Nationals MP George Christensen has dismissed a push for a new visa category for agriculture workers, breaking ranks with partyroom colleagues and the farming lobby.
The National Farmers' Federation has been pushing for an agriculture visa to address farm labour shortages, which has stoked tensions within the coalition.
"Most foreign workers from developing countries send all of their money back home and don't spend it in Australia thus negating any economic stimulus," Mr Christensen said in a statement on Tuesday.
Mr Christensen is backing Prime Minister Scott Morrison's scheme to apply harsher welfare penalties to jobseekers refusing to take jobs on farms.
The coalition has also announced a register for farmers to tell the government about labour needs to help the government match them with workers.
"The agricultural visa which has been touted to address workforce shortages on farms is not the solution," Mr Christensen said.
Creating an agricultural visa has been a sore point for the Nationals, with Liberals pushing back against the proposal over concerns it could undermine relations with Pacific nations.
Mr Christensen's intervention adds a new dimension to the vexed issue, with Nationals still lobbying for an agriculture visa.
Mr Morrison insists that proposal isn't dead, echoing Agriculture Minister David Littleproud, who has raised changing current migrant worker schemes as an alternative to addressing labour shortages.
NFF president Fiona Simson has labelled the government's actions so far as a "shallow approach to a deep problem".
Deputy Nationals leader Bridget McKenzie admitted it was a complex issue, but said her party remained committed to addressing it.
"The Nationals have not given up on an agricultural visa," she told parliament on Tuesday.
Mr Christensen said farmers were relying on foreign workers, despite high levels of youth unemployment in some rural communities.
"My belief is that if you live in an area where there are jobs available doing unskilled farm work, then there should be no dole available in that area until those jobs are filled," he said.
The Queensland MP said reports of foreign worker exploitation were rife, particularly in the horticulture sector, and needed to be addressed before a new visa category was considered.
Instead, he wants to make it easier for backpackers from developed countries like the UK and Canada to work on Australian farms.
