Working holiday makers and Australia’s hospitality and horticulture industries

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Working holiday makers and Australia’s hospitality and horticulture industries

Posted 9/03/2012 by Janet Phillips

 Reciprocal working holiday arrangements in Australia have been in place for many years. Working holiday makers have traditionally played an important role in supplying short term workers for the tourism, hospitality and horticulture industries in both urban and regional settings.

The Department of Immigration and Citizenship (DIAC) acknowledges that the working holiday program is ‘a strong contributor of supplementary labour for industries needing short-term or seasonal workers, such as construction, hospitality and farming'. DIAC also anticipates that the number of working holiday makers and the demand for temporary entrants to address skill shortages will continue to grow. After falling in 2009–10 largely due to the Global Financial Crisis (GFC), visa grants are again on the rise with 192 900 Working Holiday (subclass 417) and Work and Holiday (subclass 462) granted to young people in 2010–11—many of whom subsequently found work in seasonal horticulture and tourism-related jobs that employers sometimes find hard to fill locally.

Working holiday visas

Under Australia’s working holiday arrangements, young people from certain countries aged 18 to 30 years may apply for one of two visas. Both visas enable the successful applicants to stay for 12 months and supplement the cost of their holiday with short term work:

  • Working Holiday (subclass 417) visa—for young people from countries such as the UK, Korea, Ireland, Germany and France. A second Working Holiday visa may also be granted if the applicant has completed three months of specified work in regional Australia during their holiday. There were 185 448 of these visas granted in 2010–11.
  • Work and Holiday (subclass 462) visa—for young people from certain other countries, such as the USA, Indonesia, Malaysia, Thailand and Chile. There were 7442 of these visas granted in 2010–11, mostly to young people from the USA. The latest country to be included under these arrangements is Argentina, allowing (university-educated) Australians and Argentines aged between 18 and 30 to work and holiday in either country for up to a year.
Under the Work and Holiday visa (subclass 462) there are additional requirements and most countries under this visa program have a limit on the number of visas issued per year. Applicants from outside the USA must have functional level English, tertiary qualifications and the support of their home government—in contrast the Working Holiday visa has no such requirements. It is also not possible to qualify for an additional visa by working in regional Australia—this option is only available under the Working Holiday visa.

Benefits of the working holiday program

Research completed by the National Institute of Labour Studies in 2009 showed that Australia derives considerable economic benefit from the Working Holiday Program. DIAC summarised the research and outlined the benefits in its publication, Population Flows 2010–11:

The research found that in 2007–08, the average working holiday maker spent $13 218 and earned $4756. When applied across the 134 000 working holiday makers who came to Australia in that year, this translated to expenditure of $1.78 billion and earnings of $0.64 billion—a net gain to the economy of $1.14 billion. After offsetting the jobs taken by WHMs, it is estimated that this expenditure created approximately 8500 fulltime jobs in 2007–08.
In a position paper released last month, the Australia Tourism Export Council (the Council) outlines how important working holiday makers are to Australia’s tourism sector and economy as a whole. This is particularly notable in major regional centres of Australia where tourism industries account for 37 per cent of total employment compared to 27 per cent for capital cities. The Council notes that:
  • working holiday makers are substantial purchasers of key tourism goods and services, such as cafes, restaurants, takeaway food services and retail trade which collectively account for 47 per cent of tourism output
  • the average trip expenditure of backpacker visitors is $5432, which is 60 per cent higher than the average expenditure for international tourists, and 
  • the WHM program has an important impact on attracting labour to regional areas, which helps to address the significant labour shortages that these areas experience. Most jobs for WHM program workers are in the accommodation and tourism sector, and 31 per cent of these are located in regional Australia.
The Council strongly recommends that the working holiday program be extended to further the benefits afforded to Australia’s economy. In particular, the Council calls for the Government to review some of the restrictions and allow regional tourism and hospitality work to qualify for the 12 month extension program for the second working holiday (417) visa. The Council also recommends broadening the number of source countries, lowering visa fees and allowing multiple visa applications for young people aged up to 35 in line with other countries.

Although the Australian Government has not committed to making any major changes to the working holiday program to date, in a recent publication, Trends in migration: Australia 2010–11, DIAC notes that ‘even in times of higher unemployment, migrants continue to make a large positive fiscal contribution’ and that migration continues to contribute to economic growth by ‘bringing people into Australia who are concentrated in the prime working ages of 25 to 44 years’. While these comments are primarily referring to permanent migrants and temporary business entrants, they are just as applicable to working holiday entrants.

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