Treasurer Scott Morrison has dampened speculation that the controversial backpacker tax will simply be "axed", saying any compromise would still be required to deliver the $500 million-plus budget boost of the original package.
The backpacker tax, which is currently on ice pending a review, has become the latest source of friction between the Coalition backbench and Prime Minister Malcolm Turnbull's cabinet but on Monday Mr Morrison indicated his "fiscal task" would not take a back seat to the demands of regional MPs and farmers.
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Barnaby Joyce has taken to radio to clear the air over comments Nationals MP George Christensen made about the backpacker tax. Courtesy ABC.
"If there are changes to be made, it is my view as Treasurer they will be made in a way that does not disadvantage the budget," he said.
Earlier, acting Prime Minister Barnaby Joyce said a revised plan would be outlined in the "next month or so" but he also warned that the government would not walk away from even $100 million of the $540 million the tax was supposed to raise by 2020.
"There is a cost to this issue and we will be finding the offsets and we will be making sure that overall the books are balanced," he said.
Originally slated to begin on July 1, the backpacker tax, announced by former treasurer Joe Hockey in his 2015 budget, would have removed the $18,200 tax-free threshold for foreign workers under 30 and instead tax them 32.5¢ from the first dollar they earn in Australia.
Fruit and vegetable growers in all states have warned that the changes would smash the seasonal workforce they rely on at harvest time.
Some Queensland growers, including lettuce farmers, have delayed planting crops out of fear they will not have the workers to pick them.
![Treasurer Scott Morrison says any changes to the backpacker tax will not "disadvantage the budget".](/web/20160922005618im_/http://www.theage.com.au/content/dam/images/g/r/j/d/o/m/image.related.articleLeadwide.620x349.grjdpi.png/1474428888489.jpg)
Queensland National Party MP George Christensen who was at the forefront of the backbench insurrection over superannuation changes, which led to last week's compromise outlined by Mr Morrison, said over the weekend that he expected a backdown.
"I believe the government is going to axe the backpacker tax and put in place arrangements that farmers can accept," he said.
On Monday, there was speculation that the 32.5¢ backpacker tax could be swapped for a new farm worker visa and a less burdensome rate of between 15¢ and 19¢.
Mr Joyce said no decisions would be made before a report being prepared by Deloitte is returned and he and Mr Morrison take a submission to cabinet.
A backbench committee led by South Australian Liberal Tony Pasin and a review led by Mr Joyce's assistant minister Luke Hartsuyker will also inform the process.
The government has promised the alternative tax arrangements will begin on January 1 next year.
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