Pearls and Irritations

The new Pacific Engagement Visa (PEV) has more similarities to a humanitarian visa than a labour supplementation visa – at 3,000 permanent resident places per annum, it could be Australia’s first climate change humanitarian visa.

Establishment of this visa is based on an Election commitment to provide a pathway to permanent residence for workers brought to Australia under the temporary resident Pacific Australia Labour Mobility (PALM) Scheme. Both the Coalition and Labor promised a pathway to permanent residence for guest workers brought to work on farms, including for those on the Coalition’s Agriculture Visa for nationals of South-East Asian nations which Labor proposes to abolish other than for a small number from Vietnam.

What portion of PALM Scheme workers the 3,000 permanent residence places represents will depend on how large the PALM Scheme becomes. Farmers will require ongoing replenishment of PALM Scheme workers as those who secure permanent residence are unlikely to continue doing farm labouring work. Indeed, the Government has assumed this.

The PALM Scheme itself has been allocated an additional $67.5 million over four years in the October 2022 Budget. That is on top of substantial past funding provided for this Scheme and its predecessors although little of that funding has gone to where it’s really needed. That would be to the Fair Work Ombudsman to address worker exploitation and the Department of Home Affairs to process asylum applications from these workers.

From November 2019 to September 2022, almost 5,000 Pacific Island nationals applied for asylum. The vast majority are being refused but few have been removed from Australia either voluntarily or involuntarily. They mostly become undocumented workers who must live and work in the shadows of society.

Source: DHA Monthly Asylum Report and AAT

The Government will be hoping that providing PALM Scheme workers with a pathway to permanent residence via the PEV reduces the rate at which they are running away from their employers and applying for asylum. The risk is that more PALM Scheme workers will have to remain longer with employers who are exploiting and abusing them until they secure permanent residence.

Farm lobby groups will argue for a lengthy period on a PALM visa before they can apply for a PEV to maximise farm labour supply, possibly a number of years. The workers will argue for as short a period as possible.

It is notable the ANU Development Policy Centre, which is funded by the Department of Foreign Affairs and Trade (DFAT) to defend the PALM Scheme, heavily criticised the former policy of encouraging (not requiring) Working Holiday Makers to work on farms for three months because this risked these workers being exploited. There is zero chance farm lobby groups will agree to only three months on a PALM visa before a worker becomes eligible for a PEV.

The PALM Scheme is based on the erroneous view that poor people from poor countries will happily work long-term doing back breaking work for exploitatively low pay and appalling conditions. Work that Australians won’t do. This is not just wrong but appallingly racist. It is an attitude DFAT may have inherited from its 18^th and 19^th century predecessors in the British Foreign and Commonwealth Office.

Establishment of the PEV is a less than perfect attempt to right this wrong.

What do we know of the PEV?

Very few details of the new PEV are available although $175.1 million over four years has been allocated in the October Budget. Once fully operational in 2025-26, the Government expects the PEV to cost $83.9 million per annum offset by $35 million per annum in tax revenue, most likely income tax and GST. This is unlike skill stream visas where the Government budgets for a substantial net revenue gain. From a budget perspective, the PEV is more akin to a humanitarian visa and hence may eventually represent Australia’s first climate change humanitarian visa.

$3 million has been allocated to the Department of Home Affairs (DHA) in 2022-23 for the PEV. These funds are likely for developing policy, regulations and systems for the new visa suggesting the PEV is highly unlikely to start before 1 July 2023.

Outyear funding for this visa for DHA gradually rises until $17.4 million is allocated in 2025-26. It is unlikely all $17.4 million is for visa processing as the PEV will be a very simple visa to process (essentially a visa lottery) with applicants having been in Australia a number of years.

It is likely the balance of the $17.4 million is for adult English training and settlement services. This is sensible but it would be better if the adult English training was delivered before PALM Scheme workers arrive in Australia – that would help reduce occupational health and safety issues and help the workers better argue for their rights. The other settlement services would be better targeted at the PALM visa stage rather than at the PEV stage.

DFAT receives $1.7 million in 2022-23 for the PEV and $3.3 million per annum ongoing. This is quite mysterious. Apart from an initial role in explaining the visa to Pacific Island governments, it is difficult to see what role DFAT will have in the PEV that it isn’t already funded to deliver through its allocation for the PALM Scheme. That would include explaining the PEV to PALM visa recipients to encourage them not to run away from their employers and not to apply for asylum. Perhaps there is more funding for the ANU Policy Development Centre to help defend the policy?

The Department of Employment and Workplace Relations (DEWR) receives $1.5 million in 2022-23 and $0.3 million in 2023-24. This may relate to DEWR’s input to consultation with employers and unions into design of the PEV.

The Department of Education receives $34 million over four years and $16 million ongoing. This may be the costs of school education for the children who get a PEV as well as TAFE/University education for adults. This is a sensible spend although once again it would be better if training of adults was provided before they arrive or from time of arrival and not years later.

The Department of Social Services receives $57.9 million over four years and $33.6 million per annum ongoing. This suggests that unlike most migrants in the Migration Program, PEV holders will not be subject to the four-year wait for social security but have access to it almost immediately they receive their PEV.

This makes the PEV more akin to a humanitarian visa than a labour supplementation visa.

By end 2025-26 there would be around 9,000 PEV holders in Australia of whom we could assume around two thirds are adults (ie 6,000). Some would be partners of the main applicant but assuming those that receive Job Seeker are all single adults and receiving the single payment of $17,378 per annum gives 5,754 PEV holders on Job Seeker. The number would be smaller than this as some would receive payments as a couple and/or additional payments as they have children.

Nevertheless, it seems the Government is assuming a very large portion of PALM Scheme visa holders would quickly move from their farm jobs and onto Job Seeker once they receive their PEV. This would be a very poor outcome for a labour force supplementation visa.

A further $15.5 million over four years is allocated to the Department of Health and Ageing presumably to provide PEV holders with access to Medicare. This is sensible given the dangerous nature of farm work and the very high death rate of PALM visa holders. But once onto the PEV stage, the Government is assuming most of these people will have left farm work!

It is surprising no additional funding has been provided to the Fair Work Ombudsman or for a formal role for unions to reduce exploitation of PEV holders. DFAT continues to be in denial about the exploitation risk.

But what is most needed is a skills development approach to PALM/PEV visas to ensure these workers have access to better long-term jobs, particularly in regional Australia. This would require DFAT and farm lobby groups to move away from their assumption that PALM/PEV holders are only capable of doing low skill, low pay work.

It would give these workers a much better future in Australia. There would also be merit in describing the PEV as Australia’s first climate change humanitarian visa as that is a much better policy rationale for the visa.

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