VIDEO: Australian government backtracks on backpacker tax

The Australian government has said it will review a planned tax hike for foreign travellers working in the country, which would have had a major impact on Irish people travelling in the country. 

Young backpackers in Australia have been encouraged to work on farms with special visas, following a labour shortage for jobs like picking fruit.

However, as the government is faced with a big budget deficit, Prime Minister Malcolm Turnbull was planning to increase the amount of tax to be paid by foreign backpackers. He has now backtracked on those plans.

"There is no question that there have been issues with the so-called backpacker tax and that's why we're reviewing it," Turnbull has said.

The change follows complaints from farmers that the tax is turning off potential backpackers from travelling to Australia, and as a result they are having trouble finding labourers. There has also been a fall in the number of working holiday visas issued.

The ruling conservative government, which relies heavily on rural voters, faces a tight election in early July and so has put the tax plan on hold until the end of this year.