Budget 2016: MPs urging Scott Morrison to delay ­backpacker tax

Scott Morrison is under pressure to buckle to regional MP concerns that would dent his freshly minted budget by $40m.

Scott Morrison is under pressure to buckle to concerns from ­regional MPs and delay the ­backpacker tax by six months, a move that would dent the Treasurer’s freshly minted budget by $40 million.

Farming and tourism groups are lobbying to stall the controversial measure, announced last year and kept in Tuesday’s budget to raise more than $500m over the forward estimates. It is due to come into effect on July 1.

Mr Morrison said yesterday he would not be accepting a proposal put forward by Tourism Minister Richard Colbeck and MPs to scale back the 32.5 per cent tax rate to 19 per cent, saying it was not a satisfactory policy position.

“The government isn’t contemplating that proposal and we are not proceeding with it,” Mr Morrison said.

“There are a lot of complicated issues here and I don’t think we’ve actually resolved at a point yet where I think we’ve got good policy, and I’m not going to back policy which I don’t think is good policy. So that issue remains live.”

Mr Morrison said the changes announced last year meant backpackers were being treated “like all other non-residents for tax purposes” and that making industry-­specific changes was complicated.

The National Farmers Federation, tourism groups and regional MPs have been lobbying for a rethink of the proposal, which is forecast to reap $540m in the next three years, based on the average $15,000 earned by working holiday makers.

About 240,000 backpackers arrive in Australia each year, with more than 40,000 working on farms in seasonal jobs such as fruit picking. Thousands more fill casual tourism and hospitality jobs in remote and regional areas.

Mr Morrison is considering postponing the new tax by six months to allow further consultation but $40m in funding is needed to fund the delay.