The Coalition announced on Monday that they had reached an agreement with crossbench senators to set the backpacker tax rate at 15 per cent, after earlier pushing for a 19 per cent rate.

However, the agreement was thrown into disarray on Wednesday when Labor’s amendment for a rate of 10.5 per cent received majority support in the Senate. 

Senator Derryn Hinch and One Nation’s Senator Rod Culleton both voted alongside Labor in favour of the amendment, after earlier indicating support for the Coalition’s 15 per cent proposal.

“We understood we had a deal,” Mr Hartsuyker said on Wednesday, following the Senate decision.  

“I can’t explain why they did it.”

“It’s very frustrating for an industry that wants certainty.”

At the time of writing, debate raged in the House of Representatives regarding the tax, with the Greens looking set to break ranks and save the Coalition by siding with their 15 per cent proposal. 

Earlier in the week Mr Hartsuyker spruiked the 15 per cent rate as a “fair balance” for farmers and tourism operators.

Mr Hartsuyker, who was at the forefront of forming the rate as the head of the review into working holiday makers, said that the rate “struck a balance between backpackers paying a fair amount of tax and the need to ensure we are financially responsible”. 

Mr Hartsuyker slammed Labor’s earlier support of a 10.5 per cent rate proposed by Senator Jacqui Lambie as an attempt to turn the issue “into a political circus”.