Regional businesses alarmed as Australia limits working holiday visas

Around a normally lively Far North Queensland backpackers' hostel, an unusually sombre mood lingers in the air.

Irish backpacker Fionnghuala Ni Fheinne feels uncertain about her future in Australia after a shake-up of Australia's working holiday visa program.

"If I'd known about this sooner, I would have looked at a different route,"

she said.

Home Affairs Minister Tony Burke announced the changes to Australia's migration system last night, including introducing a ballot system for working holiday makers.

Among the changes, third-year working holiday visas would be limited to 5,000 backpackers each year.

The tourism and hospitality sectors in regional Queensland said the change would have devastating impacts.

Ms Ni Fheinne's shock was shared by others on working holiday visas in Cairns.

"It's a little bit scary," German backpacker Philip De Broux said.

Mr De Broux said the change may impact his hopes of a second year working in Australia.

"I love the country and I definitely want to stay here longer, but now it's more serious and there's more competition,"

he said.

"Now I know there are less places, which makes the competition even harder."

Peter McLeay is the owner of a Cairns backpackers hostel and a local restaurant. He said the announcement had thrown the business into chaos.

"To find out last night that a backpacker will have about a one-in-six chance of getting that third year after they do everything right is just devastating for us," he said.

"I've built this hostel business over the last 15 years … it's just basically my life's work up-ended overnight and I don't understand why."

He said he felt betrayed by the government's decision, with backpackers making up about 90 per cent of his staff.

"These are roles we just can't fill with Australians … we don't get Australians applying to be a hostel manager and [similar roles], so it's going to gut the entire hierarchy of the company," Mr McLeay said.

"Imagine, if in every friendship group, one person gets to stay out of about six [people], it's like an episode of Survivor or something,"

he said.

"It's just going to be horrible."

Other tourism businesses in Townsville shared the concerns.

Local resort chief executive Tim Richardson said it was hard to employ locals and working holiday makers filled a crucial part of the community's employment structure.

"Hospitality is tough by itself; we are very highly regulated and the hours aren't sexy for young employees anymore," he said.

Tourism Tropical North Queensland chief executive Mark Olsen said he was concerned the visa changes could make Australia less appealing for working holiday makers in general.

"We are seeing increasing cost pressures for Australia as a destination … compared to other destinations," he said.

"So to maintain our competitiveness … this is vital for us," he said.

Mr Olsen said the international workforce was a key part of the region's skill base and limiting their numbers would have devastating impacts for the tourism economy.

"Using working holiday makers as a solution to a housing crisis is a really blunt instrument,"

Mr Olsen said.

"We understand the capital cities are under pressure, but we would call on the federal government to reconsider.

"The downward pressure on second- and third-year numbers will impact the regions more than they impact the capital cities.

"These working holiday makers … play a vital role in our community. They put food on our tables; they're not taking the roofs off our heads."

Agriculture operations were also worried about what the visa changes meant for their industry.

David Groves, field manager at a tropical fruit farm north of Rockhampton, said focusing on backpackers would not solve the housing crisis.

"We don't really have a solution to the problem here, but we are creating some problems,"

Mr Groves said.

He said there would be a workforce shortfall.

"Obviously, we'll hire as many locals as we can, but it won't be enough to pick our entire crop and, if we can't get enough backpackers, that means fruit will fall on the ground and be wasted,"

Mr Groves said.

Backpacker Fionnghuala Ni Fheinne is considering other avenues that may allow her to continue working in Australia.

"I'm frantically searching to see if I should [apply for a skilled visa]," she said.

"I have a degree in education if I should go down the skilled visa route instead, but it's kind of leaving it very last minute for me.

"We do a lot for this country; we work very hard. There's a lot of doctors here. There's a lot of nurses that aren't Australian and I just found it very shocking, to be honest, and I'm hoping that they change their mind."