Peak vegetable and potato grower body Ausveg has welcomed the Australian Government's formal announcement to review a backpacker tax that has been harshly criticized by the horticultural sector.

The measure would remove the tax-free threshold that currently applies for amounts below AUD$18,200, implying working holiday makers would be taxed at a rate of 32.5% from the first dollar earned.

"Vegetable growers rely on backpackers as a source of labour, especially during peak seasonal periods, and the backpacker tax threatens to act as a major disincentive to these workers coming out to Australia," said Ausveg spokesperson Jordan Brooke-Barnett.

"AUSVEG will be contributing to the review to ensure that the voices of Australian vegetable growers are heard by the Australian Government."

Brooke-Barnett warned the tax could have a crippling impact on the vegetable industry if backpackers are deterred from choosing Australia as a destination for working holidays.

"We’re pleased that the Government has finally commenced this review, and we hope that they listen to the concerns of every industry that relies on this critical labour source over the coming weeks.

"It would be incredibly disappointing to see Australia’s growers suffer as a result of a short-sighted policy decision that failed to acknowledge the flow-on effects of having backpackers live and work in regional Australia."

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