13pc backpacker tax on offer

The issue flared up yesterday when Senator Hinch backed an amendment by the ALP – supported by the Greens and other crossbenchers - for a 10.5pc rate, after earlier in the week declaring he backed the government’s compromise of 15pc.

One Nation WA Senator Rod Culleton also backed the 10.5pc rate but has also now indicated support for a 13pc compromise, on the government’s 15pc compromise that the National Farmers’ Federation have supported.

Treasurer Scott Morrison has said the government would remain steadfast on the 15pc and not return the legislation to the Senate until a firm commitment was reached to pass the legislation.

If the legislation is not passed this week, the tax rate will revert to 32.5pc on January 1.

The increase was agreed to in last year’s federal budget and was due to commence on July 1 this year but was deferred six months at a cost of $40 million to the budget pending a cross-department review.

NSW Liberal Democrat Senator David Leyonhjelm backed the 10.5pc rate in the vote that amended the legislation in the Senate yesterday but has now moved to 15pc leaving the government needing just one more vote from the crossbench.

Senator Leyonhjelm said he’d forced significant amendments to uphold taxpayer privacy in exchange for his vote on a backpackers tax of up to 15pc.

He said he met with Treasurer Scott Morrison this morning to hammer out the details of the agreement so it can be put in writing.

Senator Leyonhjelm said Mr Morrison had agreed to drop a stipulation all farmers employing backpackers would be named publicly on a business register.

“I have always been concerned about this because it had the potential to make farmers the targets of unions,” he said.

“The privacy of Australian businesses and taxpayers has been eroded in recent years by big government, and I consider the concessions to be significant.

“In the absence of a deal in the Senate, the ATO is set to cause mayhem by attempting to impose a higher tax rate on backpackers.

“I believe the time has come to put this issue to bed and provide some certainty for farmers and visitors to Australia.”

The National Farmers Federation President Fiona Simson said her group wanted the issue resolved today and was continuing talks with all sides of politics.

But she said “at this point it looks like we’re a way off a resolution”.

“The government is sticking at 15pc and Labor at 10.5pc,” she said.

“As we’re walking around and talking to people we’re encouraging them to reach a resolution today and avoid the 32.5pc rate.

“The Labor party has not moved at all on its rate but the Coalition has come down significantly from the 32.5pc rate.

“If the ALP was to move to 15pc we’d have an outcome and a solution and we’d have certainty for farmers and backpackers and regional communities alike.

“There are some mixed messages around.”

Ms Simson said she’d spoken to Senator Hinch’s office and he had assured the NFF his position was 13pc.

She said he or Senator Culleton were unable to meet with the NFF.

“Labor has assured us their position is 10.5pc and the government has assured us their rate is 15pc but we want an outcome,” she said.

PM Malcolm Turnbull said the Coalition’s position on the backpacker tax was already a compromise.

He said the question for opposition leader Bill Shorten should be; how does he justify backpackers from some of the richest countries in the world, paying less tax than Australians?

“He wants them to pay 10.5 per cent tax, less tax than Australians and even less tax than Pacific Islanders who come here to work during the season picking fruit, so that they can send money back to their villages in some of the poorest countries in the world,” he said.

“They’re paying tax at 15 per cent.

“How does the Labor Party claim to be the defender of Australian workers, if it wants foreigners - rich kids from some of the richest countries in the world in many cases - to pay less tax than Australians?

“And how can it claim to be a defender of equity and fairness, if it wants these people from some of the richest countries in the world, to pay less tax than Pacific Islanders?

“People who are sending $5000 a season on average back to their villages, Tonga and other islands in the Pacific, sending that money back to countries where often the per capita income is less than $2000 a year.

“So is this the modern Labor Party?

“It’s only consistency is hypocrisy, cynicism, political opportunism - they have to be called out for this, for their hypocrisy.”

But Shadow Agriculture Minister Joel Fitzgibbon accused Mr Turnbull of being dishonest on the backpacker tax during media interviews today.

Mr Fitzgibbon said “even worse”, Mr Turnbull in an “act of desperation”, also sent a clear message from his “Point Piper Mansion”, to European backpackers that they are “not welcome in Australia”.

“His clear message to so called rich European backpackers was, ‘you’re not welcome here’,” he said.

“This is going to be very bad news both for our farmers and for our tourism operators.

“The Prime Minister can fix the backpacker tax today – he can do so by instructing his troops to back in 10.5pc – the only rate that makes sense and the only rate that Australian can hope to compete with countries like NZ.”