The Greens have come to terms with the Turnbull government on the backpacker tax, securing an additional $100m for Landcare funding in the process.



The legislation passed the Senate on Thursday night, ending a day of arm-twisting and backroom dealing on the measure which culminated in the Greens agreeing to support a nominal tax rate of 15%, and a drop in the clawback of super payments from 95% to 65%.

Currently the government claims 95% of their compulsory superannuation contributions when backpackers leave Australia.



“What we have seen today is common sense prevail,” the Greens leader, Richard Di Natale, told reporters earlier in the day. “We are very, very pleased that we have been able to secure a commonsense outcome, to be the sensible voice in this Senate.”

Di Natale said the change in the super payments, combined with the 15% rate, meant the deal was effectively revenue neutral with a 13% headline rate. But the $100m spend for Landcare is a new government investment.

Labor pointed out that the combined deal with the Greens was significantly more costly for the budget bottom line than it would have been to agree with the opposition and the crossbench on a 13% tax rate.

Asked why the government would do a deal with the Greens when the budget impact was negative to the tune of $160m, and when it already had the numbers in the Senate to secure a 13% tax rate without the additional spend, the prime minister told reporters Landcare was a “great” investment.

The Coalition has cut $300m from Landcare since 2013.

The treasurer, Scott Morrison, said the agreement would see the government “achieve over 70% of the revenues that were set out in the budget”.

But the One Nation senator Malcolm Roberts expressed frustration at the turn of events, suggesting Pauline Hanson had supported the government throughout the imbroglio without asking for additional expenditure.

The 15% backpacker tax was a compromise put forward by @PaulineHansonOz and she didn’t ask for $100 million in return like the @Greens? — Sen. Malcolm Roberts (@SenatorMRoberts) December 1, 2016

The 11th-hour deal on the last parliamentary sitting day for 2016 followed a chaotic sequence on Thursday when the Turnbull government dug in behind a 15% rate, while a number of Senate crossbenchers, the ALP and, initially, the Greens, lined up to demand the government accept a 13% rate.

The National Farmers’ Federation, which had supported the 15% rate, on Thursday urged the government to accept the rate that parliament would deliver, rather than refuse to compromise and see the headline rate for the tax revert to 32.5%.

The political standoff continued until just after question time on Thursday when the Greens involvement emerged.

Di Natale explained the shift by his party from 13% to 15% over the course of Thursday as a desire to fix an issue that was creating significant problems for farming and horticultural communities.

“We needed a circuit breaker because we risked this whole thing descending into a farce – a farce that would have impacted on people living in regional communities whose livelihood was affected,” Di Natale said.

The handshake between the Greens and the government cleared the way for the necessary legislation to pass through parliament before the chambers rose for the Christmas break.

The deputy prime minister, Barnaby Joyce, took to Twitter to thank the Greens for cooperating with the Coalition.

Credit where credit is due. Thanks to the Greens for doing what Labor should have done. #backpackertax @RichardDiNatale — Barnaby Joyce (@Barnaby_Joyce) December 1, 2016

In the parliament, Morrison welcomed the decision by the Greens to support a 15% rate. The treasurer said the episode demonstrated the government could come to terms with One Nation senators, Nick Xenophon Team senators and, “once again, with the Greens”.

Morrison said the Senate had rebuffed Labor’s “belligerence”.

“The government has been able to get this done in the 45th parliament,” the treasurer said.

But the shadow treasurer, Chris Bowen, said Morrison had failed to mention the fiscal impact of his deal with the Greens.

“The treasurer has done a deal that involves a higher tax rate and less money for the budget,” Bowen said on Thursday afternoon.

Bowen said the deal with the Greens would cost the budget more than accepting a backpacker tax set at a rate of 13%.

He said Morrison was so determined not to do a deal with Labor on the measure, he’d been prepared to spend more in order to come to terms with the Greens.

Earlier in the day the prime minister used a series of media interviews to blast Labor for refusing to support a 15% rate.

In an attempt to ratchet up political pressure, Turnbull declared the ALP 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”.