Backpacker tax compromise in doubt

Backpacker tax compromise in doubt


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​AN anticipated end to the backpacker tax saga has been unsettled in the federal parliament with the Senate voting for a 10.5 per cent tax rate today.

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Senator Derryn Hinch backflipped on his backpacker stance of 15pc from earlier this week.

Senator Derryn Hinch backflipped on his backpacker stance of 15pc from earlier this week.

AN anticipated end to the backpacker tax saga has been unsettled in the federal parliament with the Senate voting for a 10.5 per cent tax rate today.

Earlier this week, federal Treasurer Scott Morrison announced support for a compromised 15pc rate that was expected to pass this week during the final sitting week of 2016.

However, fears are now held that the tax will revert to 32.5pc on January 1, if the parliament is unable to resolve the matter this week.

The Senate’s unexpected backflip came after key crossbench Senators voted for an amendment moved by Labor and supported by the Greens to revert to the 10.5pc rate.

Key crossbench Senators also changed their positions causing unexpected distress to the farm sector and the government.

Victorian Senator Derryn Hinch did an unexpected backflip after earlier indicating this week that he backed the 15pc compromise rate announced by the Treasurer.

WA One Nation Senator Rod Culleton also parted ranks with his party saying he supported the 10.5pc rate as it was a better offer for farmers.

Despite criticism from Shadow Agriculture Minister Joel Fitzgibbon for being unrepresentative of farmers with their position on the backpacker tax issue, the National Farmers Federation stood its ground on a 15pc rate.

NFF CEO Tony Mahar said his group believed that rate was fair, internationally competitive and recognised the unique nature of seasonal work.

“We don’t believe that backpackers should pay less tax than those on the Seasonal Worker Program,” he said.

“Our members will not be bullied on this issue and today’s antics in the Senate show contempt for farmers and growers in desperate need of a resolution.

“Enough is enough.

“We need this issue put to bed, once and for all.”

It’s understood the legislation will now return to the Lower House where it will be restored to 15pc and will then need to be returned to the Senate again.

Senator Culleton told Sky News if the Coalition wanted the rate set at 32.5pc “they have to live with that”.

Independent Tasmanian Senator Jackie Lambie and NSW Liberal Democrat Senator David Leyonhjelm also consistently backed the 10.5pc rate.

Senator Leyonhjelm said the intention of the tax was to raise government revenue and the story the government was promoting, that without this bill all backpackers would pay 32.5pc from the first dollar was “complete and utter bullshit”.

He said only non-residents would pay 32.5pc and most backpackers qualified as residents for non-tax purposes.

“It’s not that hard for a backpacker to become a resident for tax purposes,” he said.

Tasmanian Independent MP Andrew Wilkie said the Australian community and farmers in particular were sick of politicians arguing like ill-behaved children over the backpacker tax.

“No wonder politicians are held in contempt when they are so quick to resort to petulant, self-serving behaviour completely devoid of any respect for the public interest,” he said.

“Yesterday most Senate crossbenchers were ready to support 15oc - but today some have gone and changed their mind, even though farmers desperately need certainty and the Tassie producers most relevant to this matter were happy enough with 15pc.

“While I would prefer to see no backpacker tax at all, it’s clear that the time for political point-scoring is long past and either the government must today agree to the lower rate of 10.5pc or the Senate must honour their position yesterday.”

Victorian Farmers Federation Horticulture Vice President Emma Germano said the Senate had made a mockery of political process with their refusal to resolve the backpacker tax.

“This has been a disastrous result for the agriculture industry and I hope the Senate is comfortable in the knowledge that they could have destroyed this season’s harvest for many hardworking farmers,” she said.

Ms Germano said the bitter stalemate was putting the agriculture sector under increasing stress as many farmers struggled to find reliable temporary labour.

“There is no question that this ugly fight has caused tremendous damage to our reputation,” she said.

“We have already seen a drop-off in backpacker numbers, and with much of the harvest already in full swing, many farmers are struggling to find the labour.”

VFF said more than 40,000 visa holders worked in the agriculture industry each year and bring in around $3.5 billion to the Australian economy.

Ms Germano said parliament needed to come through for farmers and end the stalemate.

“In the lead-up to Christmas, this is a present I think all farmers would be happy to receive,” she said.

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