AUSTRALIA’S farmers are looking forward to a quick resolution to the backpacker tax debate after the Federal Government today announced it will support a 15 percent rate for working overseas holiday-makers.

Treasurer Scott Morrison said the Coalition will support a 15 per cent tax rate for working holiday makers and introducing a bill into the House of Representatives, after a deal with Senator Nick Xenophon.

The Coalition initially wanted a backpacker tax rate of 32.5pc, but lost a vote for a 19pc rate in the Senate last week, with Labor, the Greens and cross benchers wanting a 10.5pc tax.

The Victorian Farmers Federation today applauded the compromise, said it required support from the crossbench or Labor MPs to pass through the Senate.

“This is a welcome breakthrough and we hope that the Senate can pass the amended Bill so our farmers can stop worrying about where their labour will be coming from,” VFF Horticulture Vice president Emma Germano said.

“The backpacker tax has been a source of great stress for the agricultural sector over the past 18 months, but now we can put the saga behind us and get on with our jobs providing food to Australians.

“Backpackers are a vital source of temporary labour for farmers, and we’re pleased to finally see a resolution to the whole saga in line with the position the VFF took to the Government early this year,” Ms Germano said.

More than 40,000 visa holders work in the agriculture industry each year and bring in around $3.5 billion to the Australian economy.

The VFF and its partner organisation the National Farmers Federation took a proposed tax rate of 15-19 per cent to the Colbeck Review in April.

NFF chief executive officer Tony Mahar said the backpacker tax debate has been a painful process, but the federation wholeheartedly welcomed the announcement that a compromise rate of 15pc has been reached.

“We now ask that the Senate expedite passage of the relevant legislation to provide the long needed certainty to the sector and allow businesses to start rebuilding backpacker interest in on-farm jobs.

“In time we hope that lessons are learned so that the farm sector is never compromised in this way ever again.”

WAFarmers CEO Stephen Brown said the organisation was pleased for industry that a fair compromise had been reached.

“The 15 percent compromise is a huge relief to farmers as we head into the peak working season for backpackers in the agriculture, tourism and hospitality sectors,” Mr Brown said.

“The Government has adopted a common sense approach which will see backpackers taxed at the same rate as those working in Australia through the seasonal workers program.

“Streamlining the tax rate to 15 per cent across the board for all foreign labour will minimise confusion for employers and employees, while ensuring Australia remains an attractive competitive nation to holiday and work,” he said.

“Further, there should not be any negative impact from the 15 per cent tax rate for Australian workers in the industry as they will still receive the $18,200 tax free threshold.

“The extra four per cent backpackers will save will also be of benefit to the Australian economy as they will spend those additional funds in regional communities.”