The clause which compromises the UK free trade deal

When the United Kingdom voted to leave the European Union in July 2016 many raised concerns about the potential for the British economy to find itself compromised as the trade which brought mutual benefits between the UK and the rest of Europe would be set to slow down. 

Not to worry, with the British Government stressed, the benefits once brought by unrestricted trade between the United Kingdom and their immediate neighbours in Europe, such as Germany, France, Italy and Spain could be replaced by free trade deals set to be forged with the empire of old.  

Australia naturally found itself mentioned as one of such replacements for the massive economies of continental Europe, with work swiftly beginning on a free trade deal between with the UK. Thus, the Australia-United Kingdom Free Trade Agreement, or A-UKFTA, was unveiled in 2021, set to take effect sometime this year. 

The mutual benefits of such a Free Trade Agreement are more than obvious, the British economy is expected to grow by 0.02% over the next 15 yearskkm, whilst cost of living pressures will be eased in Australia. 

Unfortunately, any benefit A-UKFTA will bring to Australia could be killed by one significant caveat, which could negatively impact rural Australia, exacerbate inflation and drive-up youth unemployment, with the change in question being the revised conditions attached to Working Holiday Maker (WHM) Visas that British Citizens are eligible for. 

What specifically is changing? 

Presently backpackers from the United Kingdom up to the age of 30 are granted the ability to work in Australia for up to a year, renewable for a second if at least three months of dedicated work is undertaken in regional Australia and subsequently renewable for a third on the same condition.  

With the ratification of the A-UKFTA these restrictions are set to be removed within two years. Afterwards, British holidaymakers will be able to work in Australia for up to three years, with no obligation to spend any time in regional Australia. This will also coincide with an increase in the maximum age in which British citizens will be able to apply for WHM visas, rising from 30 to 35. 

What are the consequences of these changes for the regions? 

Whilst the United Kingdom is obviously not the only country from which our working holidaymakers originate, it is our largest source. The Trade & Investment Commission estimated over 35,000 WHM visas were granted to British holidaymakers in 2018-19, a number which one would anticipate is set to rise with the relaxing of the aforementioned restrictions. 

With such a large number of people no longer required to spend any time in regional Australia, it becomes hard to assume that many will take it upon themselves to travel inland and do regional work by choice, a concern echoed by Kennedy MP, Bob Katter

You only need to ask any young Australian from the cities if the idea of spending 3 months picking fruit in New England or Central Queensland sounds enticing... Even if you’re to assume any potential concerns about hours, pay or accommodation are rectified, it honestly just sounds boring. 

Whilst these concerns justify alternate schemes, such as the creation of a new visa for agricultural work and the expansion of the Pacific Australia Labour Mobility Scheme, there are two factors to consider. Firstly, the existing arrangements obligate visa holders to spend time in regional Australia, if a choice is offered, it can be turned down for reasons outlined above.  

Secondly, the United Kingdom is not only our largest source of Working Holidaymakers, but it’s a nation with a population greater than Oceania entirely. Is it not ridiculous to assume that the void created by the changes can be plugged by easing restrictions on nations a fraction the UK’s size? 

This mismatch could result in a situation where despite the governments best efforts to solve a problem it has created, the already dire labour shortages seen in the regions only persist. 

Why should Australians in the cities care? 

Should the supply of labour continue to shrink in regional Australia it should be expected that businesses will decrease their output, which holds the potential to further increase prices of products sourced from the regions, such as the bulk of our groceries. The relaxing of the regional working requirements could also see an increase in the demand for housing in Australia’s cities, especially at a time when there is a critical shortage of such, among other amenities. 

The rising cost of living (which encompasses grocery bills & rent) will only eat into the disposable income which otherwise drives the demand for hospitality & tourism. It should therefore be expected that employers in such industries will cut back their expenses, ultimately reducing the supply of casual and part-time jobs within our cities, pitting the interests of holidaymakers and young Australians against one another. 

Imagine for a moment you’re an honest employer, who are you likely to hire... The young Australian who can commit up to twenty-five hours a week as they seek to balance university & family commitments, or the holidaymaker who has fewer commitments and can work more hours. Alternatively imagine you’re a dishonest employer. Which of the two is more likely to take you to Fairwork?  

It goes without saying that Working Holidaymakers in Australia often find themselves the victims of exploitation, especially in the regions, however the need to solve this issue should not involve creating others. These concerns have been balanced before, The Australian Council of Trade Unions has previously raised concerns about both exploitation and the effect the visa structure has on Youth Unemployment. 

Questions that aren’t being asked 

There’s a large number of questions I present to the rationale behind these changes. Firstly, if we are to impose time limits, age caps and regional work requirements upon backpackers from other countries, for fears of igniting previously mentioned concerns, then why is the United Kingdom the exception?  

It’s obvious that business may stand to benefit, but apparent staff shortages in cafés and restaurants indicate that young Australians who depend on these entry-level jobs can find as much work that suits them, by extension this shifts their cost burden off their parents and Centrelink. Would a parent seriously prefer to have faster service at a restaurant, or for their children to find as much work as they need? 

Should the competition for jobs in industries such as hospitality & tourism increase it would be expected that holidaymakers, especially of non-English speaking backgrounds, will turn to more unconventional sources of work. Does this not exacerbate the risk of exploitation, or at the very least, further tarnish the reputation of the existing scheme? 

Whilst the above piece is purely speculative the fact that such changes have the potential to exacerbate the cost-of-living crisis we have before us in Australia should be enough to call them into review. The nations leadership must be weary of the gloomy economic outlook ahead and ensuring as many young Australians can find as much work as they need should be a priority, spurring more competition for said jobs is not the way to go about this.