Spirit of the Coolie: Qantas lands cheap foreign pilots

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By Leith van Onselen

Yesterday, it was revealed that Qantas had secured a special migration deal with the federal government to bring in foreign pilots:

The labour agreement granted last month allows the airline’s regional arm, QantasLink, to bring 76 pilots and instructors into the country for up to four years, avoiding new two-year restrictions that block permanent residency.

…the airline has struggled to recruit enough instructors and believes two-year visa restrictions on overseas pilots, which came into full effect in March, are globally uncompetitive.

The labour agreement will allow it to bring in overseas pilot instructors, as well as pilots for low-level propeller aircraft, with the intake to be renegotiated after the first year.

While their visa stay will be limited to four years, the workers will be cleared for a pathway to permanent residency after that period…

Other companies granted labour agreements this year include Inpex Australia, which runs the Ichthys LNG project, beef exporter Teys Australia and Sydney harbour fine-dining restaurant Aqua Dining.

Australian and International Pilots Association president, Murray Butt, slammed the deal, claiming it was using the carrot of permanent residency to undercut local workers:

 “Qantas should not have been granted a special deal to hire foreign pilots, before properly testing the labour market,” Captain Butt said.

“If there is a real pilot shortage of Australian applicants and AIPA seriously doubts that is the case, it has come about because aviation employers have sat on their hands and done nothing to address the impending supply side problem.

“Collectively, they have made aviation a relatively unattractive career.”

He said it was AIPA’s view, the deal to recruit foreign pilots for four years was “little more than a smoke screen to keep pilot salaries as low as possible”.

“Our biggest concern is they’re trying to subsidise low wages with Australian residency, and we shouldn’t be trying to sell off Australian residency,” Capt Butt said.

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“The airline is offering prospective recruits salaries as low as $65,000 a year after candidates have spent as much as $150,000 each to complete their training,” [Murray Butt] said.

It’s hard to fathom why Qantas has been allowed to recruit ‘temporary’ foreign pilots on four year terms, rather than the standard two, as well as provide them a pathway to permanent residency. Surely if Qantas offer high enough wages, they would attract all the pilots they need.

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This is, after all, precisely how the labour “market” is supposed to work. Whenever there is a ‘shortage’ of anything, the price (in this case wages) is supposed to lift until the shortage is met through increased supply.

But by the government offering the carrot of permanent residency, Qantas can avoid paying higher wages as permanent residency effectively becomes a form of payment. This, in turn, pushes down wages for incumbent Australian pilots that compete with the foreign labour.

For a nation supposedly so concerned about near record low wages growth, the government sure is doing its darndest to stop wages from rising by enabling employers to bypass Australian workers and recruit labour on the cheap globally.

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So-called “labour shortages” are good and are the very solution to the low wages growth afflicting Australia.

The incessant warnings of “skills shortages” by the various business lobbies are really code for “we want to pay workers less” by employing foreign workers.

Australia should not fall for their ruse, in the process shifting the nation’s bounty even further away from workers to corporations.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.