Aussies warned price of groceries to go ‘through the roof’ under backpacker cuts
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Leading industry voices have warned Australians the price of groceries could rise under the federal government’s proposed cuts to backpackers.
The Albanese government this week announced it would essentially whittle the three-year working holidaymaker program down to two years and slash about 38,000 backpackers a year in a move that has raised concerns for the agricultural and tourism industries.
An employee feeds Boer goats at the Mulloon Creek Natural Farm in Bungendore, Australia, on Thursday, July 30, 2015. Australia's gross domestic product grew 2.3 percent in the first quarter from a year earlier. Photographer: Brendon Thorne/Bloomberg via Getty Images Bloomberg via Getty Images
Tourism and Transport Forum chief executive Margy Osmond warned the change would push backpackers to go elsewhere, removing an estimated $1 billion from the economy.
“When backpackers come here, they spend every cent they make here in Australia,” she told Today.
Osmond said that would trickle down to the average Australian through higher food costs.
“If you enjoy having a piece of toast in the morning for your brekkie, enjoy it now because the cost of a loaf of bread is going to go through the roof as an impact of this,” she told Today.
“The farmers are going to feel this extremely painfully.”
Victorian Farmers Federation president Ryan Milgate said the lack of consultation about the cuts has thrown the sector into disarray.
“We’ve had people that have got plane tickets booked, jobs ready to go, and then not getting their paperwork through,” he told Today.
“So, we’re actually going to hit the wall, and it’s going to hit pretty hard and really soon.”
Victorian Farmers Federation President Ryan Milgate 9News
Shadow resources minister Susan McDonald said the government’s plan “makes absolutely no sense”.
“A first-year backpacker arriving in Australia is useful,” she said.
“A second or third-year backpacker who already knows the country, has worked a harvest, understands Australian workplaces and may have relationships with regional employers is even more valuable.“
McDonald said dozens of regional employers she has spoken to are furious about the new arrangements and worried about their futures.
Workplace Relations Minister Amanda Rishworth was unable to answer whether any modelling was done to assess the impact of these changes on workers and wages.
“Backpackers are still going to be able to come to Australia, let’s be really clear about this,” she told ABC.
“There are programs such as PALM that are available to the agricultural sector that could be utilised more. And so I’d encourage people to explore the PALM program.”
PALM – the Pacific Australia Labour Mobility scheme – offers short-term, seasonal work to people from nine Pacfic countries and Timor-Leste.
Immigration Minister Tony Burke on Thursday announced that he would target backpackers, visa hoppers and overstayers under the government’s anticipated reforms to migration to combat pressure from One Nation and growing public sentiment.
Backpackers in the second and third years of their stay will be put in a ballot to control how many remain.
This would slash last year’s figures of 57,000 backpackers in year two to 45,000 people and 31,000 backpackers in year three to 5000.
Based on last year’s data, the government’s change would have removed about 38,000 backpackers from Australia.
There were a total of 206,187 backpackers in Australia as of June 2025, according to the latest government data.
The top five countries applying for the visa were from the United Kingdom, France, Ireland, Italy and South Korea.
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