Government draws a line in the sand on backpackers’ tax and water plan
Finance Minister Matthias Cormann says the government will not compromise any further on the backpacker tax which is now stuck in the Senate as Parliament heads into its final sitting week for the year.
Senator Cormann yesterday indicated a lack on willingness to break the impasse with Senate cross-benchers and Labor who have opened the way for compromise on the income tax rate for working holiday makers lying somewhere between 10.5 per cent and the government’s plan for 19 per cent.
“We believe that we have compromised as far as we can sensibly compromise, given that the Budget bottom line cannot afford a further tax cut beyond what we have put on the table,’’ Senator Cormann told the ABC’s Insiders program on Sunday.
“We are focused on preserving the AAA credit rating and getting the Budget back into surplus as soon as possible.
“If we were to provide a bigger tax cut to foreign workers, we would have to recoup that either by higher taxes on Australians or by deeper cuts on the spending side in Australia. We don’t believe that is appropriate.”
Senator Cormann also indicated the Government was not “backtracking” on the Murray-Darling basin plan, despite threats by Nick Xenophon, who holds a crucial block if three votes in the Senate, threatening to boycott the backpackers tax legislation and the bill establishing the Australian Building and Construction Commission until the water dispute is resolved.
And crossbench senator David Leyonhjelm has threatened to vote against the ABCC bill if the federal government accommodates Nick Xenephon on water.
The brawl over water is over whether an extra 450 gigalitres of water set aside for environmental flows in the river in South Australia under a 2012 deal will be allocated. That allocation is on top of the 2750 gigalitres set aside for the length of the river across the east coast states. Agriculture Minister Barnaby Joyce and NSW, Victoria and Queensland have flagged withholding the extra allocation, claiming there would be an impact on communities upstream.
Senator Cormann said the government was committed to the National Water Plan as it had been legislated.
“We always engaged in conversations with Nick Xenophon and indeed with senators from right across the spectrum on how we can promote the national interests,’’ he said.
“We will continue to have all of these conversations with Nick Xenophon, consistent with established practice. I don’t think it is useful for us to have conversations with Nick Xenophon through the media.”
Senator Cormann’s comments coincide with former Prime Minister telling Sky News on Sunday morning that there had to be “a big push on budget repair” and that might include revisiting controversial measures from the 2014 Budget such as the Medicare co-payment and deregulated university fees.
“There needs to be a big new push on budget repair,’’ Mr Abbott said. “If we don’t get the budget better, we are ripping off our children and our grandchildren.”
He said the Government needed to reconsider “some of the issues from the 2014 budget” but did not specify which ones.
by Leon Gettler, November 28th 2016
