A proposed tax on migrant workers was not removed from Australia's Federal Budget delivered on May 3, despite protests from growers who claimed it would jeopardize the horticultural sector.

The tax will remove the tax-free threshold and increase the amount of tax paid by workers who come to Australia under the Working Holiday Maker program, and is expected to deter workers away from an industry that is already facing high levels of labor scarcity.

"The decision by the Federal Government to keep the proposed backpacker tax unchanged in the Federal Budget could impact the ability for Australian vegetable growers to harvest their crops and potentially devastate the industry,” said AUSVEG Deputy CEO Andrew White.

“Australian growers rely on backpackers to offset domestic labour shortages and perform the high amounts of manual labour needed in vegetable production. This decision endangers the availability of this important labour source and could leave growers unable to get crops off the field.

He said the industry hoped Treasurer Scott Morrison would be able to find a resolution in the next few weeks that would not threaten growers' ability to attract the workers they needed to harvest their crops.

"We initially welcomed the Federal Government’s review into this tax because it appeared as though they were prepared to acknowledge the strong opposition from Australian farming and tourism bodies."

The Working Holiday Maker program, which includes the Working Holiday (subclass 417) visa and Work and Holiday (subclass 462) visa, allows visa holders to stay in Australia for 12 months and work for up to six months with any one employer.

Statistics from the Department of Immigration and Border Protection show that the number of backpackers coming to Australia has dropped repeatedly over the past two years, with over 34,000 fewer visas granted in 2014-15 than in 2012-13.

“While Australian growers’ first preference is always to employ local workers, there is simply not enough local labour to satisfy demand during peak harvesting periods, and backpackers play a vital role on Australian farms by providing a workforce during these critical times,” White said.

"The ongoing decline in backpackers visiting Australia must be arrested if the Australian vegetable industry is to remain viable.

"Any further decrease in the number of backpackers visiting Australia due to the tax could have a crippling impact on the Australian vegetable industry, threatening the future productivity and profitability of our growers."

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