Second Reading SpeechMr MORRISON (Cook-Treasurer)
That this bill be now read a second time.
The Treasury Laws Amendment (Working Holiday Maker Reform) Bill 2016 forms part of a package of bills to implement the government's working holiday-maker reform package.
The government is aware of concerns about exploitation of working holiday-makers. To help address these concerns, this bill establishes a compliance regime to ensure employers are doing the right thing by working holiday-makers while they are here.
The bill will also provide valuable data to the government for the first time on the number of employers and the distribution of working holiday-maker labour across the country. This will assist in reducing abuse of working holiday-maker labour, assisting in compliance and enforcement activities, and helping the government make policy decisions relevant to working holiday-makers.
We will be requiring all employers of 417 and 462 visa holders to register with the Australian Taxation Office. This will entitle employers to withhold at the new working holiday-maker tax rate of 19 per cent, from the first dollar of income up to $37,000, rather than 32.5 per cent. This creates an incentive for employers to register to attract working holiday-makers.
Employers who are not registered will be required to withhold tax at the 32.5 per cent rate from the first dollar of income and may be subject to Australian Taxation Office penalties. Working holiday-makers whose employers withhold at 32.5 per cent will have access to the 19 per cent rate on lodgement of their tax return.
The registration process will be simple, with employers agreeing to a few conditions by phone, email or online, and will provide valuable data on the employment of working holiday-makers.
The register will be made public, with a list of registered employers published on the ABN Lookup, making it easy for working holiday-makers and others to check the registration status of a potential employer.
The Australian Taxation Office could apply a range of penalties to employers for breaches of the tax laws, including failing to register.
The government is also committing an additional $10 million to support the compliance operations of the Fair Work Ombudsman and the Australian Taxation Office to ensure employers are doing the right things by working holiday-makers when they are working in Australia.
This bill will reduce the application charge for subclass 417 and 462 working holiday-maker visas by $50 from $440 to $390 from 1 July 2017. Reducing this charge by $50 will return the real cost of the charge to about the level it was at in 2013-14.
Together with the lowering of the tax rate applying to working holiday-makers, these changes will lower the cost of coming to Australia for working holiday-makers and leave them with more money in their pockets to spend while they are here.
Full details of the working holiday-maker reform package are contained in the explanatory memorandum.