FARMING groups have welcomed the Federal Government's decision to review its proposed tax hike on working holidaymakers, conceding it could exacerbate labour shortages in agriculture.
The decision to implement a cross-departmental review of the planned tax follows a campaign by the National Farmers Federation (NFF) and other farmer groups.
The NFF argued the proposed 32.5% tax on income would impact the availability of labour.
Member for Page Kevin Hogan met with Coffs Coast blueberry growers last week and said the review was a positive move.
"The whole thing is on hold as we look at other options," he said.
After discussions with the Treasurer, Mr Hogan said the government would have to "look at other areas" to "neutralise the budget" if the tax is scrapped.
"The tax is worth $500 million (over five years) - it's not an insignificant amount and there are a significant number of backpackers who come to Australia to work."
He said options the government could consider included increasing the number of backpacker visas granted to satisfy demand.