The plan to impose a 32.5¢ tax rate on backpackers from the first dollar they earn while working in Australia - rather than when they pass the $18,200 tax-free threshold - has been watered down.

A 19¢ tax rate from the first dollar backpackers earn will apply instead, effective from January 1. 

Binya farmer and NSW Farmers’ board member Helen Dalton was buoyant about the backflip.

Ms Dalton said the tax in its original farm would have “decimated the Riverina”.

“Backpackers are absolutely critical, they underpin our whole economy, especially in the horticultural industry,” she said.

“To be honest, backpackers do the work no one else wants to do.

“Backpackers are somewhat important to bars and cafes in Sydney, but if they don’t come out here to pick fruit then a whole industry would be wiped out.

“Not to mention, backpackers bring their family and friends out to visit the Riverina, which is a key driver of our local tourism trade.”

The federal treasurer also announced the tourism sector is in line for a $10 million hand out to market jobs to backpackers.

Riverina MP Michael McCormack denied the cash sweetener was necessary to undo reputational damage caused by backpackers spreading outrage around the globe since the tax was announced in the 2015 federal budget. 

Mr McCormack freely conceded “the horticultural industry could not have survived” the 32.5¢ tax rate, as “fruit would have rotted and been left on the ground without the backpackers”.

“People at the pub in Trundle right through to the farmers in the Murrumbidgee Irrigation Area, even business in and around Wagga, they all told me about the value of backpackers,” Mr McCormack said. 

“The Nationals in government fought hard to make sure backpackers remain a ready and mobile labour force to pick fruit, work in abattoirs and ply their trade in the hospitality industry.

“It won't take long to filter through social media that you can still come to Australia and earn good money and have a good holiday.

“I'm sure word will get around Europe, Asia and the Americas that we want backpackers to come in numbers.”

The government also reduced the application charge for working holiday maker visas by $50 to $390 and extended the age of applicants from 30 to 35 years of age.

Backpackers will now be allowed to work for the same employer for up to 12 months in the same region, an extension to the current six month limit.