The controversial backpacker tax which is raising concerns among farmers that they could lose a significant proportion of their workforce, could also undermine Australia's aim to increase fruit exports to Asia and become the region's delicatessen.
Australian fruit exports are set to hit a record A$2.27 billion ($1.63 billion) next season, up 10 percent from the previous 2014/15 season, and backpackers on working holiday visas make up the bulk of fruit pickers during harvests.
Australia faces a ballooning budget deficit of about A$40 billion this year and the planned increase in tax for working travelers is estimated to net A$540 million between 2016 and 2020. Yet the tax could deter many backpackers from working in the country.
Horticulture producers are already struggling to find enough labor, according to a recent study by the National Farmers Federation, and farmers say that without enough labor, fruit will simply drop off trees and rot, making it unusable.
"The real challenge for Australia's delicatessen strategy is its input cost. Without backpackers, labor - the biggest driver of costs - will grow," said one agribusiness analyst.
The Australian government is set to pass the tax legislation this week, imposing the new tax from July 1.
