One step forward one step back for Turnbull in the Senate

The Senate has again blocked the Government's backpacker tax creating a pre-Christmas headache for Prime Minister Malcolm Turnbull.  

A Government led proposal to set the controversial tax at 15% was reduced to 10.5% in an amendment supported by Labor, the Greens, Derryn Hinch, Jacqui Lambie, David Leyonhjelm and One Nation's Rod Culleton, this morning. 

The Government this week revised down its proposed tax rate from 19 to 15 per cent.

If a compromise on the rate of tax backpackers will have to pay fails to pass through both houses it will revert to 32.5% - a situation which many farmers have said will have catastrophic consequences for their ability to find labourers, 

Earlier in the week the Senate passed an amendment which was put forward by independent Senator Jacqui Lambie that would have seen the tax come in at a rate of 10.5% however that was rejected by the Coalition in the House of Representatives. 

The Prime Minister has since described reducing the rate too far as "economic vandalism."

However that rate was reduced earlier amidst a frenzied attempt to wrangle a positive result out of an increasingly uncontrollable Senate cross-bench. 

Fairfax media reports the vote to pass the tax at a rate of of 15% was defeated this morning - 35 votes to 32. 

However whie the backpacker tax may present a sore failure for the Turnbull led Coalition the Australian Building and Construction Commission legislation - which was the trigger for a double dissolution election has been passed. 

The ABC reports an amended version was passed by the Senate earlier this morning 36-33.

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