Morale within the Turnbull government spiked on Wednesday on the success of its long-denied building unions watchdog legislation, but its smiles were shortlived when a crossbench deal on its 15 per cent backpacker tax collapsed just half an hour later.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Treasurer Scott Morrison had been so certain of the agreement that he paraded the crossbench deal with Pauline Hanson's One Nation on Tuesday, telling the Opposition it could "go take a flying leap," because its support in the Senate was no longer needed.
However, that was before renegade One Nation senator Rodney Culleton broke ranks with his party to vote with Labor's proposed 10.5 per cent alternative, as did another senator, Derryn Hinch.
Coalition relief turned to rage when crossbench senators thought to be on-board with a compromise tax rate of 15 cents in every dollar earned by backpackers, jumped ship, siding instead with the opposition.
That put the government back at square one on the backpackers tax and left Mr Turnbull warning that Labor would be blamed if the default of 32.5 cents in the dollar is allowed to come in, sending potential fruit-pickers to lower tax countries, such as New Zealand.
The Labor amendment to reduce the rate was passed by 35 votes to 32.
Ahead of the vote, Nationals leader Barnaby Joyce had gathered his entire partyroom for a press conference to declare the issue "fixed", while deputy leader Fiona Nash praised the 15 per cent rate as "a good outcome." But it was no outcome at all.
Finance Minister Mathias Cormann immediately ruled out supporting the amended bill in the lower house. "The people who got stuffed today by Labor, Greens, Senator Hinch, Senator Culleton are the farmers of Australia," he said.
At the time of going to print the final question time of the year had just finished with no resolution in sight. Labor and the cross bench stood strong with their compromise of 13 per cent tax rate, but the Coalition refused to back down from 15 per cent.
During question time, Mr Shorten asked if Mr Turnbull was going to let Parliament rise without the backpacker tax being resolved.
Mr Turnbull said the government had already compromised. It's up to others to do the same, he said.
If no compromise was reached yesterday afternoon the issue will be debated back and forth over the summer until Parliament sits again next year.
