In early February the Liberal Party released a discussion paper ‘Vision 2030’ floating the idea of tax incentives to lure workers to northern Australia. In this blog post Dr Joanna Howe investigates the migration and labour law challenges associated with this proposal.
Whilst the Liberal Party discussion paper primarily canvasses the idea of tax incentives to promote business investment in northern Australia, this idea has also been more broadly developed by Gina Rinehart’s powerful lobby group Australians for Northern Development and Economic Vision (ANDEV).
ANDEV’s vision is that to spur on business investment, northern Australia would be lightly regulated with low tax rates, fast-track approvals of permits for construction and expanded use of low-skilled foreign workers.
The central premise of both the Liberal Party’s discussion paper and ANDEV’s proposal is that northern Australia would be freed from the shackles of government regulation. However, the last time Australia’s temporary migrant worker program was deregulated during the years of the Howard Government, the subclass 457 visa was associated with numerous cases of exploitation. ‘Exploitation’ occurs when 457 visa holders are treated differently, both in terms of pay and conditions, and/or in terms of process and dignity, relative to standards applicable to Australian employees. A survey of salaries paid to 457 visa holders from a 2003–2004 report, found that almost a third of 457 visas granted onshore between November 2003 and February 2006 were approved at or below the Minimum Salary Level of $35,828. In terms of actual salaries paid to 457 visa holders, 25% of the trades group reported average incomes of less than $35,000 and one third of professionals reported incomes under $50,000.
Numerous cases were recorded of subclass 457 visa holders receiving significantly less remuneration than was their entitlement. In one case where the employer was eventually fined $18,200, an Indian chef who spoke no English and arrived in Australia with no money, was not paid, despite working at least 14 hours a day, 7 days a week for 40 consecutive days. In another case, the employer was ordered to pay fines exceeding $50,000 and to repay two Philippine restaurant workers who were not paid overtime, public holiday pay, annual leave or penalty rates for evening and weekend work. In a problem common to many semi-skilled workers on 457 visas, the employer made unauthorised and arbitrary deductions from the employees’ weekly wages. Another case involved four Chinese workers who spoke very little English, and were found to have been underpaid $93,667; and in yet another case, four Korean tradesmen were also found to have been underpaid and exploited on account of their vulnerable labour market position as non-English speaking 457 visa holders. A company that employed a number of tradesmen on 457 visas was found at first instance to be guilty of exploitation and manipulating the vulnerable position of these workers, who ‘would sign anything’ because they were ‘frightened of being sent back’.
The potential for abuse of subclass 457 visas was noted by a US State Department report in 2007 which suggested that conditions for some foreign workers in Australia on the 457 visa ‘amounted to slavery, debt bondage and involuntary servitude’. This was dismissed by the then Minister for Citizenship and Immigration as ‘ill-informed in respect to the purpose of the 457 visa and the obligations placed on employers who use the scheme’.
Despite this denial, many more abuses were uncovered by the Deegan Review, which led to the Labor government passing a series of legislative reforms to improve the integrity of Australia’s foreign worker program.
The problem for the Liberal Party and for ANDEV is how to design a deregulatory oasis in northern Australia without it descending into a guest-worker ghetto. Australia’s recent history has illustrated that low and semi-skilled migrant workers aren’t in a position to bargain for wages and entitlements. Their vulnerability is compounded by their need for an employer to sponsor their continued residence in Australia.
So a visa scheme that attracts low and semi-skilled workers cannot be lightly regulated. There need to be inbuilt safeguards to protect these workers from exploitative treatment. Such a scheme cannot be designed purely with business in mind, because reducing red tape will benefit business but enable exploitative workplaces to proliferate.
Faced with this quandary, some would argue against low-skilled guest-worker schemes altogether. American political philosopher Michael Walzer regards anything short of permanent migration as morally unacceptable and as the ethical equivalent of a ”family with live-in servants”.
Nonetheless, low-skilled guest-worker schemes can work. For example, the Pacific Seasonal Worker Scheme has been effectively designed and piloted to prevent a broad spectrum of undesirable labour practices. Whilst many argue this scheme has placed the regulatory burden too high, the absence of evidence of exploitation associated with this scheme indicates that regulation is essential to ensure workers receive adequate rates of pay and appropriate living and working conditions.
Other essential aspects of a temporary migrant worker scheme include: low and semi-skilled migrant workers need to be made aware of their workplace rights and whom they should contact in the event of safety problems at work. Significant resources must also be allocated to government agencies monitoring workplaces and enforcing labour standards. Measures such as these can enable business to manage skill shortages without workers becoming victims.
So there is no reason to flatly reject the Liberal Party’s discussion paper and ANDEV’s proposal raising the idea of developing northern Australia. Temporary migrant worker programs can work but need to be properly conceived and designed. In considering this idea, we need informed debate: especially on the deregulatory thesis underpinning it.
To read more from Dr Joanna Howe, see her recent opinion piece in The Age, Employ Foreign Workers without Exploitation. For a more in-depth exploration of the subclass 457 visa scheme, see: J Howe (2010) ‘The Migration Amendment (Worker Protection) Act 2008: Long overdue reform, but have migrant workers been sold short?’ 24 Australian Journal of Labour Law