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By David Leyonhjelm - posted Monday, 14 November 2016

Against all public expectations, the Coalition is about to do the bidding of the unions. 

The Coalition casts itself as a tough cop against union thuggery when it waves around its bill to reinstate the ABCC.  But the ABCC bill largely re‑states existing law relating to an industry that makes up just eight per cent of the economy.  The Coalition has done nothing to overturn the Rudd/Gillard re‑regulation of economy‑wide industrial relations. And now it is putting forward its backpacker tax bill riddled with hidden pro‑union provisions.

It’s widely known that the backpacker tax bill removes the tax free threshold for backpackers and increases the tax on their superannuation to a whopping 95 per cent, and that a linked bill increases the passenger movement charge, giving us one of the highest, most anti-tourist departure taxes in the world.


But not many know about the bill’s hidden pro-union provisions. 

The bill deliberately sets out to make the hiring of backpackers markedly harder than the hiring of locals.  If a farmer wants to hire a backpacker, he or she will have to demonstrate a genuine business requirement to hire backpackers.  They will have to promise to examine the visas of backpackers and come to a view that the visa allows the work to be done.  They, and any associates, will also have to pass a vague ‘fit and proper’ test. 

If the farmer fails to navigate this bureaucracy, he faces a fine of up to $10,800.  Unsurprisingly, the Government admits this “may disincentivise the employment of working holiday makers”.

What’s worse is the bill sets the unions on any farmer brave enough to hire backpackers.  The bill means the Government will publicly disclose the names and locations of any farmer who has successfully navigated the bureaucracy and intends to hire backpackers.  These details will appear on the Australian Business Register. 

The Government say this will make it “easy for working holiday makers and others to check the registration status of a potential employer”.  Given that backpackers aren’t known to regularly peruse the Australian Business Register, this ‘outing’ of farmers who plan to hire backpackers will mainly help the Australian Workers Union wage a campaign of harassment and intimidation.

Some farmers support these pro‑union provisions.  Rather than continue to resist union harassment and intimidation, they now just want to make sure their competitors face union harassment too. In effect, the farmers who support these provisions are happy to see fruit go to rot as long as everyone is in the same boat.


Why the Liberal and National parties are instigating such pro‑union provisions is anyone’s guess. Perhaps they think the farmers who support them are representative.  Perhaps they have fallen for the Labor claim that when backpackers work hard at agreed rates, they are being exploited instead of offering a shining example for others. Or perhaps the Liberal and National parties are asleep at the wheel and letting the red‑tape loving bureaucrats draft up laws without oversight.

But perhaps the strangest aspect of all is that the most pro-union provision in the backpacker tax bill does not have much to do with backpackers at all.  For the first time in Australia’s history, it will authorise the Tax Office to divulge the private financial details of employers to the Fair Work Ombudsman so she can enforce government decrees on wages — including minimum wages, award wages and penalty rates. 

It is well known that government wage-setting is ignored by a number of employers and employees.  This is a good thing, because it gets more people into jobs and benefits the economy. This move will ensure government wage-setting is enforced with an iron fist, with terrible consequences for employment.

That the Tax Office coercively extracts the financial information of taxpayers is a concern, but at least it has always kept this information secret. Divulging the information to the various tentacles of government is a huge breach of trust that will substantially undermine taxpayer cooperation with the Tax Office.

The Liberal and National parties are betraying their base and doing the bidding of the unions with the backpacker tax bill, all the while pretending to be the tough cop on the beat.

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This article was first published in the Australian Financial Review.

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About the Author

David Leyonhjelm is a former Senator for the Liberal Democrats.

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