Malcolm Turnbull has launched a strenuous attempt to persuade either Labor or key Senate crossbenchers to fold on the backpackers tax as the 2016 parliamentary sitting moves into its final day.
But over the course of the Thursday, the government’s jawboning was rebuffed by a number of Senate crossbenchers, the ALP, and the Greens, who lined up to demand the government accept a 13% rate.
The National Farmers Federation has also joined calls for the government to accept a 13% rate.
The NFF president Fiona Simson said the government needed to take the best offer. “Do the deal today,” the NFF president Fiona Simson told Sky News.
The prime minister used a series of media interviews early on Thursday morning to declare Labor wanted “white kids, rich, white kids from Europe, who come here on their holidays, to pay less tax than some of the Pacific Islanders from some of the poorest countries in the world”.
.@TurnbullMalcolm says Labor is supporting a lower tax rate for rich Europeans than workers from Pacific Islands https://t.co/PFgrmgoxDF
— Sky News Australia (@SkyNewsAust) November 30, 2016
The ratcheting up of the rhetoric follows the Senate defying the government’s attempt to set the rate of the backpackers tax at 15% on Wednesday, imposing a rate of 10.5% instead.
A number of crossbenchers, including the One Nation senator Rod Culleton, the Justice party senator Derryn Hinch, and Tasmanian independent Jacqui Lambie are lobbying for a compromise 13% rate.
Over the course of Thursday, Labor joined the 13% bloc. Addressing reporters, the Labor leader Bill Shorten said 13% would “get the balance right.”
“There is a solution on the table for Malcolm Turnbull,” Shorten said. “Our message to Malcolm Turnbull is grow up, swallow your pride, accept a solution – it is not the perfect solution, but it is the best possible solution.”
The Greens also signalled they were likely to support 13%.
With the arm-twisting in the Senate still in progress, Turnbull was careful in his media blitz not to criticise Hinch or Culleton, directing his political attack at the ALP.
“I know everyone wants to jump onto Derryn Hinch and Senator Culleton, but let’s face it, Bill Shorten is there as leader of the opposition,” the prime minister told the ABC.
“If the Labor party supported the 15% tax rate, it would fly through the Senate. He knows that.”
“But he has got to stand up for the position he’s taking and what he’s saying, is that backpackers from Europe should pay less tax than Australians and they should pay less tax than Pacific Islanders, who are working here over a season so they can send money back to their villages in some of the poorest countries in the world.”
Labor has shrugged off the attack, and argues Turnbull’s characterisation is factually inaccurate.
The opposition says under the tax rules for backpackers, 95% of their compulsory superannuation contributions are claimed by the government when they leave Australia.
Labor says the combination of super tax and the tax rate means the effective tax rate for backpackers under the 10.5% imposed by the Senate earlier this week would be higher than the rate for the seasonal worker program, as these workers are not subject to the same superannuation clawback arrangements.
“This is an indication of how desperate the prime minister has become as his policy crashes down around him,” the shadow finance minister, Jim Chalmers, said on Thursday morning.
