Coalition agrees to 15% Backpacker Tax

UPDATE Nov 28, 2016, 1130: Backpackers will pay 15 per cent tax on what they earn while they’re holidaying down under.

After months of wrangling, the Turnbull government today gained the support of several independent senators including the Nick Xenophon Team, One Nation and Derryn Hinch.

The coalition was pushing for a rate of 19 per cent, while Labor wanted 10.5 per cent.


Treasurer Scott Morrison attacked the ALP, saying the compromise will hurt the budget bottom line.

“They wanted a lower rate of tax for foreign workers…and it will have to be paid for by Australian taxpayers,” he said.

“Don’t give me all this rubbish from the Labor Party about standing up for Australian workers and Australian taxpayers, they have just given them a kick in the guts.”

The treasurer said it was his job to mitigate the impact of the decision, to work the budget, get outcomes and move forward.

Pauline Hanson said the compromise was essential.

“It can’t go on, it’s ruined the season, one farmer’s already told me … the season’s finished, so they have to have some assurances,” she said.

Senator Hinch said 19 per cent is less than the tax in countries such as Canada.

“It really is a storm in a tea cup apart from the poor bloody farmers and their fruit,” he said.

“Whey you’re a backpacker you wouldn’t have a clue what the bloody tax is.

“What are you going to say, oh gee I’m not going to go to Australia, I’m not going to look at the Great Barrier Reef and Ayers Rock because their tax thing’s three per cent than somebody else, I think I’ll go to Iceland. That doesn’t make sense to me.”

EARLIER Nov 28, 2016, 0813:  After months of back and forth with Labor and the crossbenchers, the Coalition has agreed to lower the tax rate on working holiday-makers to 15 per cent.

Initially the Coalition were pushing for a 19 per cent tax, while Labor and the independents voted in favour of 10.5 per cent.

The Turnbull government is also pushing to get legislation to re-establish the industry watchdog passed when the Senate sits for the final week of the year.

Their chances look pretty slim however, as the Greens are expected to push to gain support for a Senate inquiry into the Attorney-General.

Senator George Brandis is reported to have struck a deal with Western Australia allowing the state rather than the Commonwealth to recuperate $1 billion from Alan Bond’s collapsed Bell Group.