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

HOWE, Dr Joanna, Private capacity


CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. The committee has received your submission. I now invite you to make a short opening statement and at the conclusion of your remarks I will invite members of the committee to put questions to you. Do you have any comments to make on the capacity in which you appear?

Dr Howe : I am a senior lecturer at the Adelaide Law School. I will keep my comments brief. I have a couple of things I want to say in my opening statement. The first is that there is a disjunction between Australia's official policy settings with regard to migration and the reality on the ground. There are three areas that I want to talk about here: one is the 457 visa, the second is the conduct of low- and semiskilled work in the economy, and the third is the ChAFTA and these free trade agreements. I will make some comments on all three.

With regard to the 457s visa, a couple of these issues were picked up in Robust new foundations but they are still not properly being dealt with. The first is: does a genuine skill shortage exist and what occupations are skilled and should be allowed for temporary labour migration? We currently have two mechanisms to determine this. One is the CSOL, which has over 600 occupations on it. We know that there are many occupations on that list which are not in shortage. The second is the mechanism being used to ascertain whether they are in shortage, which is employer conducted, labour market testing.

The way that legislative provision has been implemented by the department through policy is fairly weak. So the direction that has been given to employers is advertising on social media. One Facebook ad, for example, will suffice. So there is a real concern here that, even though there has been reform, in Australia we still do not have a proper mechanism to work out whether a genuine skill shortage exists and which occupations are skilled and should be on this list. The problem is this design—and I think this goes back to your problems, Senator Rice, which you identified about it being a systemic issue. The problem is when the structural design of the visa is misplaced, you are then going to create the conditions for exploitation to take place. So it is all well and good to ask the Fair Work Ombudsman to clean up the mess, but if at the outset our visa settings are correct then it is going to create this.

Firstly, I think we need to look at that reform of employer conducted, labour market testing. Secondly, Senator Cash has announced the Ministerial Advisory Council on Skilled Migration. Their central task will be to look at the CSOL and try to work out what occupations should be listed on it. I have a couple of concerns that I want to identify. I think it is a great step in the right direction to be using an expert commission to determine the composition of our skilled occupation list. It is clearly a mess and we need to do something about it. But it is concerning that, in terms of the appointments onto that so-called expert commission, seven out of eight of the appointees have an embedded preference for increasing skilled migration. I think that does create a concern when the previous MACSM had a more equal balance of four members who have a constituency of wanting to increase immigration and perhaps four who have concerns about increasing skilled immigration.

The Robust new foundations report drew upon evidence I have given to John Azarias and that panel. I talked very strongly with them about how we need an independent expert commission. The government have said they are implementing that recommendation, but the Robust new foundations report says quite clearly that that expert commission should be tripartite. When seven out of eight have an embedded preference for increasing skilled immigration, I think there is a concern there that their central task of reforming the CSOL will not be done with the kind of rigor we need in order for the public to have confidence in the system.

The second aspect of the MACSM that I want to raise with you as being problematic is just whether it has a dedicated labour market analysis resource. If we look at the United Kingdom's Migration Advisory Committee, their MAC, this was a committee that survived the Cameron government's red-tape challenge. They got rid of a whole lot of statutory organisations, but they did not get rid of the MAC. They recognised that in order to have a migration system that had public confidence in it, they needed a properly functioning expert commission. That commission does not have industry stakeholders on it; it has economists and legal scholars who take information from a public submission process but then they devise the occupational shortage list in a credible way.

The MACSM does not have a dedicated independent labour market analysis resource. Unlike, for example, the UK where the MAC is supported by the Home Office but has its own separate staff and it has independence; therefore, it is very transparent about its methods and about the information that it gathers. I think there are some learnings that we can take from the UK approach with regard to the MAC and I do have concerns about the way the MACSM has been implemented.

The fourth issue with regard to 457 visas is this question of enforcement. I think the reality of temporary migrant work around the world is that it is precarious work. There are particular features about temporary migrant work that make it a real concern. So it is no wonder that a large proportion of the activities of the Fair Work Ombudsman now is being funnelled off into temporary migrant work. It was a positive reform of the last government to increase the number of inspectors and to use the FWO in this way, but it is always going to be a drop in the ocean. The reality of Australia's geography and the increasing use of temporary migrant workers means that we cannot just hope to fully rely on enforcement and monitoring, there needs to be proper attention given to structural design.

The second area that I want to talk about is not with regard to high skilled work, but with low and semiskilled work currently being conducted by working holidaymakers. We know that 90 per cent of horticultural work is being performed by people on 417s. There are some significant design issues here with regard to this. Firstly, there is no labour market testing and so, unlike the 457, in the 417 scenario there is no labour market testing, so those workers are not even being protected by the fact that we know there is a skill shortage there. When there is a skill shortage the worker has some labour market power because they cannot be easily replaced. In the 417 scenario there is no skill shortage, so the absence of labour market testing automatically leaves these visa holders vulnerable. Secondly, it usually occurs in remote locations and so there is little protection; they are made vulnerable by their geographic isolation. Thirdly, there is the use of migration intermediaries and labour hire companies. Fourthly, and this is something I want to draw out, there are no sponsorship obligations on employers who use 417 visa holders. This is different to 457 workers. I think this was a issue that the FWO was asked about. The fact is that the work of a 417 visa holder is invisible to the Department of Immigration and Border Protection because there is no sponsorship arrangement between the department and the employer. The only time 417 visa holder exploitation comes to light, or the fact that their work comes to light, is when the media or some other body draws attention to it, so there is a major design issue here in that employers are able to use 417s but there are no sponsorship obligations. The fifth point I want to make is that, increasingly, the government—and this is a trajectory that is continuing on from the previous government—is allowing 417s to be used as a backdoor labour source to perform low and semiskilled work in the economy. We do not have a low skilled worker visa. We are officially a highly skilled worker visa country—I think that is what we like to call ourselves—but the reality is there is a lot of work being done through this back door, through 417s, and it is only being extended with the Northern Australia white paper and the agriculture white paper. Both of these white papers are indicating they want to extend the 417s to fill labour shortages, so there is a real concern that we are using this as a labour visa but without the protection.

The third area is the chapter and the investment facilitation arrangement. There has been a lot of talk about whether the IFAs will allow Chinese workers to be paid under the minimum wage in Australia. The government response, which is technically correct, is that Australian law will apply equally to these workers. However, I just want to draw the committee's attention to the fact that even though that is true—the IFA and the chapter require these workers to be paid in accordance with Australian law—there are a number of structural factors that mean it is likely that exploitative conditions will proliferate for these workers and that they will be paid below the minimum wage. Firstly, there is no labour market testing, so they are not protected by the existence of a skill shortage. Secondly, under the chapter this class of worker will have limited English speaking ability, union organisation or knowledge of workplace rights. Thirdly, they are likely to have limited social and communication connections, so their isolation will mean they are unlikely to voice their concerns about their conditions to people they meet because they are probably going to be accommodated and then transported to work on these construction sites through their employer. This makes enforcement and monitoring extremely difficult. It is likely to be short-term work, which means that even if incidences of exploitation do come to light these workers will have flown home and we cannot enforce it. And the biggest point is that their migration status is linked to their employment status, so under the IFA, unlike any of the other visa arrangements we have, an employer will be able to fly in Chinese workers and their right to stay in Australia will be contingent upon their employer agreeing. That worker is extremely vulnerable because if they complain they will get sent back home, and they know that, and the huge income disparities between China and Australia mean this worker knows that even if he or she is being paid below the minimum, even if he is living in cramped accommodation, even if he is being treated poorly, he is still getting a higher wage than in China. The fact that migration status is linked to employment status basically creates the structural conditions for this worker to be exploited.

Senator RICE: In your submission, given the problems with the 417 visas—and you expanded more on the problems with the workforce that is likely to come in with ChAFTA—you talk about the need to have a low-skilled temporary working visa. Obviously that would need to go along with some serious labour market testing.

Dr Howe : Absolutely.

Senator RICE: Do you want to expand on what that would look like?

Dr Howe : Just very briefly, in the submission—and it draws upon a journal article coming out later this year about the idea of a low-skilled work visa—essentially our thesis is this: there is a whole lot of low-skilled work being done in the economy, but it is being done through a backdoor, unregulated kind of source, and if we want to do this properly, then we should just bring it out into the open and do it properly. That of course means that we need labour market testing, and we do say that in this submission. Since writing this submission, a number of growers have come to us and asked us to do this research for them. So what we are now looking at is doing an Australian Research Council project with industry to try and develop what this low-skilled work visa would look like. It would have some serious worker protective provisions in it because it would need to. Labour market testing would not be enough. We know that there are labour shortages in the horticulture industry, but that in and of itself does not protect those workers, because there are a whole lot of issues. For example, one thing we might look at with the low-skilled work visa research project that we are embarking on is, for example, the situation of tomato pickers in America.

In Florida there is something called the Coalition of Immokalee Workers. What the regulatory framework looks like there, very briefly, is that there is a code of conduct that all the big retailers have signed up to. If you are a tomato grower, you need to have signed up to that code of conduct or you cannot sell your produce through the big retailers. What that code of conduct has—it is not just some airy fairy document, it is enforceable—is mandatory collective organisation, so those workers are collectivised because it is recognised that that gives them some security. Secondly, all labour hire companies are licensed through that process. They have to be registered. Thirdly, there is a comprehensive auditing process, so tomato growers are audited for their employment practices, not just through paper but through someone visiting them. So if you had a low-skilled work visa, perhaps under the 457s employers would have to give money to training and investment. As part of this, you would recognise that money needs to be given to enforcement. So maybe we could look at the way some of the other countries do this.

Senator RICE: I you were then shifting to that visa, our current student work visas and working holiday makers would obviously have much stricter controls.

Dr Howe : It has limitations, yes. That is a good point. You are right—and we outlined this in our article—you would have to have some control. So you would get rid of the second-tier, 88-day requirement in a regional location. As Natalie James showed, that just creates incentives to go into this work in a remote location. So you might say that the work that working holiday makers and international students have to do is confined to capital cities, not remote locations, or you have some regulation around that.

Senator RICE: And if they wanted to do anything else, they would have to apply for a temporary low-skilled visa.

Dr Howe : Exactly, yes.

Senator RICE: Thank you, Dr Howe.

CHAIR: When I read about the low-skilled visa, I did a sharp intake of breath.

Dr Howe : Absolutely, and we felt very nervous putting that idea on the table.

CHAIR: But I like this idea of labour market testing and skill shortages being determined by a robust—

Dr Howe : And independent kind of mechanism.

CHAIR: Yes, an independent group. I think that has got some merit. I like the point that you made that, just because there is a shortage, that does not automatically mean that you go to a visa worker. So I am just wondering if you have done any more work or can point us in the direction of how you would build in those protections so that it is not automatic that the first port of call is a visa worker.

Dr Howe : The way these—I have written a couple of articles on this and I spoke to John Azarias at length when he was writing Robust new foundations. The way you do it, I think, is similar to the way the UK does it: you have an expert commission that is responsible for compiling the occupational shortage list but it is nuanced. For example, in the UK when the aged-care sector said, 'We don't have enough workers. We need to go to temporary labour migration', the MAC did an economic and legal analysis of the framework. The answer they came up with was not that we should go to temporary labour migration to fill this skill shortage. They said, 'We need a greater investment in the wages and conditions for aged-care workers, because the reason British workers are not doing this is that the vocational requirements are up here and yet the wages are here, so of course there is no-one wanting to do this work.'

CHAIR: It is exactly the same here.

Dr Howe : So the response they gave to government—and only the MAC could do this; the MACSM will not do this in Australia because they are not independent enough to do this and they do not have the economic resources to do it—was, 'We do not recommend you adding this occupation to the shortage list. We think you need more money in this sector to increase wages.'

CHAIR: Before I became a senator I was a union official with United Voice looking at low-paid occupations. One of the calls we often had in the aged-care sector was, 'We need to get visa workers in.' Under the Labor government that was restricted because it was below the threshold. But the reality is, as you have just identified in the UK, that these jobs in Australia do not offer a living wage. So it seems to me that the fix is to increase the wage and also break down some of the conditions—that employers only want those workers to do 30 hours a week and so on—that make it physically impossible to make a living wage. There is this desire to look after and cater to the Australian labour market, whereas if you—it seems to me that we need a whole system and not a partial system. You are undertaking some work in a certain part of the Australian economy looking at this low-skilled visa worker. But without strict guidelines we will then have visa creep: suddenly we will see visa workers in aged care, in child care, in hospitality—all low-paid sectors that it is very hard to make a living wage in now. I spoke to some backpackers yesterday from Taiwan, and you are right about the same thing with the Chinese workers: $14 an hour is attractive to them because in Taiwan they get $4. Without comprehensive strict adherence we will see the creeping of these low-skilled workers and suddenly we will see our service sector, which is low paid in Australia, awash with—

Dr Howe : Yes. It embeds an employer demand for this temporary workforce. You are absolutely correct that there is a danger with the low-skill work visa idea being a slippery slope and that inbuilt protections at the beginning will get eroded over time. The research project that we are looking at doing is specifically for the horticulture industry, but it is a concern that then that visa would be used in other areas to entrench low wages and conditions in the service sector. Really the only proper solution is to have a public conversation about what we expect to be the Australian standard and in which industries we are okay with having temporary migrant workers. The way you get that is through, I think, an expert commission that produces this information to the public and does it on a regular basis, which then forces politicians to respond to that information. It is just evidence based information. We can then have that conversation: 'Are we going to import temporary migrant workers for this skill shortage, or is it a recruitment difficulty or a labour shortage—is there a reason here why employers are saying there is a skill shortage but there really is not one?' It is a really difficult problem and I think governments like to have quick fixes. But if we want to do it right we really need independent evidence based data, and the only way you get that is through a proper expert commission.

Senator McKENZIE: Have you factored into your analysis the lack of labour mobility, which seems quite unique within the Australian context? We do not travel for work in the same way the UK does, the same way Europeans do and the same way North American do et cetera. Is that something you have considered?

Dr Howe : Absolutely, and I think that is why we are prepared to consider the low-skill work visa idea with the horticulture industry. We know that those growers are vulnerable. Even if they really try to incentivise local workers to go to those places, it is really difficult for those growers to get those workers.

Senator McKENZIE: The number of workers at that seasonal—

Dr Howe : Absolutely. We recognise that there are some employer issues here. As an academic, one of the approaches we try to take to policymaking is a sort of consensual bipartisan approach. We also know that the present system of meeting labour shortages for growers is inadequate from a labour law perspective. We are sending those workers into vulnerable situations en masse and we are turning a blind eye, and it is only when things like Four Corners shed a light on them that we do something.

Senator McKENZIE: Or, and I have to say it again, the National Party's Keith Pitt—a year before the Four Corners program.

Dr Howe : I have been writing about these things for years and, suddenly, when the ABC gets involved we all care.

Senator McKENZIE: So, Dr Howe, it is not a significant proportion of producers who are seeking to exploit workers?

Dr Howe : Absolutely, I agree. I know many would have the desire to do the right thing, but there are systemic issues to do with migration intermediaries, labour hire companies and the countries of origin that these visas are coming from. Even though most growers—

Senator McKENZIE: So demonising farmers in this conversation is not the answer.

Dr Howe : I agree with that. But I do not think that is what anyone wants to do here. I think we need to deal with the systemic issues, and I commend the committee for taking the time to do that.

CHAIR: Thank you very much.

Committee adjourned at 14:07