Prime Minister Anthony Albanese has indicated that the Australian government is considering changes to the free trade agreement (FTA) with the United Kingdom that could require British working holidaymakers to spend time working in regional areas of Australia. This move comes amid objections from Queensland Labor members and regional small business owners concerned about a proposed reduction in working holidaymaker visas.
The current FTA, which took effect in 2023, allows British citizens on working holiday visas to stay in Australia for up to three years without meeting the regional work requirements imposed on backpackers from other countries. Albanese told parliament on Tuesday that he had raised the possibility of renegotiating parts of the agreement with UK counterpart Andy Burnham as a response to challenges faced by regional economies, which are reportedly struggling to fill job vacancies amid a surge in UK backpackers concentrated in metropolitan hospitality sectors such as Bondi Beach and Coogee.
Albanese acknowledged that the influx of UK workers primarily in urban areas has added to workforce pressures in regional towns. As part of broader migration reforms, the government plans to cap second-year working holiday visas at 45,000 in 2027, down from 57,000 issued in 2026. Third-year visa places will also be cut drastically from 31,000 to 5,000. These cuts have drawn criticism from regional representatives who warn of economic damage.
Michael Healy, a Cairns MP and former Queensland tourism minister, described the visa reductions as a “severe blow” to regional Australia. Citing firsthand experience running businesses in regional Queensland, Healy emphasized the critical role backpackers and skilled migrant workers play in sustaining local economies, particularly businesses such as pubs and restaurants. He expressed confusion and concern over the federal government’s decision to reduce worker numbers.
On the other hand, federal Cairns MP Matt Smith defended the government’s approach, noting that the current number of working holidaymakers in Australia is historically high. Smith recently led a delegation of tourism operators to Canberra to discuss the reforms.
Earlier in August, Albanese had assured that the government would not impose regional work requirements on British backpackers, affirming that the UK arrangement was separate and would be “honoured.” However, following discussions with north Queensland tourism operators, he indicated that policy adjustments involving the UK free trade agreement were being considered to address regional workforce shortages.
Queensland Labor leader Steven Miles also urged the prime minister to take into account the unique circumstances of Queensland’s tourism industry and agricultural sectors, which heavily rely on working holidaymakers. The government is reportedly engaging with stakeholders to balance visa reforms with the need to maintain labor supply in regional economies.