A review into the Federal Government's controversial backpacker tax, which will be submitted to Cabinet soon, will raise concerns about a potential drop in international competitiveness, South Australian Senator Anne Ruston says.

Key points: Committee reviewing the backpacker tax has consulted with tourism, hospitality industries

Committee reviewing the backpacker tax has consulted with tourism, hospitality industries Industries are concerned the tax will drop Australia's competitiveness

Industries are concerned the tax will drop Australia's competitiveness A review will be submitted to Cabinet soon

The tax will mean foreigners on working holiday visas will be taxed 32.5 cents from the first dollar they earn, and a scrapping of the $18,200 tax-free threshold from July 1 this year.

On March 16, the Federal Government announced it would review the tax, because of widespread industry concerns about the impact on Australia's seasonal workforce.

A committee, headed by Tourism Minister Senator Richard Colbeck, has consulted with industry bodies who believe the proposed 32.5 per cent tax rate is too high.

The committee has heard the tax on working holiday-makers will hinder international competitiveness and cause a drop in regional Australia's seasonal workforce.

Assistant Minister for Agriculture and Water Resources, Senator Anne Ruston, said one of the biggest concerns raised was the impact of the tax on Australia's ability to attract people on working holiday visas.

"The tourism industry and hospitality industry have raised concerns about the level of the tax rate being non-competitive in the international market," Senator Ruston said.

"Which they believe would have detrimental impact on backpackers when they are deciding on where they are going to go."

She said industry groups were also concerned about losing working holiday makers to countries with similar economies.

"They were concerned that some would chose our competitors like New Zealand or Canada instead of coming to Australia," she said.

Senator Ruston said the review would be submitted to Cabinet shortly and people should expect an announcement in the next few weeks.

"There's certainly every chance that we'll see some changes," she said.

"Obviously it's a matter for Cabinet to decide, but there's been some very positive and proactive measures been put forward for consideration and I'm hopeful some of them will be adopted."

South Australia's Riverland is heavily reliant on seasonal labour and Citrus SA has previously raised concerns the tax will drive foreign workers away.