האגודה הישראלית לחקר יחסי עבודה

מחקר, הוראה ומדיניות בתחום יחסי העבודה

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  • שרגא ברוש, יו"ר לשכת התאום לארגונים הכלכליים
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חיפוש מחקרים

Bill Shorten claimed backpackers are on a 'de facto strike' from Australia. Is he right?

It was early in the election campaign, with Malcolm Turnbull cruising through the country's north, when the government opted to delay its so-called "backpacker tax".

The controversial measure, introduced in the 2015

Joe Hockey budget, would remove the tax-free threshold for people on working holiday visas. That means they would be taxed from the first dollar they earn in Australia, while the first $18,200 is tax-free for everyone else.

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A 'de facto strike of backpackers'

Labor wants to hear the voices of the tourism industry & farmers in the backpacker tax debate says Opposition Leader Bill Shorten. Vision ABC News 24.

It's a divisive plan. Many Coalition MPs – and lots of farmers – are concerned it would discourage working holidaymakers from coming to Australia, hurting the tourism sector and reducing labour available for farms.

Little surprise then that the Turnbull government pushed back the start date to January and consigned the tax to a review.

Backpackers Danny Keenan, 25, and Jonny Jamieson, 24, are among a dwindling number of Irish working holidaymakers.
Backpackers Danny Keenan, 25, and Jonny Jamieson, 24, are among a dwindling number of Irish working holidaymakers. Photo: Jason South

But Labor leader Bill Shorten senses a political opportunity. "We've got grave concerns about the way the backpacker tax was introduced," he said when asked about the issue on Tuesday.

"They didn't consult, they've caused untold harm. We're seeing a report of almost a de facto strike of backpackers coming to Australia."

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This claim piqued Fairfax Media's interest, so to speak. It's a claim Mr Shorten made before, during the campaign, when he said the Abbott-Turnbull government had "effectively led to an almost de facto strike by backpackers".

But is it true?

Opposition Leader Bill Shorten
Opposition Leader Bill Shorten Photo: Alex Ellinghausen

We asked Mr Shorten's advisers for the source of his claim. One said it was based on "anecdotal evidence", but another came through with official data from the Department of Immigration and Border Protection.

The latest stats go up to December 2015 and show the number of applications lodged for working holiday visas peaked in 2012-13, at 264,974.

Farmers are among those worried about a lack of labour resulting from the declining number of working holidaymakers.
Farmers are among those worried about a lack of labour resulting from the declining number of working holidaymakers.

That fell to 242,050 in 2013-14 and then further to 231,390 in 2014-15. The figures from July to December of 2015 show the number of applicants is still declining, as is the number of visas granted.

So, Bill Shorten is right – to a point. Fewer people want to come to Australia on working holiday programs, and this has been well-documented. But can that fairly be called a "de facto strike" over the backpacker tax?

Well, no. The most obvious reason is that the backpacker tax isn't due to start until January 1. It's hard to strike over something that doesn't yet exist.

One argument, made by Mr Shorten's office, is that the backpacker tax has been on the books since the May budget of 2015, and could have scared away potential visitors since then. After all, preparing for a 12 or 24-month working holiday entails a great deal of planning.

It's hard to conclusively establish cause and effect here. But those same documents demonstrate this decline was happening long before May 2015 - indeed, since about September 2013.

You might recall that was the month the Abbott government was elected. But that, too, is a red herring.

The most likely explanation is always the simplest: price. In 2013, the Labor government increased the cost of a working holiday visa from $280 to $365. It went up again to $420 in 2014.

Gary O'Riordan, a former manager of the Australian Federation of Travel Agents, authored a report in April 2016 probing this very issue.

"There is no other explanation for the steady decline in visas issued since 2013 other than the increasingly high visa fee," Mr O'Riordan wrote.

Last year the price rose again to $440 – compared to $CA250 ($250) in Canada or €175 ($258) for Europeans in New Zealand.

Mr O'Riordan was very clear in his recommendations: cancel the backpacker tax, slash the taxation rate for working holidaymakers and cut the application fees to more competitive levels.

Conclusion

It's true that working holidaymakers are abandoning Australia, by almost 13 per cent in just two years. When Mr Shorten says there's "a de facto strike", he has a point.

But it's more likely due to successive visa price hikes, rather than the "backpacker tax" which is yet to take effect, and has only been talked about since May 2015.

It's one of those things politicians often do – make a technically accurate statement in a misleading context for political point-scoring.

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