“The bigger issue with this kind of temporary labour scheme is the impact they have on Pacific economies. The number of people from Tonga in Australia, just on PALM visas, is equivalent to 9% of the Tongan working age population.”
By Alexia Adhikari
The Pacific Australia Labour Mobility scheme lures workers from Pacific Island Nations and Timor-Leste with promises of opportunity and money. Yet once workers arrive in Australia, they have to face the reality of poor working and living conditions. Tonga is home to one of the largest cohorts of Pacific Islanders who come to work in Australia on PALM visas.
Australia is offering temporary visas that come with limited rights and benefits and then calling it a ‘win-win’ for all involved. But what does Tonga lose when so many of its productive workers go overseas?
The PALM Scheme is large, and it is growing – fast. Since 2019, there has been a five-fold increase in the number of people from Pacific Island nations and Timor-Leste in Australia on just this one kind of temporary visa. There are no caps on the program, which means the Australian Government is willing to issue an unlimited number of these visas.
More than 38,000 PALM visa holders work at Australian farms, abattoirs, and aged-care homes. Australia is increasingly relying on them to work in essential, and lucrative, industries. Last year, the combined earnings from Australia’s agricultural production ($90 billion) and agricultural export ($75 billion) were worth more than $160 billion. This profit is built on the backs of PALM workers, who account for the equivalent of 10% of Australia’s agriculture workforce, and nearly a quarter (23%) of the meat processing workforce.
Australia’s meat processing and agriculture sectors have long been notorious for their poor working conditions, substandard accommodation, and low pay. This is why they have long struggled to attract Australian workers. Rather than improve pay and working conditions in these industries, the Australian Government has created special classes of visas that allow people to come to Australia, but only if they work in these industries. First it was ‘back packers’ – tourists who were only allowed to stay in Australia after a certain number of months if they worked in the places where farms are – and now it is people from Tonga, Timor-Leste, and other Pacific Island nations.
PALM workers don’t earn much by Australian standards. Hourly rates for the jobs temporary labourers commonly work in are low, and employers are allowed to make deductions for accommodation, food, and the cost of transport. All of this can leave people with very little in their pocket at the end of the week. In fact, PALM workers were earning so little that the Australian Government had to introduce a special law to make sure they weren’t left with less than $200 a week. And that’s if workers get paid properly in the first place – there have been many reports of underpayment. One employer in Queensland was fined more than $100,000 for underpaying workers from Pacific Island nations.
But the bigger issue with this kind of temporary labour scheme is the impact they have on Pacific economies. The number of people from Tonga in Australia, just on PALM visas, is equivalent to 9% of the Tongan working age population. This figure is 5% for Vanuatu, and 3.4% for Samoa. While these numbers may show the popularity of the scheme, they also suggested that it could be responsible for a decline in the GDP of nations across the Pacific.
GPD is affected by just three factors: population (how many people are part of a particular nation’s economy), productivity (how much is produced), and participation (how many people are work/are part of the labour force). A single percentage increase or decline in any one of these factors means an equivalent change in GDP. So a 1% reduction in the workforce means a 1% reduction in GDP. If 9% of Tonga’s working age population is in Australia on a PALM visa, that is 9% of people who aren’t participating in the Tongan economy. Is the money people contribute through remittances earned in Australia more than the money lost from not earning money, buying things, or paying taxes at home?
Recent figures show there are around 5,700 Tongans on PALM visas in Australia. This number is likely to grow because neither Tonga nor Australia have a cap on the number of people able to participate in the program. Tonga has the second-largest number of people on PALM visas in Australia (after Vanuatu). However, this represents a much larger share of Tonga’s population (9% for Tonga, while just 5% percent for Vanuatu). This means the program is likely to have a greater impact in Tonga, especially given that Tongans participate in other regional similar temporary work programs.
While people are allowed to travel to and from Australia while on a PALM visa, the cost of plane tickets means that not many people are able to do so. So Tongans on PALM visas are likely to be in Australia at the same time. That 9% gap is constant and likely to keep growing.
The PALM Scheme is just one of several similar temporary worker programs in Australia and New Zealand, so the cumulative effect of all these missing workers must be significant. Perhaps this is why leaders in nations like Samoa, Fiji, and Vanuatu have raised concerns about the impact these schemes are having on their own workforce numbers. The Samoan government has proposed an annual cap for these schemes, while Vanuatu is plugging its growing workforce gap with its own temporary work visa for foreigners.
Temporary labour programs like the PALM Scheme are touted as a ‘win-win’ because participants get to send home remittances and return home with savings, which in theory helps the domestic economies of Pacific Island nations.
But if the PALM scheme is going to contribute to a long-term, mutually beneficial relationship between Australia and Pacific Island nations, we need to be sure that the program isn’t doing more harm than good. This means that the People who come to work in Australia are treated with dignity and respect, and that they return home with enough money to make up for what they take away in their absence.
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Alexia Adhikari is a research fellow at The Australia Institute, an independent Australian think tank. She writes on issues of migration, and authored the report ‘The PALM scheme: Labour rights for our Pacific partners’
