Will the New Backpacker Initiatives Really Assist Growers?

As you may be aware, the Government has announced two new initiatives in relation to working visas in Australia.

UK Free-Trade Agreement

The first is part of a free trade agreement with the UK, which allows backpackers from the UK easier ways to stay in Australia and work for a period of up to three years. On face value this seems great for growers; more workers from the UK (and staying in the country longer) means more access to workers for growers, doesn’t it? Well, no, because as part of the deal they’ve scrapped the requirement for backpackers to work in regional areas on farms.

Boris Johnson, UK Prime Minister, said "It will be easier for British people, for young people, to go and work in Australia without having the tradition compulsion of having to go and work on a farm.”

There are a few numbers flying around about what impact this will have on growers, but none we will quote because they sound alarmist, but regardless, any reduction in workers right now is obviously a hit for farmers.

What the benefit of this agreement is to Australia in general is yet to be seen. More backpacker workers taking city jobs from local young people? Maybe expect an English accent when being served next time you’re in the pub.

Southeast Asian (ASEAN) Visas 

Luckily, in negotiating the UK Free-trade Agreement the National Party demanded an offset to the reduction in UK backpackers to assist growers, hence the announcement the day after the UK Free-trade Agreement of the seasonal agricultural workforce visa for citizens of Southeast Asian (ASEAN) countries.

This visa will allow citizens of ASEAN countries to come to Australia for up to nine months per year, returning home each year for at least three months, for up to three years.

The ASEAN countries (or states in some cases) are; Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Whilst there is no detail, and the devil is usually in the detail, this seems like a very significant development for the supply of farm workers.

Wages

One of the main drivers for workers taking up temporary visas from non-western countries is the increased capacity to earn money for themselves and their families.

Excluding Brunei, Malaysia, and Singapore (who have similar wages to Australia), the average hourly wage for the remaining ASEAN countries ranges from $2.63 to $7.12, averaging $5.27. This means there will be a very significant financial incentive in coming to Australia and working on farms.

Home Sickness

The requirement to return home every nine months may increase the cost of the whole exercise for the worker, however it would also significantly improve home sickness which is reportedly an issue for many visa workers under other programs.

Volume

The seven countries (with the lowest wages) most likely to come to Australia to take up the work are also very populous, with a combined population of ~525 million people. This is nine times the population of the UK which would indicate the program will more than offset the reduction in workers from the UK, and fingers crossed, fill the gap of the COVID-19 worker shortages.

Seasonal Worker Program

There is already debate about whether the ASEAN program will undermine the Seasonal Worker Program. This is hard to know without understanding the detail of the ASEAN program, and as stated before, the devil is always in the detail. However, if the ASEAN program comes without the restrictions of the Seasonal Worker Program, you could bet the ASEAN will put it to an end.

There are already calls for restrictions due to the fear of exploitation of workers, hopefully though, we develop mechanisms to punish those who break the existing rules, rather than punish everyone with restrictions on the new program.

We will be watching very closely and will report as new details are announced - watch this space.