HAPPIER DAYS: The owner of 1770 Castaways says the backpacker tax will keep tourists away from Australia.

HAPPIER DAYS: The owner of 1770 Castaways says the backpacker tax will keep tourists away from Australia. Declan Cooley

AGNES Water tourism operator Bruce Rhoades has labelled the proposed backpacker tax "blatant greed and robbery".

Despite the government backing down on its proposed backpacker tax, which would have slugged working holidaymakers 32.5% tax on their earnings, the government will tax them 19% from the first dollar they earn up to $37,000.

Mr Rhoades, who owns 1770 Castaways and takes tourists on adventure tours around various islands off the coast at Agnes Water, was happy the tax was reduced but still thought it was "daylight robbery".

"I want it lower but I'm not going to beat my head against a brick wall," he said.

Having recently branched out into the "Australian market", Mr Rhoades said his business was doing well.

But he attributed a drop in international tourists going into winter this year to fears about the tax.

"Everyone in tourism would feel the effects of the tax (because although) they work in Bundaberg, they spend it in Agnes Water," he said.

"(Backpackers) have told me they want to stay but will leave because they're feeling ripped off.

"Because they'll be making less money they won't want to work here and, if they don't work, they won't spend their money."

British backpacker Matt Pointon, who lives at a hostel at Agnes Water and has a degree in adventure tourism, said Australia would be a "less desirable place" for backpackers to come because of the tax.

"Australia has a high cost of living and there's no cheap way to do it so most people have to work if they want to come here," he said.

"With this tax, though, they'll now start to look at alternative countries like New Zealand and Canada where the tax is less.

"We do the jobs Australians don't want to do and it's an insult to backpackers who feel like they're being put out even though they contribute to the country."

With Agnes Water about to hit its busy season he said there were empty beds and fewer people at Agnes Water. "It'll take a long way for Australia to come back from this," Mr Pointon said.