd like to come up with a solution that makes Australia competitive in attracting backpackers because we want to maintain our very good tourism numbers at the moment but we also want to have available that important resource for the tourism industry and for agriculture.

CARLTON: Correct me if I'm wrong but this was revealed in the previous budget wasn't it? So last May?

COLBECK: Yes it was a measure that came down in the budget last year to take effect on the 1st of July this year. So that means that there's a bit of pressure on to get the process done as quickly as possible. I have to present the solution to the Treasurer who then has to take that back to Cabinet.

CARLTON: And you don't have a huge amount of time to do that if it's to be included in the current budget which may or not be on the 3rd of May or the 10th of May, were not sure yet.

Okay, can we stay across this because obviously the formula that you end up working out to be revenue neutral, so you need to get $540 million in revenue without massively impacting either of these sectors. So I'll be very interested to see how you manage to come up with that. I'll leave that one aside just for the moment.

Senator, you've been tasked in many respects to lobby the government really hard over the UTAS move, the University of Tasmania from current Newnham to Inveresk in Launceston and also the Burnie campus. Tell me, how's that progressing? Are we likely to get at least possibly not in the budget, but in the lead up to the election, are we likely to get the $150 million out of the federal government, your government, that we need to progress this? It's a really, really important project.

COLBECK: Well look, it is an important project for the university. I think it's an important project for Tassie. And I know you'd like me to give you a scoop on your show this morning.

CARLTON: I'd very much like that, Senator. To be honest, yes.

COLBECK: I'm not going to do that because I can't. But I do have the opportunity to present this to the Joint Commonwealth and Tasmanian Economic Council on which I sit. The purpose of that Council is to look at the strategic advantages of the state and things that are going to help to lift the Tasmanian economy and help make it more self-sustaining and education is a key element in that.

As I said in my release last week, I've been interested in education for quite a period of time. I'm very fortunate to have some responsibilities in my current portfolio around international education but the proposal that's been put forward has the opportunity I think to change the way people in the North and North-West of Tassie see education, provide pathways through into tertiary education which will increase their skills and also earning capacity and so it's really important.

The opportunity to also do some additional work with the Australian Maritime College is also very attractive to me. But it's not just about the money in the circumstance - there is also some regulatory reform that needs to occur because the sub-degree courses are actually capped at this point in time and so there needs to be a number of things that occur for the proposal to actually work.

CARLTON: I would argue, Senator, yeah look I agree with you, Senator, but I would argue as well that the industry and business need to be brought into the process too in order to work out how best to facilitate those sort of under degrees.

So I'm just thinking outside the square here, if you can somehow rejig the backpacker thing to not raise $540 million but raise $690 million there's your $150 million.

COLBECK: Look that's pretty creative thinking, Brian. But I'm not sure that the ag and tourism sectors are necessarily going to go for that - but creative thinking.

Look, we need to engage the community on this education opportunity that's been presented by the university. I think the community needs to aim really high as does the university. There is I think significant opportunity in this.

The opportunity to work for example with Defence to provide some quite unique skills based on the equipment and skill sets that exist at the AMC, so the creation of say an R&D and Innovation hub that builds on Tassie's' strengths and can be a key part of our national defence operation I think is a real opportunity.

We might not build the subs for example but we can be the brains behind it and I think that's something that we should aspire to be because there is an enormous opportunity and potential industry and business spin-off that could come as a part of the freeing up of the existing campus.

So I think it's a huge opportunity that should be grabbed by the northern community and the north western community, to change the way that people will look at and think about education and the opportunities that it brings. So it can be quite transformative if it's done well.

CARLTON: Not to mention revitalising both Launceston and Burnie CBDs I would argue. Let's leave that aside for the moment, but any idea when we might be likely to hear whether the federal government is prepared to stomp out the $150 million which is half the total funding?

COLBECK: Yeah look it's a lot of money and various representative groups in Tasmania have been very kind to me over the last week and a half or so, coming with requests for large chunks of money and so we'll consider this through the economic council and that provides an opportunity for the Tasmanian Government, the Prime Minister and the Treasurer, myself and a number of others to sit around and strategically look at things that are really going to benefit the state.

I think you probably understand my perspective on that after the conversation and that will be a process by which we can consider a number of things which are sitting on the table and a number of things that I know you've been talking to your listeners about over recent weeks which are very, very topical.

CARLTON: Yeah, lobby hard Senator if you could on our behalf. I think this is absolutely critical for the ongoing future not just in the immediate sort of 5 or 10 years but you know, heading decades into the future.

Just one real quick one. I just had a call not too long ago, about an hour ago from a very cocky bloke at Hervey Bay who reckons that he's going to win the HMAS Tobruk argument, Senator. Could you have a quiet word to Marise Payne your colleague the Defence Minister while you're chatting about other military matters here, and just see whether we can steal her towards getting Tobruk down here? Because the guy in Queensland's got $2 million on the table from local government, apparently.

COLBECK: Well I was actually talking to Eric Hutchinson last night about this and Eric was in Marise's ear yesterday. I'm happy to have a chat to Marise about it and have had previously.

So can I tell you, the guy in Hervey Bay has got a very, very serious competitor in Eric Hutchinson who is looking to pull out all stops to get the vessel down here.

CARLTON: I'm not sure Eric's got $2 million though Senator, to be fair. Look I must fly. I really appreciate your time today so thank you. Can we stay across this as we move through the process, particularly the UTAS one?

COLBECK: Very happy to, Brian.

CARLTON: Thanks very much.


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