Earlier quoted context omitted.
People have to eat food. Food in aggregate has one of the most inelastic demand curves imaginable. If the price rises because the production costs increase, people will still buy food. They might buy different food, and you'll see a decrease in acreage given over to labor-intensive crops, but that's just the free market at work.
The thing is, if farmers in Australia increase wages and thus their product becomes more expensive, the product on supermarket shelves will not become more expensive. Rather, supermarkets will import food from another country. Food is, with few exceptions, a commodity. The producer does not set the price of the commodity, the market does. I am telling this as an engineer working in the Canada's oil and gas sector. Si…
But imported products don't fly right into the country. There is customs, and denying/tariffing them is a policy that countries are very actively using. So at the end of the day, it's a political decision.
Edit: On the other hand, if you are exporting stuff (oil for Canada), then you can't really do that for the external market. Might explain why the government will let some sectors run with illegals (to remain competitive); the alternative being their ultimate demise.