The warnings come amid a growing backlash over Labor’s pause on working holiday maker visas from 24 countries and slowing of overall approvals.
Industry leaders say the moves risk gutting the $190bn-a-year tourism sector and slashing tax revenue collected from backpackers – alongside predictions the reforms will see as many as 40,000 family members of international students refused visas.
Despite alarm from some sectors over visa cuts, Mr Ruddock said drastic measures were needed to address issues in the immigration system. “Allowing a system to deteriorate in that way does not serve the interests of Australia and it troubles me enormously,” he told The Australian.
“A big part of (the problem) has been family reunion. I understand people want to have mum and dad with them in Australia … my view though was always that family reunions had to be closely managed. It’s a cohort that needs to be a very small proportion of the whole proportion of migrants.“
Albanese defends migration cuts amid tourism pushback
Anthony Albanese touted his government’s record on reducing immigration levels by 45 per cent since peaks after the Covid-19 pandemic, but said more needed to be done. “We’re responding to the national need,” the Prime Minister said at The Australian’s Bush Summit. “Something that we said well before – you know, there is a current spike in the support for One Nation, quite clearly – but (we) responded, we started lowering the numbers well before that occurred because we recognise that we want to get that right to assist the Australian economy.”
Ahead of the release of further details of the government’s final policy, industry leaders demanded carve-outs for vital visa classes, such as working holiday makers.
In a letter sent to Home Affairs Minister Tony Burke on Tuesday, seen by The Australian, the Transport and Tourism Forum pushed for working holiday-maker visas to be considered “separately from broader migration settings”, given the state of the embattled tourism sector and persistent worker shortages in the region.
“While TTF acknowledges the importance of maintaining program integrity, industry participants are concerned that constraints on working holiday-maker arrivals will have immediate and long-term unintended consequences for Australia’s tourism industry and regional economies,” said the letter, sent by TTF chief executive Margy Osmond.
Ms Osmond said Labor’s migration policy announcement would come as regional Australia and key sectors such as tourism and agriculture were still weathering the impact of the Iran War and “really don’t need another slap”. “At the very least, what we have to have from government is some clarity about what they’re doing, what it means and how long it’s going to go on for – and at the moment, we don’t know any of that,” Ms Osmond said. “It’s going to be a nightmare for workforce planning and it will be the uncertainty that will actually take us out of the market. I think it will be hard to minimise the damage that this will do and government will feel the impact as well because these working holiday-makers pay tax.”
Backpacker tax rates and visa cut impact
Introduced in 2017, the backpacker tax is now set at 15 per cent for working holiday-makers earning less than $45,000 and, for those above the threshold, $6750 plus 30 per cent for every dollar over $45,000. Those earning more than $135,000 face an upfront tax of $33,750 and must pay 37 per cent for every dollar over $135,000, while those earning more than $190,000 must pay $54,100 and 45 cents on every dollar above that threshold.
The government has also been urged to consider the economic effect of a drastic reduction in visas granted to international students and family members, which last year sat at 371,564 and 42,956 respectively. Department of Home Affairs data showed 2500 places granted in the “family stream” in the same year, which the department confirmed made up “28.4 per cent of the total 2024-25 migration program outcome”.
Universities Australia chief executive Luke Sheehy called for more clarity on Labor’s plans and modelling that made clear where money would be lost from the economy under the new policies.
Monash Business School professor Andrew Norton said focusing visa refusals on international students’ families alone would still lead to a dive in people overseas choosing to study in Australia, given it would mean years away from parents, spouses or children.
Mr Ruddock said the issue of family visas would divide MPs, depending on their electorate. “I suspect there are disagreements internally over the proportion of family reunion visas,” he said. “There would be some subtleties, for instance, if you represent an electorate in western (Sydney) suburbs where your vote may be enhanced by high family reunions visas being issued.”
The explosion in appeals under the Albanese government was also identified as a key concern, with some immigration experts arguing “Labor-aligned” appointments to the appeals tribunal was to blame.
However, former Immigration Department deputy secretary Abul Rizvi pointed out that a key driver was the 2022-23 boom in refusals of international students, who then appealed against decisions on whether they met the new “genuine student” test. While backing Labor’s intention in bringing down international student numbers, Mr Rizvi said the process in doing so had been “very poor”, due to the subjective “genuine” or “not genuine” threshold.
The Prime Minister signalled Labor was considering the number of appeals, recognising there were “a lot of people on temporary visas who change their visa categories or put in appeals and do that”.