Farmers are breathing a sigh of relief after an eleventh-hour deal between the government and the Greens secured a 15 per cent tax rate for backpackers, ending an 18-month long saga of uncertainty.
The Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 passed the Senate 43 votes to 19 on Thursday night.
But the government is facing criticism because it will lose $275 million despite gaining a higher tax rate with the support of the minor party.
The last-minute deal brokered on the year’s final parliamentary sitting day will allow backpackers to keep 65 per cent of their superannuation at a cost of $55 million and includes a $100 million boost to Landcare projects.
The Greens hailed it as a common sense victory for farmers.
‘We’ve ensured that backpackers will continue to come to this country and provide the really important workforce that this country needs,’ leader Richard Di Natale said.
Despite raising the same amount of revenue as a 13 per cent tax rate, the deal will cost the budget bottom line more.
‘That’s right, because there is an additional 100m for Landcare, which we are proud of,’ Senator Di Natale told Sky News.
‘We were facing the prospect of leaving here today without anything except the risk of a 32 per cent rate within the agricultural community, meaning backpackers just wouldn’t come,’ he said.
‘We are proud of this because it is a win for farmers, a win for the environment, and ensures we’ve got some certainty’ he said.
He said the deal proved The Greens to be a ‘stable, dependable, genuine alternative’.
Growers were relieved to get certainty, lauding the Greens for talking sensibly with the government which had been one vote short of passing the rate in the senate.
‘We think that showed real leadership,’ National Farmers’ Federation president Fiona Simson told AAP.
Farmers could now plan next year’s harvest with confidence knowing they’ll have the labour to help them through harvest season.
But British backpacker Kirsty Fuller, who’s been working on farms in the NT for the past three months, says she’d stay regardless of the tax rate.
‘I want to be here, so I just get on and part with it,’ Ms Fuller told AAP.
‘I love being here … a tax wouldn’t influence my personal decision.’
Ms Simson said the extra concessions negotiated by not just the Greens but crossbenchers David Leyonhjelm and Nick Xenophon would also benefit the sector.
‘It was a little nerve-racking but it’s a good outcome at the end of the day.’
But Labor, which had promised to end the deadlock before Christmas, lampooned the deal as a bigger tax at a bigger cost.
‘Malcolm Turnbull is spending $100 million more so he can have a higher rate of backpacker tax. You can’t make this up,’ Opposition Leader Bill Shorten said.
‘If this is victory, I’d hate to see what defeat looks like.’
Treasurer Scott Morrison, responding to the fact the Greens deal coupled with the backdown from 19 per cent would cost the budget a total of $275 million, said it was better than the alternative.
He said the resolution would still reap a majority of the revenue that was originally sought in the 2015 budget proposal.
‘Well, today it’s 70 per cent of something rather than 100 per cent of nothing.’
Deputy Prime Minister Barnaby Joyce criticised Labor for being obstructionist, but welcomed the end to a long slog.
‘I know the uncertainty that was held out in regional areas. We felt for that uncertainty.’
The deal ends an 18-month political bunfight which caused the government to shift from an original budgeted rate of 32.5 per cent to 19 per cent and then 15 per cent.
Labor earlier in the day announced it would support a 13 per cent rate, having previously supported a 10.5 per cent rate.