Unions right to attack rorted backpacker visa scheme

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By Leith van Onselen

Farmers and tourism operators have hit back at the union movement for lobbying to restrict access to working holiday maker visas, claiming it would decimate regional economies. From The Daily Telegraph:

Government analysis reveals the Australian Council of Trade Unions push to scrap the second year of the program would send 36,000 backpackers who farmers desperately need for harvest packing.

Working holiday makers spend on average $10,000 — abandoning the second year option would rip $360 million from Australia’s tourism industry particularly in regional areas where backpackers are forced to work…

Senator Birmingham said Labor had once again proven it was beholden to its union masters…

Agriculture assistant minister Richard Colbeck said the Morrison government was committed to expanding the program unlike Labor…

Australian Chamber of Commerce tourism executive chair John Hart said backpackers were a vital source of tourism revenue particularly in the regions.

More from the Herald-Sun:

Tourism & Transport Forum chief executive Margy Osmond said Australia faced a “significant” skills shortage across a range of occupations and the sector was particularly crying out for skilled workers to help plug the gaps…

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Late last year, a group of academics – Joanna Howe, Alex Reilly, Stephen Clibborn, Diane van den Broek & Chris F Wright – jointly penned an article in Fairfax claiming that the exploitation of temporary migrant workers increased in the wake of visa reforms in 2005 which allowed backpackers to extend their visa for a second year:

Australia already has more backpackers, and relies more strongly on them for horticultural work, than any country. Since 2005, working holiday visa holders can extend their visa for a second year if they work for 88 days in a specified regional industry…

The visa extension makes backpackers dependent on employers – a recipe for exploitation. And it fails to oblige employers to protect against exploitation…

Fair Work Ombudsman report found that the 88-day requirement created a “cultural mindset amongst many employers” where they consider hiring backpackers wanting a visa extension “a licence to determine the status, conditions and remuneration levels of workers … without reference to Australian workplace laws”.

Unlike agricultural visas in New Zealand, Canada and the United States, and unlike Australia’s own Pacific seasonal worker program, there is no pre-approval of employers. Nor is there systematic ongoing regulation to ensure compliance with workplace laws…

Story after story after story have exposed exploitation on farms…

Several major studies have also found that backpackers are ripe for exploitation.

In 2016, the Fair Work Ombudsman undertook an inquiry into Australia’s backpacker visa scheme, which noted that “many backpackers are being subjected to underpayment or non-payment, unlawful deductions, sexual harassment, unsafe working conditions and other forms of exploitation”.

The Senate’s scathing report, entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, also documented the abuses of Australia’s Working Holiday Maker visas system, which was “consistently reported to suffer widespread exploitation in the Australian workforce”.

Whereas the 2017 National Temporary Migrant Work Survey found that one in every seven temporary migrant fruit and vegetable pickers were paid $5 an hour or less, and a third earned $10 an hour or less.

At present, there is no labour marking testing before farmers can hire a backpacker. Current backpacker visa arrangements also require no preference whatsoever for local workers.

Given the documented abuses, the unions are well justified in seeking to curb the abuse of the working holiday maker visa scheme.

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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.