New deal close on backpacker tax after Morrison meeting

Derryn Hinch and Rodney Culleton have demanded Scott Morrison cut the backpacker tax to 13 per cent.

Another compromise deal on the backpacker tax has been ­presented to the Turnbull government, with crossbench senators Derryn Hinch and Rodney Culleton demanding Scott Morrison cut the tax to 13 per cent to win their ­support.

After signalling the government would not budge on a 15 per cent rate for seasonal workers, the Treasurer last night met the two crossbench senators to try to ­secure their support.

Senator Culleton, who broke ranks with his One Nation colleagues to support a 10.5 per cent rate, told The Australian last night that he and Senator Hinch had “negotiated an outcome” with Mr Morrison for the rate to be further reduced from 15 per cent.

“We are very confident that we have achieved that better outcome for both sides, for the government, for the crossbench, for the backpackers, for everyone,” Senator Culleton said.

When asked whether Mr Morrison had accepted the proposal, Senator Culleton said “in principle, yes”.

“He was going away to talk about it, but he said if we were fair dinkum, they would go away and be fair dinkum too, and this is a better outcome.”

Senator Culleton said he and Senator Hinch had been “very businesslike”.

Although the two had “dug in”, the ball was now back in the government’s court.

The Treasurer’s office last night would not confirm any new deal.

Last night’s talks came after senators Culleton and Hinch sided with Labor and Tasmanian senator Jacqui Lambie to defeat the government’s 15 per cent rate in a surprise vote yesterday morning.

Following the humiliating ­defeat, Mr Morrison won over Liberal Democrat senator David Leyonhjelm to the government’s position by agreeing to new privacy measures for the list of farmers and tourism operators who hired backpackers.

But the Treasurer said that still left the government one vote short and he vowed not to return the backpacker tax bills to the Senate until the government was certain of securing crossbench support.

“When we have a clear position from the requisite number of senators then we will enable the bills to go back to the Senate so they can be addressed this week,” Mr Morrison said. “I think that is what growers want. I think that is what our agricultural communities want, the tourism industry.”

Asked why the government would not accept the 10.5 per cent tax rate proposed by Senator Lambie and supported by Labor, Mr Morrison said the government­ ­already had compromised enough.

“I don’t believe taxpayers who have already — on the basis of ­existing compromise — are going to have to find $120 million to pay for that compromise, that that bill should now be in excess of a quarter of a billion dollars,” he said.

“I don’t think that’s a res­ponsible thing for the government to do.”

Labor agriculture spokesman Joel Fitzgibbon said the opposition and the government were ­involved in “a Mexican stand-off”.

“They will attempt to blame the Labor Party for this chaos,” he said.

“The solution here is very simple: Scott Morrison should swallow his pride.

“He should walk into the House of Representatives ... and accept the will of the parliament that the backpacker tax rate should be 10.5 per cent, to make it competitive with New Zealand.”