Australia strikes deal on backpacker tax

The Australian government struck a deal with the Greens, a minor party in the country, on the backpacker tax on Thursday. 

The support of the Greens means the motion, which proposes taxing backpackers working in temporary jobs such as fruit picking at a rate of 15 per cent, has the required support for implementation. The Greens agreed to support the motion in exchange for concessions from the government, which has agreed to a 100-million-Australian-dollar (74-million-US-dollar) boost to an environmental program and reducing a 95-per-cent tax on pension payments for backpackers.

Earlier Thursday, Australia's Prime Minister Malcolm Turnbull had slammed foreign backpackers as "rich white kids from Europe" during a heated parliamentary debate. In an extraordinary move, Turnbull singled out young German, Swedish and Norwegian tourists who take seasonal jobs picking fruit, saying they were being taxed less than Australians and poor workers from the South Pacific.

Turnbull told the national broadcaster ABC his political opponents were saying "a rich kid on holidays here from Germany or Norway, backpacking around, he or she should pay less tax and that Pacific Islander who comes here to pick fruit during the season and is sending that money back to his village."

His outburst came as the government battled to strike a deal with cross-bench senators over just how much backpackers should be taxed. The government originally wanted to hit backpackers with a 32.5-per-cent tax, but was forced to cut this to 19 per cent and then to 15 per cent when farmers complained they would not be able to find enough backpackers to pick their fruit at that rate.

ks/eg (dpa, rtr)