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Australia's Working Holiday Maker program: a quick guide



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ISSN 2203-5249

RESEARCH PAPER SERIES, 2016-17 UPDATED 22 NOVEMBER 2016

Australia’s Working Holiday Maker program: a quick guide Janet Phillips Social Policy Section

Under Australia’s Working Holiday Maker (WHM) program, young people (aged 18 to 30 years) from certain countries may apply for one of two visas—Working Holiday (subclass 417) or Work and Holiday (subclass 462). The visa available to applicants depends on their country of citizenship, but both visas enable young people to travel in Australia for extended periods and to support themselves during their stay with short-term employment in any industry. The program is usually reciprocal, allowing young Australians to travel and work under similar arrangements in partner countries.

This quick guide provides a brief overview of the program, sourced largely from the Department of Immigration and Border Protection’s WHM reports (published since 2011), fact sheets and historic departmental reports. This guide also includes the following detailed statistics on visa grants since the 1980s, compiled from various

departmental publications:

Table 1: Working Holiday (subclass 417) visa grants, 1982-83 to 2003-04

Table 2: Working Holiday (subclass 417) and Work and Holiday (subclass 462) visa grants, 2003-04 to 2015-16

Table 3: Working Holiday (subclass 417), first and second visa grants

Table 4: Working Holiday (subclass 417) visa grants by top countries of citizenship

Table 5: Work and Holiday (subclass 462) visa grants by top countries of citizenship

Working Holiday Maker program Working Holiday (subclass 417) The Working Holiday (subclass 417) visa is a temporary visa for young people who want to holiday and work in Australia for up to 12 months. Introduced in 1975, it was initially only available for young people from the United Kingdom (UK), Ireland and Canada. Between 1980 and 2006 the program expanded to include many other partner countries, such as Japan, South Korea, Hong Kong, Taiwan and several European nations. (A full list of partner countries and the year they joined is provided in departmental WHM reports.)

Today, the largest numbers of entrants under this visa subclass continue to come from the UK, followed by young people from Taiwan, Germany, South Korea and France. Since 2006, no further Working Holiday agreements have been entered into with any partner country—only subclass 462 Work and Holiday agreements that have more restrictive requirements (including visa caps).

Australia’s Working Holiday Maker program: a quick guide 2

During their 12 month stay, 417 visa holders can work as much or as little as they choose in full-time, part-time, casual, paid or voluntary work. However, the work is restricted to a period of six months with any single employer. (This period was extended from only three to six months in 2006.)

Permission to work longer than six months with a single employer is possible in certain circumstances, for example if the visa holder is:

• employed as an au pair (as of 21 July 2015) or

• employed in certain industries in Northern Australia, such as aged and disability care, agriculture, construction, mining and tourism and hospitality (as of 21 November 2015).

There are no caps on the number of Working Holiday visas issued and the number of grants has increased substantially (from just over 2,690 in 2005-06 to 41,339 in 2014-15) since the option of a second working holiday visa was introduced in November 2005. This option was initially only available to those who had been employed in seasonal agricultural work in regional Australia for three months.

The second Working Holiday visa is valid for a further 12 months. The six month restriction working with a single employer resets and applies again in the second year, although it is possible to return to the same employer from the previous year for another six months. In 2006 the option of a second visa became available to those working in any regional primary industry, such as mining. In February 2008 the option extended to people who had worked for three months in construction industries in regional areas.

Statistics on employer industry are not available for first visa grants under the WHM program, but they are available for the second Working Holiday visa grant. Since its introduction in 2005 the vast majority of second visas have been granted to those employed in agriculture (about 90 per cent), with the remaining in construction or mining work.

Work and Holiday (subclass 462) In 2003 the Howard Government began to develop a Work and Holiday (subclass 462) visa category with additional requirements for young people from countries that had not already entered into Working Holiday (subclass 417) partner agreements.

Since 2006 all new partner agreements have been negotiated under this category. Early signatories included Thailand, Chile, Turkey, the United States of America (USA), Indonesia and Malaysia. More recent additions to the program include China, Spain and Slovenia. (A full list of partner countries and the year they joined is provided in departmental WHM reports.) Other countries are currently negotiating agreements or have signed

agreements that have yet to come into effect—for example the agreement signed in 2011 with Papua New Guinea (PNG) that is not yet operative.

Under the Work and Holiday visa there are additional requirements (listed under the visa applicant tab). For example, applicants from outside the USA must have functional level English, tertiary qualifications and a letter of support from their home government (although applicants from China and Israel are exempt from providing a letter of support). All countries (excluding the USA) have caps on the number of visas available per year under this program (a full list of the different visa caps are provided in departmental WHM reports).

In the past only subclass 417 visa holders have been able to apply for a second visa by working in regional Australia. However, in June 2015 the Australian Government proposed some changes to this restriction as part of the Government’s initiatives to support Northern Australia. According to the department’s website, once the necessary legislative changes take effect, all Work and Holiday (subclass 462) visa recipients will be eligible to apply for a second visa if they work for three months (88 days) on their first visa in tourism, hospitality or agriculture in Northern Australia. The Government implemented this change through an amendment to the Migration Regulations registered on 1 November 2016, effective as of 19 November 2016.

In addition, as of 2015, both Working Holiday (subclass 417) and Work and Holiday (subclass 462) visa recipients are able to seek an extension for up to 12 months (not just six months) working with the same employer if they:

• work as au pairs (as of 21 July 2015) or

• work in Northern Australia (as of 21 November 2015) in aged and disability care; agriculture, forestry and fishing; construction; mining; or tourism and hospitality.

Australia’s Working Holiday Maker program: a quick guide 3

Current issues

Pathways to permanent residency The working holiday scheme is a temporary program for young people who want to holiday in Australia and the average length of stay in the past has been about eight months. However, the program is increasingly providing a pathway to further employment under other visa categories, such as the Temporary Work (Skilled) (subclass 457) visa, which may in time lead to permanent residency in Australia.

Recent rises in 457 visa applications and grants appear to be due to a significant rise in onshore applications, as many of these applicants are international students or working holiday makers already in the country. In a 2013 fact sheet on strengthening the integrity of the 457 program, the then Department of Immigration and

Citizenship acknowledged that many 457 visa applications came from onshore international students and working holiday makers.

The economic contribution of the WHM program and the ‘backpacker tax’ It is well established that WHM entrants make a significant contribution to the Australian economy. Any policy changes that could inadvertently reduce the number of temporary workers available under this scheme is of concern to many employers—as demonstrated in the response by stakeholders to this proposal and some of the submissions to the Senate Committee on Education and Employment’s temporary work inquiry.

In the 2015-16 Budget the Government announced a plan to change the tax status of working holiday makers from that of ‘resident’ to ‘non-resident’ from 1 July 2016. The proposed change would mean that working holiday makers are taxed at significantly higher rates. Since this announcement many stakeholders—particularly those in the agriculture and tourism sectors—have expressed concerns that the measure will significantly reduce the number of backpackers coming to Australia on working holiday visas and thus create labour shortages.

In March 2016 the Turnbull Government announced a review of the proposed tax arrangements; and on 17 May 2016 announced that, if re-elected, the Government would review the taxation of working holiday maker visas to ‘ensure our labour supply is adequate and Australia remains competitive globally’.

For developments and further background on this issue see the Parliamentary Library Bills Digest, Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 [and related Bills].

Exploitation and compliance The exploitation of some working holiday makers and other temporary migrant workers—particularly those from non-English speaking countries—has been a topic of public concern in recent years (see, for example, concerns expressed by the Fair Work Ombudsman). However, the intensity of public debate escalated after the ABC screened a Four Corners documentary in May 2015 titled ‘Slaving away: the dirty secrets behind Australia's fresh food’. The documentary alleged that working holiday makers (predominantly from Taiwan) employed in the agricultural sector were often underpaid, over-worked and forced to live in substandard accommodation. Some non-English-speaking women interviewed in the program reported being preyed on by employers or labour-hire contractors and made allegations of sexual harassment and sexual assault.

The Senate Standing Committee on Education and Employment’s 2015 inquiry, The impact of Australia’s temporary work visa programs on the Australian labour market and on the temporary work visa holders, also received evidence of exploitation of migrant workers on WHM visas and abuse of the WHM visa program by labour hire contractors and sub-contractors. The final report—A national disgrace: the exploitation of temporary work visa holders, released in March 2016—noted evidence provided to the Committee of ‘pervasive exploitation’ of WHM visa holders, particularly for workers from Taiwan, Hong Kong and South Korea with low English language proficiency.

Australia’s Working Holiday Maker program: a quick guide 4

Statistics Table 1: Working Holiday (subclass 417) visa grants, 1982-83 to 2003-04

Year Visa grants Year Visa grants

1982-83 979 1993-94 29 595

1983-84 8 096 1994-95 35 391

1984-85 10 400 1995-96 40 273

1985-86 13 622 1996-97 50 000

1986-87 22 413 1997-98 57 000

1987-88 36 428 1998-99 64 550

1988-89 45 136 1999-00 74 000

1989-90 41 538 2000-01 76 500

1990-01 39 923 2001-02 85 207

1991-92 25 873 2002-03 88 758

1992-93 25 557 2003-04 93 845

Sources: Immigration Department (there have been many departmental name changes over the years), annual reports, (various years); Joint Standing Committee on Migration, Working Holiday Makers: more than tourists, Canberra, August 1997, p. 19.

Table 2: Working Holiday (subclass 417) and Work and Holiday (subclass 462) visa grants, 2003-04 to 2015-16

Year Working Holiday grants Work and Holiday grants

2003-04 93 845 3

2004-05 104 353 257

2005-06 114 693 751

2006-07 134 993 1 812

2007-08 154 342 3 488

2008-09 187 907 6 409

2009-10 175 746 7 422

2010-11 185 480 7 442

2011-12 214 644 8 348

2012-13 249 231 9 017

2013-14 229 378 10 214

2014-15 214 830 11 982

2015-16 195 673 18 910

Sources: 2003-04 to 2004-05: Immigration Department, annual reports; 2005-06 to 2014-15: Department of Immigration and Border Protection, Working Holiday Maker program reports, (various years).

Australia’s Working Holiday Maker program: a quick guide 5

Table 3: Working Holiday (subclass 417), first and second visa grants

Year First visa grants Second visa grants

2005-06 111 996 2 690

2006-07 127 171 7 822

2007-08 142 516 11 826

2008-09 166 132 21 775

2009-10 150 431 25 315

2010-11 162 980 22 500

2011-12 184 143 30 501

2012-13 210 369 38 862

2013-14 183 428 45 950

2014-15 173 491 41 339

2015-16 159 409 36 264

Notes: visa recipients do not necessarily arrive in Australia in the same program year that the visa is issued; second visas may not be granted to recipients in the same year as the first visa grant; the option of a second Working Holiday visa was introduced on 1 November 2005.

Sources: 2005-06: Senate Legal and Constitutional Affairs Legislation Committee, Answers to Questions on Notice, Immigration and Citizenship Portfolio, Supplementary Budget Estimates 2010-11, Question 192, 19 October 2010; 2006-07 to 2014-15: Department of Immigration and Border Protection, Working Holiday Maker visa program reports, (various years).

Table 4: Working Holiday (subclass 417) visa grants by top countries of citizenship

Year

United Kingdom Taiwan Germany South Korea France Italy Japan

Hong Kong Ireland Canada

2009-10 36 995 10 175 20 860 34 863 18 158 5 481 8 079 3 722 14 790 8 209

2010-11 38 974 13 809 21 146 30 527 18 530 6 429 7 746 4 545 21 753 7 899

2011-12 41 712 22 393 22 499 32 591 20 086 9 600 9 162 7 512 25 827 7 929

2012-13 46 131 35 761 26 184 35 220 24 788 15 973 9 957 11 454 19 117 7 489

2013-14 45 208 29 366 26 819 26 893 25 734 16 045 10 579 11 667 11 996 7 174

2014-15 44 730 26 648 26 327 25 589 23 375 14 138 11 481 9 720 7 793 7 705

2015-16 42 175 22 157 25 980 22 025 21 527 11 591 12 304 6 309 6 743 7 632

Source: Department of Immigration and Border Protection, Working Holiday Maker visa program reports, (various years).

Australia’s Working Holiday Maker program: a quick guide 6

Table 5: Work and Holiday (subclass 462) visa grants by top countries of citizenship

Year USA China Chile Argentina Thailand Spain Indonesia

2009-10 6 149 N/A 446 N/A 471 N/A 100

2010-11 6 219 N/A 513 N/A 499 N/A 98

2011-12 6 831 N/A 639 261 346 N/A 99

2012-13 6 878 N/A 808 417 464 N/A 176

2013-14 7 499 N/A 1 004 500 471 N/A 437

2014-15 8 347 N/A 1 388 500 466 419 288

2015-16 8 669 5 000 1 500 700 500 504 776

Notes: • Some of the Work and Holiday agreements have not yet come into effect, such as the agreement signed with PNG in October 2011.

• N/A = no agreement in place in those years.

• Caps apply for most Work and Holiday visa grants. The respective caps for partner countries are: - USA: no cap (commenced 2007) - China: 5,000 (commenced 2015) - Chile: 1,500 (commenced 2006) - Indonesia: 1,000 (commenced 2009) - Argentina: 700 (commenced 2012) - Thailand, Greece, Israel, Spain: 500 (commencement details in the WHM reports cited below) - Uruguay, Poland, Portugal, Vietnam, Slovak Republic, Slovenia: 200 (commencement details in the WHM reports) - Bangladesh, PNG, Malaysia, Turkey: 100 (commencement details in the WHM reports).

Source: Department of Immigration and Border Protection, Working Holiday Maker visa program reports, (various years).

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