Backpacker tax decision due in weeks

The federal government will unveil a revised backpacker tax within weeks, with the Farmers Federation proposing a cut to 19 per cent.

The controversial tax, which is due to come into effect from July 1, would have cut backpackers off from the tax-free threshold of $18,200 of income, instead charging them 32.5 per cent from the first dollar earned.

"We actually need more backpackers, not less backpackers to harvest our crops, to pick our fruits," said Brent Finlay, president of the National Farmers Federation.

He was in Darwin on Wednesday for the Food Futures conference, and said the NFF, which represents 60,000 farmers, had proposed the government revise the tax down to 19 per cent.

"If there's less food harvested we will see an increase in prices of food," he said.

"We've got all this food, it has an economic value in our paddocks, in our fields, on our trees. We need to pick the lot."

The government is reviewing the tax and will have a response within weeks, said Liberal Senator Anne Ruston, Assistant Minister for Agriculture and Water Resources.

"We think we're close to coming to a compromise position which will maintain budget integrity but also maintain our competitiveness in the international market, because we're obviously competing with other countries for this particular labour force," she said.

She said some travellers stayed in Australia for up to two years and should be taxed.

"They drive on our roads, they use our hospitals, they use our services, they use our infrastructure, and I don't think it's unreasonable to be asking them to pay something towards the things they're using while they're in the country," she said.

Joel Fitzgibbon, Labor's shadow minister for Agriculture, said the proposed tax would hit the NT the hardest.

Some local fruit farms have a 95 per cent foreign workforce and "they simply cannot get the labor they need in the picking season here in the NT without backpackers", he said.

"There is no doubt the backpacker tax will send backpackers away from Australia to other jurisdictions where they don't have to pay this tax."

He said the proposed tax would limit the development of northern Australia.

"You can't do it without a workforce, and this backpacker tax is an Exocet missile right into the heart of the workforce here in the NT."