Crossbench senators Derryn Hinch and Rod Culleton have thrown a spanner in the works over the government’s backpacker tax, voting to reinstate the 10.5 per cent rate.
The Coalition reached a deal with crossbenchers for a 15 per cent rate, coming down from its initially budgeted 32.5 per cent rate and a further compromise of 19 per cent.
But Senators Hinch and Culleton voted on Wednesday with Labor, the Greens and crossbenchers Jacqui Lambie and David Leyonhjelm to reject the 15 per cent rate.
Senator Hinch, and Senator Culleton, who is a member of the One Nation party room, previously voted for the 19 per cent rate.
“The Labor and the Greens will wear this like a crown of thorns,” Finance Minister Mathias Cormann told parliament.
“The people who just got stuffed were the farmers of Australia”.
Senator Cormann said the Government would reject the amendment when it was returned to the lower house.
“The chamber has chosen to vote for a 32.5 per cent tax rate,” he said, referring to the default position if the bill is not passed.
The Government had three of the four One Nation senators on side and gained the support of the Nick Xenophon Team after agreeing to a trial allowing jobseekers to earn up to $5000 on seasonal fruit-picking work without penalty.
Senator Culleton said all four One Nation senators were “individual senators”.
Asked about its impact on farmers, he said: “This is a good move for them.”
Shadow treasurer Chris Bowen said Labor had sought to fix what had become a “rolling farce” over the tax rate.
“I have a message for the treasurer … you have the responsibility to work with the Parliament to find solutions,” he said.
“The solution is right there before the government. If they could put aside their arrogance and incompetence for a moment and accept the solution of 10.5 per cent, then Australia’s farmers, horticulturalists, growers and the tourism sector could get the certainty they need.”
Senator Hinch told Sky News it was now up to the government to accept the 10.5 per cent rate.
“Why don’t the Nationals cross the floor for the farmers?” he said.
The 10.5 per cent rate would ensure Australia’s tax rate was competitive with New Zealand.
The government could have its backpacker tax in place on Wednesday afternoon “and we could get on with other stuff,” Senator Hinch said.
“Right now I’m sticking to my guns.”
Senator Culleton said Senator Hanson knew his position in support of a 10.5 per cent rate.
“We are not about just letting things go through, we want to do it and do it right,” he told Sky News.
“Everyone is on the table” on legislation considered by the One Nation party room until it comes to a vote in the parliament.
The ball was now in the government’s court, Senator Culleton said.
“If they say it is going to be set to 32.5 per cent they have to live with that.”