Nic Maclellan



In the lead-up to the 2008 Pacific Islands Forum leaders’ meeting in Niue, Australia announced its Pacific Seasonal Worker Pilot Scheme (PSWPS).
Prime Minister Kevin Rudd pledged 2500 visas over three years for unskilled workers from Papua New Guinea, Tonga, Kiribati and Vanuatu to work in Australia’s horticulture industry.
Workers can travel to Australia for up to six months, picking fruit in orchards and vineyards.
The scheme is designed for employers to get a guaranteed labour force at peak harvest time, while workers earn high wages to send home remittances to family and community.
But the seasonal worker pilot is in trouble. Only 56 workers have arrived in Australia under the scheme so far—a sorry tally compared with the success of New Zealand’s seasonal work scheme.
More than 10,000 workers have arrived from six Pacific countries since the New Zealand Recognised Seasonal Employer (RSE) programme began in April 2007.
With New Zealand increasing the annual limit for Pacific seasonal workers from 5000 to 8000 workers, the 800 visas on offer each year from Australia look small by comparison.
As the Forum debates regional labour mobility, the evaluation of this initial pilot will provide evidence for a future decision on continuing the programme and whether other sectors—tourism, hospitality, construction or aged care—should be opened up for workers from the Pacific.
Demand driven programme
Australia always faced a more difficult challenge than New Zealand to open its labour market to unskilled workers from the region.
Australia’s horticulture industry is significantly different to New Zealand, with labour market regulation spread across federal, state and local authorities.
With a long history of Polynesian migration and experience of regional migration schemes (such as the Pacific Access Category), New Zealand employers were quick to seize the opportunity provided by RSE in early 2007.
In contrast, the August 2008 announcement of the Australian pilot left little time for the scheme to be in place before the peak summer harvest season, and came at a time of global recession.
One hundred visas were allocated in the first phase of the pilot, but only 50 workers from Tonga and six from Vanuatu arrived in early 2009 to pick fruit and nuts in Victoria and Queensland.
Phase Two of the pilot began in July 2009 and will run to June 2012, but after the initial 56 workers, no further workers arrived last year.
The lack of demand from Australian employers is causing concern in Canberra, even though the Australian government publicly stresses that jobs for Pacific workers “will depend on conditions in local labour markets in horticulture growing regions and growers’ willingness to trial the pilot.”
The lead agency for the pilot is the Department of Employment, Education and Workplace Relations (DEEWR) under Deputy Prime Minister Julia Gillard, though DEEWR officials work with other departments including Immigration and AusAID.
Asked when the next workers will arrive, a spokesperson for Gillard told ISLANDS BUSINESS: “The scheme was always designed to provide labour where no local labour was available. The timing of the next intake of Pacific seasonal workers is guided by growers and approved employers and the need to identify demand that cannot be met by local labour. As yet no growers have been able to demonstrate unmet demand.”
Backpackers flood labour market
Some Australian authorities blame the global recession, arguing that a high level of Australian and overseas labour is available because of the recent downturn in the mining sector and other industries (although New Zealand has managed to recruit over 4000 Pacific workers a year under its RSE programme, even during the recession).
Gillard’s spokesperson told ISLANDS BUSINESS: “Currently the horticulture industry is experiencing lower yielding crops due to seasonal influences and this, coupled with an increase in the availability of local labour, has meant the current demand for out-of-area labour has reduced.”
Horticulture Australia Council (HAC)—the peak body representing fruit growers—believes the current availability of labour for Australia’s horticulture sector will not last beyond the recession.
HAC Chief Executive Kris Newton says: “We genuinely believe this is a temporary situation. For the last 15 years, growers have been more and more desperate to find suitable labour, so the current situation is not normal.”
But there are broader structural shifts in the Australian economy. The Pacific seasonal worker pilot comes at a time when there has been increasing use of overseas temporary labour in place of permanent migrants.
There are more than 320,000 overseas students in Australia who can work up to 20 hours a week in term-time and full-time in semester breaks; 130,000 skilled workers under section 457 visas, and more than 190,000 people on visas granted through two working holiday programmes.
Most working holiday-makers come to Australia for the beach and nightlife rather than work.
But backpackers can extend their stay by working in fruit picking or other sectors in regional Australia.
Under the “Working Holiday” visa programme (subclass 417), backpackers who have worked in horticulture or other specified industries for a minimum of three months are eligible to apply for a second visa, granting them a further year’s stay in Australia.
A separate “Work and Holiday” visa programme (subclass 462), allows young people from Chile, Indonesia, Malaysia, Thailand, Turkey and the United States to travel and work for up to 12 months in Australia, supplementing the cost of their holiday through casual employment.
According to government figures, the number of people granted visas under this “Work and Holiday” programme jumped 87 percent in 2008-09, to 6,407 visas. Overall, the number of s417 and s462 working holiday visas jumped 23 percent in 2008-09, from 154,574 to 194,103.
Beyond these legal schemes, a number of employers in Australia continue to hire overseas workers illegally.
Recent media exposes have highlighted the use of undocumented Asian and Pacific workers in the horticulture industry, as growers use low paid overseas workers to undercut wages and conditions.
HAC’s Newton argues that a key reason Australian growers have been reluctant to take on Pacific workers has been the increase in the number of backpackers from Europe, Asia and North America, who have flooded into Australia because of current unemployment and recession in the northern hemisphere.
After Britons, South Koreans make up the second largest group in the “Working Holiday” programme with 39,506 visas in 2008-09.
Indonesia and Malaysia only joined the “Work and Holiday” programme in 2009, at the same time as Australian government extended the number of temporary workers who could come from Thailand.
Growers suggest that many “holiday-makers” from Asia have come to work rather than party, and this is pricing Pacific seasonal workers out of the market.
Labour hire companies
Under New Zealand’s RSE scheme, growers act as the direct employer of the overseas workers.
In Australia, a different model has been adopted with labour hire companies acting as the employer, and then contracting out workers to the growers at local level.
The government has recently called for expressions of interest from other companies to recruit labour from the Pacific, beyond the existing approved labour hire firms: Abel Solutions, All Recruiting Services and Madec Labour Hire.
At a time of drought and tight credit, most growers are reluctant to pay extra to get Pacific workers through the labour hire firms.
Few employers seem willing to pay the extra premium required to cover the travel and administration costs of bringing in temporary workers from the Pacific, especially from Kiribati.
This resistance on costs comes at a time of widespread debate over the industrial award covering the horticulture sector, with growers lobbying government against the need to pay penalty rates on weekends and meet other minimum conditions.
Newton wonders whether this labour hire system is the best model for recruitment and employment: “We would welcome a more industry-driven model, by industry and for industry, based on local co-operatives or councils of growers, with regional co-ordinators who can develop a local calendar of harvest needs and who know about options for alternative employment.”
There’s a lot of blame passing for the current delays in recruiting from the Pacific.
Government officials privately state that growers exaggerated the demand for overseas labour, while some growers have been critical of the level of regulation from Canberra, even though officials have reduced limits placed on the scheme in an attempt to draw in new employers. (DEEWR has removed the initial restriction that growers from only three regions could recruit under the pilot, so now growers from all over the country with proven demand for labour are eligible to employ Pacific workers). This shift to industry deregulation creates new problems for unions and community organisations.
The pilot has a series of regulations to ensure that core conditions are maintained (on wages, housing and health and safety laws), but losing these could threaten labour rights, given the imbalance between the power of the host employer and the overseas worker.
Papua New Guinea
A further problem is that Australia has diplomatic relations with other countries that would like to join the scheme. Timor-Leste and Solomon Islands lobbied unsuccessfully to be included in the pilot, though Honiara has won the right to join the New Zealand RSE scheme.
By the end of 2009, only three of the four initial countries chosen for the Australian pilot have signed official Memoranda of Understanding (MOU) to get the scheme underway.
In November 2008, agreements were quickly finalised with three of the four countries involved (Kiribati, Tonga and Vanuatu), because these governments were already participating in New Zealand’s RSE scheme and had systems in place for the recruitment of workers.
Developing an MOU with Papua New Guinea has taken much longer. Australia’s northern neighbour has a larger range of players at national and provincial level that must be consulted and involved, and there are problems balancing efficiency and equity in recruitment in a country of 6.7 million people.
The pilot scheme also has some critics in Papua New Guinea, who argue it has little to contribute to PNG’s development.
In early 2009, Morobe Provincial Governor Luther Wenge encouraged PNG workers to stay at home and develop their skills, arguing: “The seasonal workers scheme is a stupid idea and you are making yourself look inferior.”
In spite of this, a draft MOU with Papua New Guinea has been finalised and is currently being considered by the PNG government.
Labour mobility and trade
in services
Another reason for the slow start to the Australian seasonal workers pilot is the way labour mobility is entangled with negotiation of the PACER-Plus regional free trade agreement.
Greater labour market access has become a bargaining chip in regional trade talks.
Under PICTA, Forum islands countries are proposing a two-tier labour mobility program within the islands region.
Dubbed “Temporary Movement of Natural Persons”, islands governments are studying proposals for free movement of professional workers and quotas for unskilled workers.
But labour mobility is also part of PACER-Plus, being negotiated by Australia, New Zealand and Forum Islands countries.
A spokesperson for Gillard notes: “At a meeting of Pacific Islands Forum Trade Ministers, held in October 2009, there was agreement that regional labour mobility would be one of the priority issues for the negotiations.
However, detailed discussions on possible PACER Plus provisions have yet to commence.”
Islands officials insist that increased labour mobility is integral to any trade deal. Pacific governments hope remittances from offshore workers will help to compensate for revenue lost as import tariffs are removed under PACER-Plus and overseas employment can replace jobs shed by industries that are currently subsidised or protected. But there is a central tension in expectations between different players in Australia and the islands.
Gillard has stressed that “labour mobility programs are demand driven and complement the conditions in the Australian labour market.”
If programmes for unskilled workers from the Pacific are “demand driven”, greater access will only be provided when there are shortages of Australian workers in key industries.
This principle clashes with the expectation in the Pacific that there should be quotas in any agreement to lock in numbers of workers to be recruited, so that labour mobility is not restricted in times of recession or political dispute.
The debate on regional labour mobility has some way to go. But without a surge in offers from growers in coming months, the Australian pilot will be hard pressed to meet the target of 2,500 places.
The Australian government has commissioned a two-part interim evaluation of the pilot scheme, with TNS Social Research studying the domestic impacts of the programme and the World Bank evaluating the overseas development outcomes.
But as one grower wryly noted: “Those 50 Tongan workers are the most evaluated fruit pickers I’ve ever seen!”
Horticulture Australia Council CEO Newton is more hopeful in the longer term: “If New Zealand can take 10,000 workers over time, we can take at least that many.”