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Lower house rejects backpacker tax cut

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November 25, 2016

Parliament’s lower house has rejected the Senate’s 10.5 per cent tax rate on working backpackers.

CANBERRA: Parliament’s lower house has rejected the Senate’s 10.5 per cent tax rate on working backpackers.

Labor, Greens and crossbench senators had earlier yesterday successfully backed independent Jacqui Lambie’s amendment to almost halve the Coalition’s 19 per cent rate, but the government later used its numbers in the lower house to vote it down.

One Nation and David Leyonhjelm supported the 10.5 per cent tax, while the three Nick Xenophon Team senators and Derryn Hinch sided with the government.

The bill will head back to the upper house to decide if it will insist on the changes, propose others or revert to the original proposal.

The government has warned the existing tax rate of 32.5 per cent will apply to working holiday makers unless its revised rate passes parliament.

‘‘This is a plain act of economic vandalism by the Labor party,’’ Prime Minister Malcolm Turnbull told MPs in answer to a question from Opposition Leader Bill Shorten.

The government managed to secure a small win in the upper house, undoing an embarrassing bungle from Wednesday night when its bill for a $5 hike to the international departure tax was scuttled by the absence of two One Nation senators.

Pauline Hanson and Brian Burston, who were attending a function elsewhere, were unaware the Senate was voting on the measure.

Labor agreed to the government’s request to recommit the bill, but not before demanding an explanation from the two senators who apologised for the misunderstanding.

The measure passed the Senate yesterday after the government agreed to a One Nation request to freeze the new $60 departure tax for five years.

Opposition leader in the Senate Penny Wong said the deal was worthless.

‘‘You cannot bind a future parliament — you have been conned,’’ she told One Nation senators.

‘‘They’ve done a deal with you because they’ve got egg on their face — this is no way to run a government.’’

Greens leader Richard Di Natale said One Nation had been dudded.

‘‘You might as well have had an amendment that said we want world peace.’’

Senator Hanson said her staff were still trying to learn the ropes and denied suggestions she had been duped.

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