A labour hire operator says backpackers and international workers are already turning their backs on Australia due to the Federal Government's budget changes.

The federal budget proposed removing the tax-free threshold for those on working holiday visas, forcing them to pay at least $32.5 per cent tax on every dollar then earned.

Matthew Simpson, owner of a labour hire company at Mildura in north-west Victoria, said the local farming industry relied on thousands of these workers to pick and prune fruit properties each year, but travellers, on seeing what was proposed, were now planning to go to places like Canada and New Zealand instead.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 57 seconds 4 m 57 s Labour hire says backpackers won't come under new tax ( Deb O'Callaghan ) Download 2.3 MB

"The damage in many ways is already done," he said.

"Because the hot topic now in Korea is '=do not go to Australia, do not go to Australia, tax is going to kill you. You are not going to be able to eat, survive, live.

"So they're not going to come here."

Mr Simpson said it used to be the "golden egg and promised land" for travellers and workers to come to Australia and work, travel and learn English, but this has changed everything.

He said he saw the Four Corners program into labour hire exploitation and they were talking about people getting paid an illegal wage of say $13 or $15 a hour.

"With this new tax, if they were to get paid $21 an hour, their wage is going to be $12 dollars per hour legally," Mr Simpson said.

Mr Simpson said the international workers were not stealing any local people's jobs, and the budget changes would not improve local employment, like the government claimed.

"The unemployed aren't going to pick up the slack, it's going to leave a void," he said.

"And in that void is going to be flooded with criminal activity, more illegal workers, more underhanded practices, getting paid cash and more poorer conditions.

"It's going to breed gangsters in the area."

Sang Yub Roh (also known as Jeff), Mr Simpson's Korean business partner, said that as soon as the Federal Government released the budget, social media in Korea was already saying "don't go to Australia".

"Just now, many people seriously talking about it," he said.

"Someone who thought they might have wanted to go to Australia, but at the moment, they think I don't want to go there.

"I don't want to go to Australia, I can't make any money, maybe I can't survive it there."

Mr Simpson and Jeff said they were now trying to spread the word internationally, through their networks, that they were fighting the government changes, and that the people in Australia wanted to employ them.