Backpacker tax hike fears

An Albany strawberry farm owner has concerns the Federal Government's proposed tax rate hike for backpackers could be a blow for his business.

Freshpict Strawberry Farm owner Wesley Tweedie said plans to tax international travellers on working holiday visas at 32.5 per cent on all income and scrap the $18,000 tax-free threshold from July 1 could make it harder to attract workers.

Mr Tweedie relies on backpacker labour from September until May or June.

"My main concern is we need a supply of people to harvest the crop and there aren't many people other than backpackers looking for that kind of work," he said.

"We are concerned it would drastically curtail our workforce."

Mr Tweedie supports a campaign by the National Farmers' Federation and WA Farmers to reduce the rate to 19 per cent.

Federal Member for O'Connor Rick Wilson said he thought 32.5 per cent had "overshot the mark" and supported a rate between 19 and 22.5 per cent.

"I think the Government has probably gone a bit too hard with 32.5," he said.

Mr Wilson said he discussed the issue with Prime Minister Malcolm Turnbull on Tuesday.

"People who don't live in regional areas probably don't understand … just how important backpacker labour is," Mr Wilson said.

"It is a vital part of our labour force."

Mr Wilson said he suggested international travellers on working holiday visas be paid 9.5 per cent superannuation in cash to offset the proposed higher tax rate.

"That would bring them back up to effectively 23 per cent," he said.

"It's a win-win because the money stays in the local economy rather than being spent when they leave the country and there's no advantage to employ backpackers than a local worker." Mr Wilson said the Prime Minister "did not give any guarantees" but "seemed keen" to have the Treasury consider his idea.