News National Greens help government seal backpacker tax deal

Greens help government seal backpacker tax deal

PM's reaction to GDP figures
Prime Minister Malcolm Turnbull said the figures were a "wake-up call to the Labor party to get on board with the government's pro-growth, pro-business investment policies". Photo: AAP
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Despite being the target of government ridicule throughout the whole parliamentary year, it was the Greens who came through on the very last sitting day to help Malcolm Turnbull save face over the controversial backpacker tax.

The Prime Minister was exuberant at having secured agreement to pass a 15 per cent tax rate for backpackers – down from the original 32.5 per cent announced in the 2015 budget, but up from the 13 per cent Labor had settled on.

Greens leader Senator Richard Di Natale has condemned the prime minister for capitulating to "homophobic" and "bigoted" members in his party over a same-sex anti-bullying program.
The government struck a deal with the Greens’ leader Richard Di Natale. Photo: AAP

With just hours to go before Parliament rose for the year on Thursday, and following hours of heated debate over the rate, the Greens provided the government enough numbers to get its amended legislation through the Senate.

The upper house approved the motion 43 votes to 19, bringing 18 months of uncertainty to an end.

“This is an example of the government delivering,” Mr Turnbull said.

“We are getting on with our job of delivering the promises we made to the Australian people.

“What this has done is provide assurance for farmers and many industries across rural Australia.”

A deal with the Greens

The victory came at a cost though, which could result in a bigger bite out of the budget than the government insisted it was avoiding by rejecting Labor’s lower rate.

In order to get the nod from the Greens on the 15 per cent rate, the government had to agree to lower the backpacker superannuation tax rate from 95 per cent to 65 per cent, plus give an extra $100 million to the Landcare environmental program.

This adds up to an almost $160 million impost on the budget, whereas lowering the tax rate to 13 per cent would have cost the budget about $60 million.

Opposition Leader Bill Shorten described the deal as a “colossal mess” of the PM’s own making, saying it added up to a bigger tax at a bigger cost.

“This is complete and utter chaos,” he said.

“Malcolm Turnbull is spending $100 million more so he can have a higher rate of backpacker tax. You can’t make this up.

bill shorten
Bill Shorten has described the situation as “utter chaos”. Photo: AAP

“It goes to show Malcolm Turnbull will pay any price to anyone. If this is victory, I’d hate to see what defeat looks like.”

Greens leader Richard Di Natale said his party was sick of the major parties arguing over the rate, while farmers had fruit withering on the vine.

“Our sensible circuit-breaker has delivered farmers the certainty they’ve been calling for,” he said.

“The Greens were not willing to stand by and risk the tax rate for backpackers jumping to 32 per cent. That would have been a disaster not just for farmers, but for entire rural communities and the tourism industry as a whole.”

Welcomed by farmers

Senator Di Natale said the new package would be equivalent to the 13 per cent rate wanted by Labor because of the lowered super payments rate.

“The reduction in the super, combined with the 15 per cent tax rate, is effectively in the order of $60 million which is what the government would have got with a 13 per cent rate,” he said.

Backpackers will now be taxed at 15 per cent. Photo: AAP
Backpackers will now be taxed at 15 per cent. Photo: AAP

The National Farmers’ Federation welcomed the deal being struck.

Fear had struck farmers across the country when the government first said it would introduce a 32.5 per cent tax on backpackers’ wages in a bid to raise $760 million over four years.

Farmers insisted the rate was too high and would result in far fewer backpackers being given work.

Earlier in the day, Derryn Hinch joined with other Senate crossbenchers Jacqui Lambie and Rod Culleton to settle on Labor’s preferred rate of 13 per cent (up from 10.5 per cent), resulting in a stalemate for the government.

But when the Greens joined with the Nick Xenophon Team and the rest of One Nation to side with the Coalition, the Prime Minister was able to end his parliamentary year on a high.

Deputy Prime Minister Barnaby Joyce said besides it being a win for farmers, it was also a “victory for the Parliament”.

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