Sydney travelled, learned a trade and found love in Australia. It might have been a different story under Labor’s migration plan

A working holiday visa lets eligible young travellers spend time in Australia while working to support their travels. Its purpose is temporary travel combined with employment, often in areas facing labour shortages. Schetter arrived from Alberta in 2019 and used the visa to build a life far beyond an ordinary holiday.

Her original visa was nominally one year. She worked at the Watermark hotel in Townsville, regional Queensland, during Covid-19 restrictions. That regional work, combined with temporary loosening of visa rules, repeatedly extended her stay. Over seven years, she travelled around Australia and overseas, learned a trade and made friends worldwide.

Schetter’s visa will run out next month, so she plans to return to Canada. Her Australian partner may follow after receiving a visa. She says the proposed rules might have stopped her applying for a second year, showing how visa settings can shape both personal lives and regional workforces.

The Labor government wants to reduce the number of repeat working holiday visas. Second-year places would fall from 57,000 to 45,000. Third-year places would fall from approximately 31,000 currently to just 5,000. The proposal is part of a wider attempt to reduce net overseas migration and target migration more closely to Australia’s current needs.

Instead of every eligible applicant receiving a place, applicants would enter a ballot for the limited second- and third-year visas. The successful applicants would be the lucky few. Holidaymakers from the United Kingdom would be exempt from the new limits, as they already are from the regional-work requirement.

The change has alarmed regional employers. Schetter says she might not have applied for a second year under the proposed system. Businesses fear fewer repeat visas could make regional work less attractive and leave hotels, tourism operators and other employers short-staffed.

The article does not state the total number of working holidaymakers currently living in Australia. It does say approximately 31,000 third-year visas are issued currently, compared with a proposed limit of 5,000. It also gives a local estimate of 5,500 working holiday visa holders in Cairns, showing the concentration in major regional destinations.

Their importance is especially clear in Townsville. A chamber of commerce survey found that about 70% of local businesses employed at least 10 working holiday visa holders. Those workers represented well over 60% of the businesses’ total staff headcount. At the Watermark hotel, between 40 and 60 of 120 employees may hold these visas.

Employers say local unemployment is low and they cannot persuade enough residents to take these jobs. They fear reduced visa access would cut staffing, hours and business activity across regional Queensland, where hospitality and tourism rely heavily on short-term workers.

Fewer working holidaymakers could reduce the labour available to tourism, hospitality and agriculture in regional Queensland. These industries often need many short-term workers, especially in places where unemployment is low and employers say local residents are difficult to recruit. The concern is not only slower growth but also the survival of individual businesses.

Townsville’s business community says some firms depend heavily on visa holders. Kickon Group’s Watermark hotel can employ 40 to 60 working holiday visa holders among 120 staff. Its director says the business could be forced to cut hours, as happened when backpacker labour dried up early in the pandemic. North Queensland businesses warn that some could become insolvent.

Cairns faces similar risks. Local businesses estimate 5,500 working holiday visa holders there. A state politician says the policy could slow Cairns’s growth and possibly push the city into recession. Reef tourism operators, hotels and agricultural employers may therefore compete harder for a smaller workforce.

Australia has issued one-year working holiday visas since the Whitlam government. John Howard added a second year in 2005. A third year became available in 2019. These extra years connected longer stays with work in regional Australia, helping employers access temporary labour while giving travellers more time to work and travel.

To qualify for a second year, a worker had to complete at least 88 days in a prescribed industry in regional Australia. The definition of regional Australia is broad. It includes places such as the Gold Coast and Newcastle, as well as all of Tasmania, South Australia and the Northern Territory. UK holidaymakers are already exempt from this regional-work condition.

The rule is intended to direct workers beyond Sydney and Melbourne toward areas needing labour. Businesses now fear the proposed visa cap could weaken that incentive. If another country or major Australian city seems more attractive, regional employers may receive fewer applications despite their need for staff.

A stricter system could change where backpackers travel and work. The second-year pathway currently rewards regional work, but fewer places and a ballot would make a longer stay uncertain. Workers might decide that spending time in Townsville is not worth the risk if they may still miss out on the visa extension.

Businesses say the 88-day rule could lose value. Townsville employers already report that many working holidaymakers would consider New Zealand before visiting the city. Others may choose Sydney or Melbourne, even though regional work is the route to an additional year. UK holidaymakers face a different situation because they are exempt from regional work and the new limits.

That shift could deepen regional labour shortages. Townsville has low unemployment, and employers say they cannot recruit enough locals. If backpackers choose larger cities or other countries, hotels, tourism businesses and agricultural employers may lose the flexible workforce they rely on, while regional growth slows.

Net overseas migration, or NOM, measures the overall contribution of overseas migration to Australia’s population after arrivals and departures are counted. A higher figure generally means migration is adding more people overall. Governments use migration settings to influence population growth, while also deciding which workers and skills the economy needs.

The article gives the government’s target rather than a detailed formula. Tony Burke said the changes would reduce NOM to about 225,000 in 2027-28, down from 292,000. The proposed working holiday caps are one part of that broader effort to make migration “better targeted to the current needs of Australia”.

The debate shows the tension clearly. Federal policy seeks lower migration, but regional Queensland businesses say they need backpackers immediately. Hotels, tourism operators and agricultural employers fear shortages if fewer workers arrive or stay. Effective policy therefore has to weigh population growth against local labour demand and regional economic conditions.