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Education and Employment References Committee
Australia's temporary work visa programs

SMEDLEY, Mr Brian, Chief Executive, South Australian Wine Industry Association

Committee met at 08:58

CHAIR ( Senator Lines ): The committee will now commence its inquiry into the impact of Australia's temporary work visa program on the Australian labour market and on temporary work visa holders. I welcome Mr Brian Smedley from the South Australian Wine Industry Association. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I now invite you to make a short opening statement. At the conclusion of your remarks I will invite members of the committee to put questions to you.

Mr Smedley : Just by starting with my opening statement, South Australia has a special place in the Australian wine industry. It provides the dominant share of national grape and wine production at 48 per cent, exports 60 per cent of what it produces, and the hectares planted to vines cover about 48 per cent of the Australian viticultural area. South Australia has over-representation of wine regions that have a strong domestic and international market awareness and quality reputations, particularly the Barossa, McLaren Vale and Coonawarra. South Australian wine exports contributed about $1.2 billion to the state economy and South Australian wine is exported to over 100 countries, with the major markets being the UK, United States of America, Canada and China.

According to the census of 2011, South Australia dominates direct employment in both grape growing, with 2,983 persons so employed, and winemaking, with 5,720 people employed, making a total of 8,700, which represents about 39 per cent of the employment in these segments of the Australian wine industry. South Australia also produces a higher proportion of flagship premium wine than any of the other states.

Since making our submission in May 2015, the unemployment rate in South Australia has risen to 8.2 per cent. In relation to the unemployment figures for the metropolitan suburbs referred to on page 2 of our submission, the most recent figures for the small labour markets published by the Department of Employment are from the March quarter, and they were largely unchanged. However, given the large increase in the overall unemployment rate for South Australia, we certainly do not expect any improvement. I would like to make a small correction to our submission. In the list of suburbs on page 2 of that submission, the second to last suburb, which currently reads 'Royal Park—Hendon—Albert Park', should read 'Salisbury'.

In order to attract more people to the wine industry, the South Australian Wine Industry Association, with the support of the South Australian government, is running a careers project called Careers in Wine, with a dedicated website that can be found at Its aim is to promote careers in the industry and provide assistance to wine industry employers with various tools and materials relevant to improving their workplace training and knowledge. The project targets secondary schools and TAFE institutions to highlight the career entry points, career paths and career options in the wine industry, and provides assistance to wine industry employers relevant to improving their knowledge and training. Its aim is to provide better information about the numerous career pathways and opportunities the industry has to offer beyond being a winemaker or a viticulturalist. The website hosts three short videos introducing people who have used diverse ranges of skills and qualifications and applied them to their careers in the wine industry. The videos promote working in regional South Australia with real stories from people who have given opportunities, experienced innovation and developed passion for the wine industry.

Many of South Australia's 18 wine regions are located in regional areas outside of the major population centres such as Adelaide. For example, Coonawarra is 380 kilometres south of Adelaide; the Riverland is 241 kilometres north-east of Adelaide; the Clare Valley is 141 kilometres north of Adelaide. The temporary work visa system is important to the wine industry in the event that positions cannot be filled by local or other domestic applicants. Potential applicants based in metropolitan areas may not be attracted to move either temporarily or permanently to a regional area with a small country town. Therefore, wine industry employers may have few options but to rely on the temporary visa holders to fill vacancies. Compared to other industries such as mining, the reliance on the 457 visa stream is relatively small in the wine industry. Data from the Department of Immigration and Border Protection shows that, over the last 10 years, approximately 38 winemakers and viticulturalists have been recruited to South Australian wine industry employers through the 457 visa system. While in relative terms these numbers are low, for individual wine industry employers the ability to recruit overseas skilled, experienced winemakers and viticulturalists is essential where the employer has been unable to fill those roles with domestic applicants. In relation to short-term temporary visas, employees holding the working holiday class visa and the work and holiday temporary visa have been utilised.

Until 1 July this year, wine industry employers in South Australia were unable to utilise two of the state nominated skilled visas, namely the skilled regional provision visa subclass 489 and the skilled nominated visa subclass 190. These visas allowed skilled workers to live and work in a regional area for up to four hours and permanently, respectively. In order to be able to apply, potential applicants must nominate a skilled occupation from the state nominated skilled occupation list, compiled and reviewed annually by the South Australian Department of State Development. We are pleased to say that, after responding to a communication on 13 March from the Department of State Development and after consulting with industry, the Department of State Development has now added two important wine industry specific skilled occupations to the state nominated skilled occupation list from 1 July 2015. This means that, as an alternative to the 457 visa stream, wine industry employers from 1 July are able to accept applications from subclass 489 and subclass 190 visa holders. Thank you.

CHAIR: Thank you very much for your opening remarks. You gave us the metropolitan suburbs with the shockingly high unemployment rates, and of course we have got the closure of the car industry and subsequent industries that hang off that hitting South Australia. In the wine areas, because they are not these suburbs, what is the unemployment like, particularly youth unemployment, if that is the target of your webpage?

Mr Smedley : There is relatively little unemployment in those areas. To take an example, we may have a relatively unskilled job which can have on-the-job training—for example, in a cellar door capacity at a winery—and in some of those regional areas they may get one applicant. That applicant may be well known to the industry. I think this is the frustration that employers may find in regional areas where they are trying to get a range of applications from people with diverse levels of skills. That is just simply not happening in those regional areas, despite various forms of trying to source employment.

CHAIR: In relation to the careers you are offering, can you give the committee an overview of the sorts of full-time positions that you could offer, as well as permanent part-time that would represent a living wage and the sort of seasonal work? What is that mix like?

Mr Smedley : Sorry, permanent part-time did you say?

CHAIR: Yes, but permanent part-time that would offer a living wage, not just four hours a week. What are you offering? What is available in the wine industry?

Mr Smedley : I think you need to have an understanding of the wine industry. It is quite vertically integrated in terms of its operations. So you might look at it from a point of view of cellar hand working in the cellar. You may have a vineyard person. You may have people in bottling. You may have people in a lab doing laboratory type work. There is cellar door type activity, warehousing, logistics. Then you get the type of employment related to office type work—accountants, following through export issues and those types of things, right up to management of marketing, brand management et cetera. So the industry offers quite a diverse range of occupations that is available to people if they want to look for employment in the industry. The challenge for us is to see us beyond a winemaker or a viticulturalist. We are far more than that, and I think people need to understand that they are the opportunities that present themselves. For example, it may be a situation where a financial person—a financial accountant, a cost accountant, that type of person—is unwilling to go to a regional area. That may be for a number of reasons—because their partner may be already employed in some other thing or that they may be looking for their family to go to specific schools—so that creates issues for us in relation to trying to attract those people to the industry.

CHAIR: Are you saying that there is not high unemployment in the areas in which the wine industry sits geographically in South Australia?

Mr Smedley : I think that, in the range of what I am probably alluding to, we can fill the vacancies that we have in our industry, in general terms. But in peak demand times there are difficulties in filling those positions.

CHAIR: So this is where you would require seasonal workers. You would have permanent jobs, whether full-time or part-time, and then you have the seasonal work. Is that what you are saying?

Mr Smedley : That is correct.

CHAIR: Obviously, when you want skilled people you would like to cast the net wide and maybe attract people from the city to move, but we all understand that is difficult. In the main, is it predominantly the seasonal work where you are not able to attract workers?

Mr Smedley : In general terms that is correct, although I would like to make the point that there are other times in some regions when things occur. For example, I do not want to be seen as championing this, but when a business may make people redundant that enables us to top up in that particular region for that area. So if the wine industry is having a difficult time and a company needs to downsize that does provide some additional labour elsewhere, but that is not always the case. If there is a—

CHAIR: And you do not want that to be your labour market pool.

Mr Smedley : That is correct. There are times when companies may have a great opportunity overseas that then expands their business, so therefore there is a demand for workers that may not necessarily be available in a regional location.

CHAIR: Yesterday I met with Thomas Foods at their potato business. They were saying the local council is looking at how it creates hubs and deals with unemployment in the areas where—because they are close to the car plants, as I understand it. Are the local councils as well as the South Australian government getting on board with trying to promote local employment and assist the wine sector?

Mr Smedley : I am not familiar with that directly in the regional areas we are in. It is certainly something they are mindful of but I do not know that there is a direct program. Direct engagement has not been made with our organisation.

CHAIR: Certainly the local councils around where the tomato growing and potato growing occur in South Australia are looking at creating food hubs, so—

Mr Smedley : Sure.

CHAIR: I was just wondering whether the local councils in your area are looking at doing similar things.

Mr Smedley : Not to my knowledge. As I understand it the food hub is going to be in the northern suburbs of Adelaide.


Mr Smedley : So generally they are metropolitan type councils rather than the regional councils that we would deal with.

CHAIR: But maybe there is a model that could also assist.

Mr Smedley : Sure.

CHAIR: Does your sector predominantly use 457 visa holders?

Mr Smedley : That is my understanding, yes.

CHAIR: How do they source those 457 workers?

Mr Smedley : The wine industry is a global industry in some respects, so therefore there are connections with people who want to have experience in our vintage or our industry in Australia. So there is that interchange available. That can happen basically because our vintages do not coincide. The Northern Hemisphere and the Southern Hemisphere are at opposite times, and that works very well because—

CHAIR: You could have an international job.

Mr Smedley : Many people do seek that for their career CV, because that is an important aspect of getting experience. We also need to understand that the weather conditions, the actual conditions of the vintage, may be very different. If we looked at the last five years of the wine industry we would see that our vintages have all been different. There has never been a normal vintage. The point from that perspective is that there is a pool of people who can be attracted from overseas but they tend to be more from skilled type occupations rather than unskilled.

CHAIR: With your seasonal workers—are you using 457 visa holders there?

Mr Smedley : Not generally. That would certainly be for the winemakers and the viticulturalists, but for the other areas it is really about meeting the demand for unskilled people who are willing to be trained.

CHAIR: Is that the 417 visa holders?

Mr Smedley : More likely, yes.

CHAIR: Are they sourced through labour hire companies?

Mr Smedley : In some cases they are. In other cases it is direct employment.

CHAIR: Where they are sourced by labour hire companies, do you know which companies are being used?

Mr Smedley : We are certainly aware of which companies provide labour hire services in each of the regions, and from that point of view we do have engagement with those companies.

CHAIR: How do you ensure that those 417 visa workers are being paid appropriately? What are the checks and balances?

Mr Smedley : We certainly have what we call a training and education program. We have just run one, for example, in the last month to ensure that people are aware of their terms and conditions—

CHAIR: Is this labour hire companies?

Mr Smedley : Yes. Not only for labour issues—rates of pay and conditions of employment—but also wider than that in terms of understanding things under the Migration Act, for work health and safety and in relation to the state and federal antidiscrimination and antiharassment laws, to make sure that people are aware of that compliance. Our involvement with the wine industry has taught us that, in general, employers simply want to know what they need to do—and that comes down to education. If we can provide those services to industry, they will then have the opportunity to understand what their obligations are and then ask questions and explore issues that they may not understand.

CHAIR: It would be good if you could give us the names of the labour hire companies you are using.

Mr Smedley : Sure.

CHAIR: I say that because yesterday I met with about 25 417 visa workers. The wine industry has not been the subject of adverse media around labour hire companies, but South Australia certainly has. Of the 25 417 visa holders that I met with yesterday, there were three workers who were being paid properly, and they were working across a range of industries in South Australia. They were certainly in the agriculture sector and some were in cleaning and hospitality, and every single one of them was earning between $10 and $17 an hour. So this is obviously problem with some labour hire companies in South Australia, and I think the more we can expose these companies the safer workers will be. If you are using good labour hire companies in the wine industry that are doing the right thing, we need to share that more broadly. There are labour hire companies, particularly with visa workers from Taiwan, that are ripping people off. There is no other way to put it.

Mr Smedley : I am certainly not aware of that. The industry takes pride in its education program and also in its compliance programs, and we work consistently with the Fair Work Ombudsman's office and SafeWork SA to ensure that we are aware of any issues that arise so that we can address them.

CHAIR: When Fair Work are visiting, do they advise you ahead of time?

Mr Smedley : For example, there was a focus by the Fair Work Ombudsman in relation to pruning. That is a peak period, which obviously provides a rich source for us for labour hire firms for employees et cetera. We certainly worked with that office in relation to that activity, making sure, for example, that employers attended their education sessions.

CHAIR: Two of the workers told me yesterday—and this happened in Queensland—that their growers knew when Fair Work were coming and these visa workers were told not to come on that day. So I am wondering if Fair Work advises ahead of time. We can ask them, but is that your experience?

Mr Smedley : My understanding of the last advice was that they advised the region but they did not necessarily advise the employer or the property or the site that they would attend.

CHAIR: But they would say, 'We're going to be in the region from this date to this date'?

Mr Smedley : Pruning is a defined period within our industry. So, whether it is by default or whether it is by actual dates, the reality is that that was the focus of their activity for that particular issue. But I think what is more important to understand is that, irrespective of whether they tip them off, for example, the employers we deal with saw that as a great opportunity to make sure that people were educated and did have an understanding of all of the issues that they needed to comply with, including documentation, and also to address any concerns that they had.

CHAIR: I am just wondering what the magic ingredients are that we take from your employers, who are doing the right thing, and get that happening in the agricultural sector in South Australia, where it seems that in large part the wrong thing is being done.

Mr Smedley : It is not a quick fix. The answer to our position is that, over a long period of time, the wine industry has seen the importance of education and the importance of understanding the documents that they have to comply with. As I said, most employers in our industry sector will say, 'Just tell us what we need to know and what we need to do and we will comply with that.' There will be opportunities, I guess, not necessarily in terms of going down to every particular degree of time sheets or whatever but for the employer to understand what the requirements are and what they need to do.

From our perspective, it is really about building up loyalty and trust between your constituents to ensure that they can ring up without fear or favour at any time and ask a silly question—or a question that might seem to be silly to us or to a professional. For each and every person that comes along—someone who may be doing a payroll, for example, out of the industry and needs to understand how the award operates or how shift provisions operate—there should be specialist people that can address their issues and, if they need to come on site, are willing to do so. One of our major things is that we will attend wherever we need to attend to ensure that employers get what they need or have their questions answered. That may be additional to making sure that we work with related agencies, because if there are issues in our industry—as I said in my opening statement, we have an international focus and we have international awareness of our state—we want to make sure that we are doing the right thing for all the right reasons.

CHAIR: Maybe the agriculture sector does not have a robust oversight body such as yours.

Senator McKENZIE: Thank you very much for your evidence. A lot of my questions have already been answered, around the role that your association plays in educating your members on their roles and responsibilities to ensure they are providing safe and legal workplaces. A lot of the submissions that we have received have called for modelling and data collection around skill shortages at a much more frequent rate than is currently the case, particularly the submissions of the ACTU and various unions. I am just wondering if you have a perspective on that. Given that, as you suggest in your evidence, viticulture is an industry that is seasonal—you know the pruning time is x, it takes y time and you will need z labour at this time to do it—is taking any more regular snapshots of skill shortages in those regional areas going to provide you with any more evidence, or will it simply be a greater burden for industry?

Mr Smedley : There are probably two ways to look at that. In our industry, I use the language that the industry provides me, but in general terms, for example, vintage can start anywhere, in any region, at different times—probably from late January to early May. In many cases, the people that are looking for employment during that time—and there are many people that only work during that time—may go up and down a particular route, such as the Barossa Valley Way, seeking who is providing the best terms and conditions, and they usually get their quotas filled first. It is probably anecdotal in the sense that, once all of that happens, we then find that down the track they might still be providing award conditions, but they may still then be not filling their quotas. A few years ago, we had a situation where many of the companies were not filling their vintage quotas for employment. That largely has changed, and the reasons for that are a whole range of issues, but generally we are not necessarily having issues in filling vacancies.

The alternative to that is to say, 'How can we actually foreshadow whether we are going to have a skill shortage before we have it?' because the last thing you want to have is a situation where you are looking for people to undertake skilled jobs, or unskilled jobs, and you cannot fill them. From that perspective, it would be useful to have information about that. I am not sure just how that would be workable in our industry, because in many cases the way in which companies work is that they provide loyalty. It might be that they have x per cent of people that return every vintage and have done so for many years, and they make sure and say, 'We'll see you next year.' Those things are building up the loyalty, albeit on a cycle of a short period of time.

From my perspective, we perhaps have in our industry sector a very fortunate situation where we are looking at just a very defined area and we can get anecdotally, from many sources, feedback from employers about how they went and what the issues were this year. I guess we tend to use those figures as a means for determining whether we have an issue or not in terms of shortage, oversupply and those types of things. That is, I guess, how we are being informed about this very issue in terms of visa issues, because you might find in a regional location 350 kilometres from Adelaide that they had a wine maker and the wine maker upped and left. What do they do? All the winemakers are occupied in the region—there becomes the problem.

Senator McKENZIE: Do any of the wineries that you know of use the seasonal workers scheme or Pacific Island seasonal workers?

Mr Smedley : Not to my knowledge in South Australia.

Senator McKENZIE: What is the main union involved with the workforce?

Mr Smedley : In South Australia it is United Voice.

CHAIR: I need to put on the record that I was the former national assistant secretary of United Voice.

Senator McKENZIE: I do not have any further questions.

Senator RICE: Thank you, Mr Smedley. Sorry, I missed the beginning of your submission. I have a question on the use of 417 visas. At those peak times, say, during the pruning times or the harvest times, what proportion of the workforce would be 417 visas?

Mr Smedley : Very small. I cannot give you a percentage because I do not think we collect statistics on that particular issue, but in general terms we can supply the majority of our workforce from local people. It is virtually a top-up. It is if we are aware that we are not going to meet quotas that we will be looking for that. Certainly, we do get a lot of people that traditionally are traveling with working visas et cetera that are looking for that employment. That certainly does provide our labour supply.

Senator RICE: You are in a situation where you have multiple employers—very many different ones, which I think is an interesting comparison with some of the other areas that we are looking at. In terms of recruiting labour for those peak times, how many of those employers would recruit them directly or use labour hire?

Mr Smedley : That is a difficult question to answer with any degree of certainty. I think the way in which our industry works is that the majority of employment is probably within the top 20 companies, and then you will find that the remaining people would probably look to labour hire directly. If you looked at wine production, there might be 700 licensees in South Australia licensed to make wine. On that basis, you might find that as a percentage many of them might not have viticultural production, so there is a split as to what type of work they provide. But, again, as I said, probably the top 20 would be sourcing directly and then others would be looking for labour hire top-ups. But many of them also do not directly make their wine. They might make it contract by contract. So that percentage of people may not necessarily directly employ people but are looking for others to make their wine and therefore those people are making their wine. So it is not able to say that because there are 700 licensed producers and the top 20 and then do not make an assessment of saying that there are simply 680 left that would employ. It would, again, be a very small percentage of that, but I am not really sure of the exact number.

Senator O'NEILL: Could I take you back to the Clare Valley. In fact, I would like to go back to the Clare Valley myself.

Mr Smedley : I was there on Friday.

Senator O'NEILL: I am having witness envy now. I want to speak about that because it is an area that I did go to and I have some geographical familiarity with it. In terms of the Clare Valley, I wondered if you had any of the local unemployment statistics for that region.

Mr Smedley : No, I don't.

Senator O'NEILL: Okay. That raises a question where we have these suburbs raised here in your inquiry: Elizabeth, Smithfield, Davoren Park, Christie Downs, Hackham West and Christies Beach. Where in relation to Adelaide are those suburbs that you have listed?

Mr Smedley : If I can take you to the first three, they are northern suburbs of Adelaide. The next two are in the south of Adelaide. We changed the second dot point to Salisbury, and that is certainly a northern suburb. Christies Beach is a southern suburb.

Senator O'NEILL: So they are all suburbs of Adelaide, but the wine industry is in regional centres.

Mr Smedley : That is correct.

Senator O'NEILL: Do you have any data about employment in regional centres where the wine industry is based?

Mr Smedley : I can probably get some for you.

Senator O'NEILL: Thank you; that would be a lot more helpful for understanding the nature of the market and the pressures. Do you have any idea at all about unemployment in the Clare Valley area?

Mr Smedley : No, I would be guessing.

Senator O'NEILL: Is it in the same order as these?

Mr Smedley : No. I think the issue I mentioned is that, whilst there would be unemployment in those regions and particularly in the Clare, in general terms there is not necessarily an unemployment issue in the wine industry. The other issue is that they can potentially fill their quotas. I will certainly look for that information for you.

Senator O'NEILL: Could you also indicate what your industry and your participants provide by way of local training and training pathways for young people in those regions into the jobs that seem to have become established as positions for 457 or any of the temporary visas to which you refer in your submission—400, 401, 403, 416.

Mr Smedley : I would make the point that from a historical point of view our industry is not good at attracting young people to work. What we generally find is that people in their mid 20s come to work in our industry and from there they make their careers. Alternatively—

Senator O'NEILL: Have you undertaken any research into why you are unable to attract school leavers?

Mr Smedley : I think the issue is that many of them think they need to have university education and therefore they go off to university and find their pathways through that process. It is one of the reasons we have started the Careers in Wine website—to make sure people are familiar with the types of occupations in our industry. If you ask people in the street, 'What would you do if you worked in the wine industry?' They would say, 'Winemaker' or 'Tend vines'. Our industry is far broader than that, and we need to get that information out to school leavers and to employees across a range of occupations to ensure that they are familiar with the types of occupations that are offered in the wine industry. Let's face it: many people, once they get into the wine industry, love the industry. It is just that they have this preconception that they could never work there. Who would want a financial accountant?

Senator O'NEILL: Given the number of temporary visa holders, the concern that is consistently raised with us is the industry's dedication to training to ensure there is a pathway for young Australian residents to access these industries. Clearly you are mindful of the gap and I appreciate the fact that you have put it on the record, but I would be interested to know what you are actively doing to applaud, support, fund and organise that transition from school into work in these regional areas where winemaking is underway.

Mr Smedley : One of the first things that we have been doing is getting the major employers in those regions to engage with the schools—probably from year 10—to inform them of the opportunities in our industry. Many of the jobs can be trained on the job and those skills can be imparted through that and supplemented by TAFE skills. In the regional areas TAFE supports our industry in the various occupations with certificate level courses.

Senator O'NEILL: One of the programs that has been defunded since the election of the Abbott government is the Youth Connections program and the industry partnership program, which was designed to do exactly what you have described. I would be very interested if you could provide us with any information about the way that program was used before its funding was ceased by the current government. Could I ask you to go over for me once again the numbers that you mentioned: 8,700 people was in your opening statement. What exactly were you referring to there, Mr Smedley?

Mr Smedley : I was probably making the point that South Australia actually dominates the wine industry employment sector, as we do in many other areas of production et cetera—

Senator O'NEILL: So was the that South Australian employment figure?

Mr Smedley : That is correct.

Senator O'NEILL: Then you went on to talk about 39 per cent of that. Could you fill that information out generally for me?

Mr Smedley : So 39 per cent is employed in South Australia in the wine industry. So our figure, if you like, compared to the Australian context is that we employ 39 per cent of labour for the wine industry in South Australia.

Senator O'NEILL: You employ 39 per cent. What was the percentage of the numbers from this temporary working scheme here?

Mr Smedley : I have not been able to give you that. We would need to provide some information about that.

Senator O'NEILL: That would be very helpful, because one of the suggestions that has been put to the committee from the ACTU was that a dedicated ratio of training places be made in proportion to the number of 457 or other temporary work visas that were used within an industry. What is your response to that suggestion?

Mr Smedley : I think the issue about training needs to be looked at on an industry sector. To put quotas on issues to do with training simply does not look at the issue that is faced by industry sectors. The importance of training is to be able to build skills. If you are aware of your industry sector's desire and needs, you do not need quotas to undertake that. Employers generally in our industry understand the importance of skill development and having a skilled workforce that is ready, willing and available to do the tasks, through a quite significantly varied year in our industry, given seasonal demands and given the whole range of activities that may be required in a winery or a bottling hall or a vineyard. So, from my perspective, it is important for employers to understand that they benefit by training their employees and by having trained employees working for them. You cannot do that really by a quota.

Senator O'NEILL: Would you be able to provide on notice an indication, with a historical frame, of how temporary visas have been employed in this industry over, say, the last 10 years? Would you have that kind of data?

Mr Smedley : We probably would not have that data; we could probably ask the question of those employers.

Senator O'NEILL: Just to get a bit of a graph indication of where it is rising and falling—and if there is any finer grained data around the particular skills that are required. One of the things I am increasingly concerned about is the gap between labour market testing and dedicated training that responds to that testing. If the labour market testing is accurate and there are not these people around, where is the action that follows immediately to create the training to fill that gap?

Mr Smedley : I suspect it is about the people. If you do not have the people, how can you actually train them?

Senator O'NEILL: So we have an unemployed population—

Mr Smedley : I am not sure I follow you. You are saying—

Senator O'NEILL: We are finding, we are getting reports, that there is a failure of people who are available for particular roles. And into those roles, into that void, 457 workers are coming—or 417 workers or other temporary visa holders. Given that there is a gap between the provision of Australian residents to fill those jobs, then you would think automatically that would lead to a training response so that we would not continue to have to rely on bringing in visa holders into the future. It does not seem to me that those two things are speaking to one another.

Mr Smedley : I cannot answer for other industries. For the wine industry, what I can say is that in general terms we do not have the people to train in the first instance, so we need to get them to those regional areas. For example, what you are highlighting is probably something which may happen in a populous area. If you have limited people or no people, how do you actually get someone to train? That is the difficulty I think in regional employment in regional Australia or South Australia. If the people are there, we can train them. In general terms, we are not finding that the people are there, and in some instances we need to resort to visa type employment. So, whilst I understand what you are trying to suggest, the reality from our perspective is far different.

Senator O'NEILL: That argument holds for me when I think about peak periods of pruning or picking or whatever, but for ongoing employment surely that is not the case?

Mr Smedley : Again, to understand how regional employment may be working—for example, if you have a situation where the partner of the winemaker is a local teacher and the teacher gets transferred, then the winemaker is gone. Where do you get the winemaker? They do not just sit around. You can probably try and poach someone from somewhere else, but the reality is that we then need to have a vacancy for a winemaker that may not be in the area. We then need to source them from a different area—and what if that does not happen? What companies tell me is that the brand and the positioning of the employer is very important; if they are important domestically and internationally, they will be an attractive employer for, say, a winemaker. If they have great branding and great international markets, they will get the people they need. If they do not have that, then they may struggle to attract someone that has winemaking skills.

Senator O'NEILL: So the person you just described would be a temporary work skilled 457 visa holder, a winemaker. And you said there were only 38 of those in South Australia. So that is probably not the area in which we have the biggest volume of people coming through.

Mr Smedley : Are you talking specifically about the wine industry or are you speaking generally?

Senator O'NEILL: Specifically about the wine industry for you. Which of the other visas that you have indicated here are the most common ones that your industry uses?

Mr Smedley : I think that was in our submission. Certainly the short stay; potentially the long stay as well; and possibly 417 and 416.

Senator O'NEILL: The seasonal worker program. And 417 did you say?

Mr Smedley : Yes.

Senator O'NEILL: Could you give us a rough indication on notice of the proportion of which of those visas is used throughout your industry that would be of some interest to me. Could I also go back to your evidence around Fair Work and the discussion about pruning. What is the pruning season?

Mr Smedley : Do you mean the time frame?

Senator O'NEILL: Yes.

Mr Smedley : It can be anything from June to September, depending upon the region; given variation in seasonal factors. It certainly will not be June to September in every region in South Australia.

Senator O'NEILL: But across that period of time?

Mr Smedley : It could be.

Senator O'NEILL: The number of wine regions was—I think you indicated—about four or five?

Mr Smedley : 18 wine regions in South Australia.

Senator O'NEILL: With regard to the advice by the Fair Work Ombudsman and their particular interest in pruning, how did the industry become aware of that? Was it a broadcast to the industry at large?

Mr Smedley : It was a direct phone call from Fair Work Ombudsman to our office.

Senator O'NEILL: Could you take me through this. It happened this year?

Mr Smedley : Yes.

Senator O'NEILL: It is happening now between June and September?

Mr Smedley : Yes, that is my understanding.

Senator O'NEILL: So the Fair Work Ombudsman contacted your office, Mr Smedley.

Mr Smedley : Yes.

Senator O'NEILL: How did that conversation go?

Mr Smedley : I did not have the direct conversation so I am unable to answer that.

Senator O'NEILL: How was it reported to you and who received the call?

Mr Smedley : One of our staff.

Senator O'NEILL: At what sort of level was this communication? Was it with your front desk receptionist?

Mr Smedley : No, it was to a business service advisor who has responsibility for industrial relations, and work health and safety issues within our business.

Senator O'NEILL: And that person then reported this conversation to you?

Mr Smedley : Not directly. I became aware of it when there was a request made to survey our industry; an advice was sent to our industry that the Fair Work Ombudsman wanted to have a group of employers in a particular regional location to come in so they could educate them about the requirements of the labour law system.

Senator O'NEILL: Could you give me an indication of when this conversation occurred.

Mr Smedley : Probably early or late May.

Senator O'NEILL: So in late May the business service adviser had a conversation with the Fair Work Ombudsman. Was there any documentation around this, or was it just this conversation that happened?

Mr Smedley : I am not aware of whether there is any documentation around it.

Senator O'NEILL: Could you take it on notice to get some details of the conversation, the way in which it happened and any documentation and provide that for the committee, please. The request to survey followed that.

Mr Smedley : No, the request for an education session followed that. I used the wrong term. I apologise.

Senator O'NEILL: Okay, an education session. So the Fair Work Ombudsman basically asked you to get a group of people together that they could talk to, saying, 'This is what you're supposed to be doing.'

Mr Smedley : Yes.

Senator O'NEILL: How many of the 18 regions did you draw those people from?

Mr Smedley : They requested one region.

Senator O'NEILL: Which region was that?

Mr Smedley : Coonawarra.

Senator O'NEILL: What action did your organisation take in terms of advising the 18 regions of the Fair Ombudsman's interest in pruning this year?

Mr Smedley : We liaised and made sure that the Coonawarra area was advised of the request.

Senator O'NEILL: What form did that making sure take?

Mr Smedley : Basically, we sent information out to our members and non-members about the request.

Senator O'NEILL: Information about the request to be part of the education?

Mr Smedley : That is correct.

Senator O'NEILL: Did you advise them that the Fair Work Ombudsman would be inspecting in the area over that period?

Mr Smedley : I cannot answer that directly at that time.

Senator O'NEILL: Since that time, has the Coonawarra or any of the other 18 regions been advised that the Fair Work Ombudsman will be undertaking inspections of pruning?

Mr Smedley : We made our members aware that the Fair Work Ombudsman was interested in understanding what was going on in pruning for people that were involved in that pruning activity across the state.

Senator O'NEILL: How did you communicate that? Was it an email, or was it a newsletter?

Mr Smedley : My understanding is that it would have been an email.

Senator O'NEILL: I would be very interested, if possible, to receive a copy of that. Let's have a look at what it says. I would be interested to know exactly what it says.

Mr Smedley : Sure.

Senator O'NEILL: Could it be conceived that that was a warning that the Fair Work Ombudsman would be coming to inspect the industry this year?

Mr Smedley : That could have been the case. They could have taken that from it, yes.

Senator O'NEILL: What do you think the response following such an email was likely to be?

Mr Smedley : Probably, from our organisation, a response to ensure that people were educated about the issues that may come up and to ensure that anyone that had any issues could have them addressed.

Senator O'NEILL: So an opportunity—I do not want to verbal you here—to clean up your act before the Fair Work Ombudsman comes and have a look at what you are doing.

Senator McKENZIE: You do not want to verbal the witness!

Senator O'NEILL: The question is: is it possible that people who received that information and who were doing the wrong thing have had an alert that would make them clean up irregular practices so that they would look more palatable to the Fair Work Ombudsman on arrival? Is that possible?

Mr Smedley : Some of those practices could not be corrected if they were doing something wrong—and I am not suggesting they were. For example, if there were time sheets, you would not be going back and falsifying time sheets, surely, or making a suggestion.

Senator O'NEILL: Mr Smedley, you and I might think that way, but sadly that is what we have seen in the course of this inquiry. It was presented to us at our Sydney hearing, and I think I still have the copies with me here: the real time sheets and the fake time sheets. We have been presented with that—not in the wine industry; I will grant you that. But, yes, there are unscrupulous people out there.

This is my last question. The ACTU submission to our inquiry in Sydney indicated that a sample of 108,000 457 visa holders were looked at, and the size of the sample was less than two per cent. What was found with that two per cent was quite a significant concern to me and, I think, to any working Australian who believes in fairness, equal pay and equal opportunities in the workplace for everyone. If you are working with somebody, you expect them to get the same pay as you would as an Australian citizen. That is part of the conditions of these temporary workplace visas. The evidence of noncompliance, poor treatment and exploitation emerged from the survey findings, not only of the ACTU but also of the Migration Council. Two per cent of visa holders responding to the survey were paid well below the threshold, earning less than $40,000 compared with the TSMIT of $51,400, which has not been indexed, by the way. A mechanical engineering technician—I would say that would be one of the 457s; you would have to have a skilled one like those that you use—was being paid $10,000 below the minimum requirement—

Mr Smedley : Is this relevant to our industry or is it industries generally?

Senator O'NEILL: Yes, because—

Mr Smedley : I am just asking because I am not sure whether your—

Senator McKENZIE: [inaudible] South Australian industry employ, Mr Smedley.

Mr Smedley : I understand that, but are you talking about every industry or are you making a specific—

Senator O'NEILL: Across a range of industries—across 808,000 visa holders. There was a two per cent sample. Not only were there people on unskilled visas but there were—and this is why I use this evidence—people on skilled migration visas who were being paid well below the minimum rate of $51,400 that they are entitled to receive. Why do you think that could happen?

Mr Smedley : I cannot answer that. I do not know why it happens. Certainly from our perspective, we endeavour, as I indicated before, to provide the education necessary to ensure employers meet their compliance obligations. Why some people do not do that would be the same question as: why do some people speed?

Senator O'NEILL: Because some people think they can get away with it, don't they?

Mr Smedley : They may do, but in our industry—

Senator O'NEILL: That is a question of policing, isn't it?

Mr Smedley : It is a matter, I guess, of making sure that people are aware of their obligations through various different ways and forms, to ensure that they understand their obligations. As I said earlier, many people in our industry will simply say: 'Tell us what we need to know, reinforce it and we will make sure that we do those things.' In general terms, in our industry, that is what employers want to do: make sure they do the right thing.

Senator O'NEILL: In general terms, I have to agree with you, but the problem is that we are finding that there is an incentive for some unscrupulous people to exploit others. I would hope that the wine industry would be a carve-out industry, but I am afraid that I do not believe it would be completely within the law at all points in time. Thank you for your evidence, though, this morning, Mr Smedley.

Senator McKENZIE: Mr Smedley, listening to your evidence over the last hour, it seems that the issues within the South Australian wine industry around employment are more broadly felt across agricultural industries, and there is the attraction of young people, in particular, to the diversity of career options available in agriculture. It is not simply an issue for the wine industry alone. Also, do you have more broader comments to make around the mobility of the Australian labour force in response to some of Senator O'Neill's commentary around: if we have X unemployed, there is the assumption that that is automatically plugged into job opportunities, when we look at the lack of motility, in particular, despite significant relocation incentives from the current government to assist the very problem you are talking about.

Mr Smedley : I guess that comes down to an assessment of why people move generally. In our experience, metropolitan areas and things of that nature provide certain things that people are looking for. When you transfer to a regional area, for example, you might find that getting fast food or a meal after eight o'clock in some of the regional towns is challenging, if you are simply looking for eateries that might be available when you want to eat rather than when the town might provide the meal. The other thing, of course, is the whole infrastructure issue about housing—having a specific hospital or specialist medical care and those types of things. Schools play a big part.

In addition to that I guess it is really about what opportunities, going to a regional area, your partner can use for employment. That provides us with some significant challenges in regional areas, because in most instances where the applicant is very interested in a particular position you find that the partner is not able to get employment or is not interested, and therefore you lose the opportunity for that candidate. So, mobility issues become a real issue in our industry—just trying to attract people from—

Senator McKENZIE: And more widely across the Australian labour force. When you compare it internationally, we are quite immobile. I just wanted to know, in the context of Senator O'Neill's commentary around the Youth Connections program, what the state Labor government has been doing to encourage young people, particularly from regional South Australia, into agricultural industries in this state.

Mr Smedley : I am not necessarily familiar with a program that addresses that particular issue.

Senator McKENZIE: Thank you.

CHAIR: Thanks for coming along this morning and for your submission. We appreciate it.

Mr Smedley : Thank you.