As we recently wrote about, backpackers in Australia have been facing a whole new set of challenges since the emergence of COVID-19. The spread of the virus among the backpacking community has led to several disparaging news headlines about them, which in turn has made it harder for them to find employment. Now, many working holiday makers are running out of money quickly with no prospective jobs in sight.
Not to mention, with borders around the globe being locked down, several backpackers don’t even have the option to fly back home. Either flights are way too expensive to afford or borders are closed down entirely with no exceptions for repatriation. With very little government support other than the recent changes to superannuation, backpackers in Australia are quickly running out of time and money.
What’s at risk for Australia?
The Australian Government is risking alienating their backpacker population. If this group isn’t supported now, there could be very negative economic impacts.
According to Tourism Australia, in 2016 working-holiday visa holders from the UK, South Korea, and Germany generated A$3.4 billion in revenue, this group only accounted for 59% of the total working holiday visa population.
Moreover, Australia’s agriculture industry is currency valued at A$48 billion, and about one-third of peak seasonal farming jobs are usually filled by overseas workers. According to a recent Bloomberg post, backpackers are battling for farm work with Australia’s new jobless, as industry groups say there’s anecdotal evidence of a surge in demand for farm work from locals.
While these jobs are currently being filled by Australians, after this pandemic passes, these people will likely go back to their former jobs and farmers will once again have to rely on backpackers. However, if backpackers aren’t taken care of right now, their willingness to return to Australia in the future may waver. There’s precedent for this too.
In the early 2010s, the government tried to levy a 32.5% tax on backpackers making less than $18,200 annually, traditionally a tax-free threshold. Although this policy was eventually scrapped, its effects were still felt as working holiday applications dropped by 5% in the fiscal year subsequent to the announcement of the tax.
Thus far, the rhetoric from Prime Minister Scott Morrison has been the same, it’s Australia first: “Australia must focus on its citizens and its residents to ensure that we can maximize the economic supports that we have.” For those who can’t afford to stay, he says “there is the alternative for them to return to their home countries”.
However, he fails to realize that many simply cannot return home, and if they aren’t helped soon, the Australian economy may be the thing that suffers long term.