Australia Cuts 38,000 Working Holiday Visas, Industry Warns

Australia Caps Working Holiday Visas from November

The Australian government is implementing a new ballot system for second and third-year Working Holiday Maker (WHM) visas, a change announced by Immigration Minister Tony Burke last week. This new policy, set to commence in November, will significantly reduce the number of available visas, with caps placed on subsequent year applications.

For 2026, second-year visas will be limited to 45,000 places, marking a reduction of over 21% compared to 2025 application approvals. Third-year visas will see an even steeper cut, capped at 5,000 places, an 80% decrease from the previous year. Overall, the new system will offer 38,000 fewer visa places than were granted in 2025.

Industry Expresses Outrage Over Policy Changes

Leading Australian industry bodies, including The Tourism & Transport Forum (TTF), National Farmers’ Federation (NFF), Accommodation Australia (AA), and the Australian Chamber of Commerce and Industry (ACCI), have jointly condemned the new visa policy.

In a collective statement, these groups expressed “outrage” at the changes, warning they risk “decimating industries already under immense pressure.” Accommodation Australia CEO James Goodwin described the policy as a “crushing blow” for the hotel sector, which depends on Working Holiday Makers to address critical workforce shortages nationwide. The industry estimates direct lost wages from these 38,000 fewer workers will amount to $1.86 billion.

Call for Consultation and Merit-Based System

Industry representatives have criticised the lack of consultation regarding a policy they expect to have significant consequences for their sectors. TTF CEO Margy Osmond stated that replacing certainty with a lottery risks removing the incentive for Working Holiday Makers to undertake regional work, which many businesses and communities rely on.

She added that implementing these changes from November gives businesses only weeks to prepare. The industry bodies are seeking urgent clarification on the ballot system's mechanics, including its start date and how places will be allocated. They advocate for transparent caps and a merit-based system for second and third-year visas, rather than a lottery.

Australia's Appeal to Asian Backpackers Affected

The new visa restrictions could reduce Australia's appeal to international backpackers, including those from key Asian markets such as Japan, South Korea, and Taiwan, who often seek working holiday opportunities.

Andrew McKellar, Chief Executive Officer of the Australian Chamber of Commerce and Industry (ACCI), noted that the third-year visa reduction effectively shortens the entire program by a third, leading to tens of thousands fewer workers annually.

The uncertainty introduced by a lottery system, combined with reduced visa numbers, may prompt potential Working Holiday Makers to consider competing destinations that offer greater certainty for extended stays and work. This shift could have lasting reputational and economic effects on Australia's visitor economy.