In its report, it said that Growcom has met with the Queensland Farmers Federation and Cotton Australia over mounting concern about the impact of the loss of the tax-free threshold for working holiday, or 417, visa holders from 1 July.

The parties agreed to launch an intensive lobbying campaign to highlight the severe impact of the measures – announced in last year's federal budget – on the agricultural sector, which fears an exodus of seasonal farm labour.

"It's very simple. It will deter backpackers from coming and working on our farms," Growcom chief executive officer, Pat Hannan said. "Without labour to get the crop into the ground and particularly to get the crop out of the ground, our farmers, some of them, are under threat of losing their businesses. It's really that serious."

Currently, working holidaymakers are eligible for the same tax-free threshold as Australian workers, and they can earn up to $18,200 without paying tax. However, that is set to change on July 1 when they will be taxed from the first dollar they earn.

"When you're saying to backpackers, you might have been paid $22.62 an hour before but now we're only going to pay you $14.59 an hour, I've got to say that gets around pretty quickly and the backpacker community is going to be less inclined to come to Australia to enjoy their working holidays," Hannan said.

He added that the decision would hurt farmers and rural communities, which relied on backpacker labour. "There are a lot of rural communities that survive based on the backpackers and labourers that come into those communities during peak planting and harvest times. "It's very short-sighted not to take the dramatic effect on the economies of those areas into account when you make changes the way the Government has. The backpackers are affected, the growers and farmers are affected and the local rural economies are affected."

Food producers fear backpacker tax backlash

ABC Rural also reported that fruit and vegetable growers in the far northern food bowl of the Atherton Tableland said they had already noticed a drop-off in the number of backpackers seeking work, and expected that to increase as the changes took effect.

Mareeba mango grower, Joe Moro, told the broadcaster, anecdotally, the Federal Government's proposed tax hike already was starting to hurt rural towns and farms.

"By referrals last year, for example, we had a lot more backpackers around looking for work and also making enquiries through the Mareeba district fruit and vegetable growers' email system," Moro said. "This is the first season it's been in play. As backpackers or working holiday visa operators find out about this, it will become a reason why not to come here."

Moro said he hoped the Federal Government would listen to the genuine concerns of farmers in far north Queensland, where backpackers made up about 35-40 per cent of the seasonal workforce.

"It's a way of balancing the budget, we understand that, and that's our initial response from government when we raised the issue back in July when this came out as part of the budget, but since then, people have got more angry about it, especially farmers as we got closer and closer to the season, the fact they believe this is going to be disincentive for people to come to work on farms because they're going to be taxed too high."

Northern Territory Farmers concerned backpackers are already making decisions not to travel north

The chief executive of the Northern Territory Farmers Association told ABC Rural that the planned tax changes will be a ‘significant issue’ for both farming industries and backpackers.

Shenal Basnayake said farmers in the Top End were concerned backpackers had already decided not to travel north this year to work on farms, because of the planned tax changes.

"From the conversations we've had with our members, they're saying there's chatter amongst the backpackers already that these changes are coming," he said. "And there's concern these backpackers won't come if we tax them at this high rate."

Basnayake said NT Farmers Association has been in contact with Growcom, AUSVEG and other key farm lobby groups; and had written to a number of key federal and state politicians, and were hopeful the planned tax would be reconsidered. "We're hopeful something will happen at a Federal level and the tax office will take [our concerns] into consideration and look at altering their decision.”

Source: abc.net.au