Australia caps second- and third-year backpacker visa extensions, boosting PALM labor pool

In a recent speech, the Minister for Home Affairs disclosed that second-year backpacker visa extensions linked to regional work will be capped at 45,000 places and third-year extensions at 5,000, both to be allocated by lottery and excluding UK citizens. This represents a 44 % drop from the numbers issued in 2025-26 and aligns with Labor’s 2023 migration review that recommended scrapping the extensions. Farmers, who depend heavily on backpackers for agricultural labor, could see the backpacker workforce shrink by as many as 18,300 workers, based on the lower of two industry estimates.

The shortfall is expected to be partly filled by PALM scheme participants, whose seasonal and long-term numbers have steadied around 16,000 and 3,300 respectively. The reforms also aim to address exploitation concerns highlighted in earlier investigations. However, the exact mechanics of the lottery and its durability under future governments remain uncertain.