Australia’s migration cuts prompt economic warnings from businesses

Australia’s plan to reduce its annual migration intake from approximately 300,000 to 225,000 is expected to have a severe impact on the economy, with businesses warning of worsening worker shortages, increased wages, and price rises.The government aims to cut the annual intake to 245,000 by June 30, 2027, and further to 225,000 in the following 12 months. This reduction, particularly in temporary visas for international students and working holidaymakers, is raising concerns across various industries.Businesses, especially those in tourism, agriculture, hospitality, and construction, are bracing for significant challenges. Kahlia Colquhoun, who operates Cape York Camping, a holiday park and restaurant in northern Australia, stated that 80 percent of her 32 staff members are foreign workers. She fears that a lack of foreign workers could force her to shorten restaurant operating hours or introduce minimum two-night stays for guests.John Hart, head of the Restaurant & Catering Association, which represents over 57,000 cafes, restaurants, and caterers, warned that tighter migrant numbers would make it difficult for businesses to open, sustain operating hours, and maintain seating capacity. He emphasized that Australia lacks sufficient local labor supply to staff the growing industry.Wes Lambert, head of the Australian Restaurant & Cafe Association, noted that the industry currently has about 60,000 job vacancies, which could surge to 200,000 after the migration cuts, potentially driving up wages and consumer prices. He added that it would be challenging to find a hospitality business in Australia that does not rely on foreign workers.Home Affairs Minister Tony Burke told News24 on October 11 that migration cuts are necessary to address housing and population pressures. However, he acknowledged the need for balance, stating that being too stringent could harm the economy.The government’s plan includes limiting visas for international students, excluding those from Pacific and ASEAN member countries, and making it harder for students to switch visas to extend their stay and work rights. Working holidaymaker visas will also be curtailed, with fewer allowed to stay for a second or third year.Experts and industry groups say migrants help fill skills gaps and pay more tax, so deep cuts could hurt growth, raise debt and damage the economy.As of June 2025, over 213,000 Nepal-born residents lived in Australia, making the Nepali community one of the fastest-growing migrant groups. Changes in Australia’s migration policy could indirectly affect Nepali students and workers seeking opportunities in the country.The Australian government aims to reduce net overseas migration to 245,000 in 2026-27 and 225,000 annually from 2027-28. The opposition Liberal-National Coalition has pledged to cut net overseas migration to 100,000 a year during its first two years in government if elected in 2028.