Barnaby Joyce has not ruled out negotiating a lower backpacker tax than 19%, with Labor, the Greens and senator Jacquie Lambie still holding the line on their proposed rate of 10.5%.
Pressure is mounting on parliament to break the backpacker tax deadlock before the Christmas break, with five days left in the parliamentary calendar.
The government has warned that, if its legislation is not passed by the end of next week, the backpacker tax rate will remain at 32.5% from 1 January, leaving the agricultural industry to struggle to attract backpacker workers.
The National Farmers Federation is furious about the delay.
Tony Mahar, the NFF chief executive, said this week that the major parties and crossbenchers ought to realise that the delay was affecting real people and communities.
He said the NFF had proposed a fairer tax rate in the range of 15% to 19%, unless the parliament determined that a lower rate was appropriate.
“While ever the government sees the tax as a budget fix measure, and while ever the opposition and crossbenchers see it as a political edge, we won’t get an outcome,” Mahar said.
The backpacker tax was being debated in the Senate on Wednesday.
Turnbull government ministers have previously said they would not budge on the proposal to cut the backpacker tax from 32.5% to 19%. But, when asked on Wednesday if the government would accept a slightly lower tax rate to secure passage of the legislation this year, Joyce would not rule it out.
He was asked: “Would the government be willing to compromise at all from 19%, or is it sticking to its guns there?”
Joyce answered: “Do you want the economic policy of this nation written by Jacqui Lambie? That is the question you’ve got to ask yourself.”
He was asked again: “Is that a definitive ‘no’ that you won’t move on the 19%, absolutely not?”
Joyce replied: “The Labor party is not suggesting where the savings are going to come from [to pay for their 10.5% proposal] … there’s $540m [cost] over the forward estimates for their promise because they also want to get rid of the passenger charge.
“So you say, ‘Great, cyclone, where’s the money coming from? Or are you just going to borrow that from the Chinese and people in the Middle East and bankers in London as well?’ Is that the solution to everything nowadays in the Labor party, you go out and borrow the money?”
He said Labor had not yet suggested cutting tax concessions in other policy areas to pay for a lower backpacker tax.
In September, when the treasurer, Scott Morrison, announced the planned 19% tax rate, he said the common law position was if the Senate was unable to resolve the issue then the backpacker tax would to default to 32.5c in the dollar.
“Now I don’t want to see that,” he said. “That’s why we’ve compromised.”
