Backpacker Numbers Continue to Spiral as WHM Applications Decline

New figures have shown that the number of backpackers coming to Australia is continuing to dwindle, with visa applications declining by almost 5000 during the 2016-2017 period.

The slowdown in applications follows the government’s decision to introduce a new tax rate of 15% for Work Holiday Maker (WHM) visa holders, which is prompting potential travellers to revaluate their choice of destination.

The Agricultural Industry—which relies on WHM workers as a cheap source of labour—has expressed fears that the government’s original proposed tax rate of 32.5% would deter travellers, leading to an intense parliamentary debate that spanned the better part of last year.

However, this fear may still come to pass as WHM application numbers continue to dwindle, with many experts saying that foreign nationals have been put off Australia by what they see as the politicised and unstable nature of our migration system.

New figures obtained by the Department of Immigration show that only 98,317 applications for 417 and 462 visas have been made been between January and June this year. This represents a decline of 1752 applications when compared to the same period during 2016.

Applications being made for a second-year extension to the 417 visa have also dropped by 479 compared to last year. While the level of second-year renewals being granted for the 462 visa did not experience a similar decline over the previous twelve months—as the option to extend your stay was only introduced in November last year—the number was significantly lower than expected, with only 670 foreign nationals applying.

Overall, there were 214,979 WHM visa applications lodged by foreign nationals during the 2016-17 period, representing a significant decline from 231,390 in 2014-15.

According to the president of the Victorian Farmers Federation (VFF), Emma Germano, the decline in WHM applications is largely the result of the government’s decision to proceed with the introduction of its 15% backpacker tax. She also added that there “was no question” over whether there had been fewer backpackers around this year to assist with the northern Victoria fruit harvest.

“I’m glad we only have to speculate as to what the outcome may have been if the tax rate had been at 32.5 per cent,” Germano said.

In response, the Minister for Agriculture, Barnaby Joyce, has claimed that the figures show that Australia has been able to slow the drop off in applications from the previous year—citing a decline of only 5000 applicants, compared to 11,000 lost during the 2014-2015 period—as well as attributing the slowdown to other factors, including economic conditions and the local exchange rate.

As a replacement for the dwindling international workforce, Joyce pointed to the pre-existing Seasonal Worker Program, as well as the government’s newly launched initiative, the Seasonal Work Incentive trial, which is intended to encourage more local Australians to take on agricultural work.

The new program will allow participating jobseekers to earn up to $5000 while still being eligible to claim Newstart payments if they choose to take on employment in the rural farming industry.

“This program allows Pacific seasonal workers to return each year, providing an increasingly experienced source of supplementary farm labour,” Joyce said.

However, the president of the National Farmers Federation (NFF), Tony Mahar, disputed this claim, saying that the decline in applications represents an ongoing downward trend, which could eventually affect farmers profitability and productivity levels during the harvest season.

Mahar has called on the government to create a dedicated agricultural workers visa as a means of addressing this problematic issue.

“Until such time that appropriate measures are put in place to ensure farmers have reasonable access to labour, such as a dedicated visa to support farm labour needs, it is important that measures are in place to ensure backpackers continue to see Australia as an attractive place to holiday and work,” Mahar said.

The CEO of Absolute Immigration, Jamie Lingham, disputed the impact of the backpacker tax on WHM numbers, instead attributing the decline to ongoing employer worker exploitation and the lack of a pathway to permanent residency.

“The working holiday maker program has been great for the agricultural industry, but our view is that there are two main deterrents responsible for the reduced numbers coming to Australia.Both the lack of a pathway to a permanent visa, and the media’s constant stories of illegal exploitation are acting as a serious disincentive to potential WHM visa applicants. As a parent, I know that I would be reluctant to send my child to a foreign country where there is a reputation for exploiting young backpackers,” Lingham said.

“Our experience is that the backpacker tax was a long, drawn-out process that has very little correlation to dwindling numbers in the agricultural sector. When we spoke with a number of backpackers, they advised us that their main motivation for coming to Australia was not for the money, but rather for the lifestyle and experience.”

“The tax may have had an impact on those who did not bring a lot of savings to spend in Australia and then found it impossible to travel, work and live a high-level lifestyle. Although, in most cases backpacking does not typically equate to five-star accommodation,” he said.

If you have any questions or would like us to assist with your global immigration queries, please contact one of our Registered Migration Agents on 1300 ABSOLUTE (1300 227 658).

Jamie Lingham

Chief Executive Officer

MARN 0108123