Australian Visa Options Expand, But Not for All

When Australian Prime Minister Scott Morrison travelled to the United Kingdom to attend the G-7+ meeting in mid-June, he was also there to put the finishing touches on a new Australia-U.K. free trade agreement. This was the first trade deal negotiated entirely by the United Kingdom since leaving the European Union, and the deal was more symbolic than substantial. After the U.K. joined the EU and Australia pivoted its economy toward Asia, the two countries had been drifting apart, economically at least, if not culturally. This trade deal is unlikely to alter that trajectory.

However, a provision within the new trade deal has already produced a significant effect, not for the balance sheets in London and Canberra, but potentially for those in the Pacific Islands. In a demonstration of how interconnected the world has become, Brexit seems to have now affected labor-market access to Australia for Pacific Islanders.

The new trade deal included a realignment of the Working Holiday Maker visa scheme (known as the “backpacker visa”) for young Brits. This is a visa that is afforded to those between the ages of 18 and 30 years old, mostly from European, North American, and East Asian countries, allowing them to work for a year in Australia. Citizens of Canada, France, and Ireland have an age limit of 35, and Brits will now have their age-bracket extended to align with these countries.

Facing severe labor shortages in the agricultural sector, in 2005 the Australian government came up with an innovative solution. Canberra decided to offer young people the chance to gain a second year-long visa if they first spent three months working in the agricultural industry in a rural area. Subsequently a third year-long visa was made available after a further six months of agricultural labor.

However, in the new Australia-U.K. trade deal, as well as having their age bracket expanded, the agricultural requirement for Brits will be dropped. This will allow British citizens a three-year working visa without conditions. As the British are the largest group who take advantage of the backpacker visa, this has sent a shockwave through Australia’s agricultural industry. The effect is estimated at the annual loss of 10,000 workers. The industry’s labor shortages have already been compounded by the border restrictions due to the COVID-19 pandemic.

This should have been an opportunity for Pacific Islanders. In recent years the Australian government has created two new visa categories – the Seasonal Worker Program and the Pacific Labor Scheme – aimed at attracting agricultural workers from Pacific Island countries. These have been limited, but incredibly successful visa programs.

Providing labor-market access to Pacific Islanders is the most effective – and least paternalistic – tool to enhance their livelihood. Pacific Island countries see the benefits of this in both remittances and skill-enhancement. In contrast to backpackers, these workers return each harvest season, better understand the requirements of the work, and because they are supporting families in their home countries ­– rather than just ticking a box ­­– are regarded as more committed and productive.

These schemes also enhance Australia’s foreign policy goals in the Pacific by lifting incomes, creating closer people-to-people links, keeping Pacific Island politicians happy, and offering something incredibly advantageous to the region that China simply cannot match. But the overall objectives of these visas have been hindered by regulatory burdens that make it easier to hire backpackers than Pacific Islanders.

However, rather than enhancing and expanding the programs aimed at Pacific workers to accommodate the loss of young Brits, the Australian government has instead created a new agricultural visa for Southeast Asians to offset these losses. The new visa will offer citizens from ASEAN countries the ability to work in Australia for nine months of the year for three years (returning to their home countries for three months each of these years).

This visa is clearly designed to enhance Australia’s standing in Southeast Asia, and solidify its relationship with ASEAN. However, this new visa sets up a competition between Australia’s foreign policy goals in Southeast Asia and its foreign policy goals in the Pacific. As the visa regulations now stand, it will be easier to hire workers from ASEAN countries than from the Pacific. With the visa conditions also creating a more committed workforce than backpackers, this new visa may become the preferred source of workers for the agricultural industry.

If this does become the trend, it will significantly undermine Australia’s “Pacific Step-Up,” the suite of policies that were designed to purposefully reengage in the Pacific due to increased Chinese influence. Were the Morrison government to truly be committed to Australia being a responsible member of the “Pacific family,” then affording Pacific Islanders greater labor-market access should be considered a priority.