The Federal Government and the Tax Office have both moved to soften their stance on changes to horticultural managed investment schemes.

Earlier this month, the Government announced new investors in crop-based managed investment schemes such as apricots and olives would be denied up-front tax breaks from July.

Many Coalition MPs were angry, saying it would cost jobs in regional areas because new schemes would collapse.

Assistant Treasurer Peter Dutton says both the Government and the ATO are now consulting stakeholders over setting a transition period.

"The Government's always realised that this is an issue where people have very strong views, many people have strongly supported the decision taken by Government and others are opposed to it," he said.

"We need to make sure we deal with the situation adequately and fairly and that's exactly what the Government's doing."

Mr Dutton says backbenchers have raised the concerns of their constituents.

"The Government's taken a hard decision and we've taken an appropriate decision and the views really do represent the views that are out there in the community," he said.