Fruit picker wages - it's complicated

Whoa there - ALP IR shadow Tony Burke says farm labour issues are more complicated than minimum wages

Anticipated farm labour shortages have been the hot topic across the Flow family since the start of the year, but November took off on a different front - a seismic wage decision that will shift horticulture's tectonic plates.

Farming groups in New South Wales, Victoria and South Australia have been complaining that the COVID-19 pandemic restrictions, particularly international travel bans, made it very difficult to secure labourers for the spring harvest.

Whilst South Australia was quick on its feet - aided in no small part by a state government that fortuitously contained COVID-19 better than its eastern counterparts - to, relatively speaking, secure workers and the accommodation necessary for their harvests.

Indeed, federal agriculture minister David Littleproud has twice told Flow listeners South Australia has the 'gold standard' for bringing seasonal workers in during the pandemic.

With their statewide lockdowns, Victoria and New South Wales were not only behind the pace, but lacked the momentum needed to beat the 2021/22 harvest clock.

After enquiries by Flow, NSW agriculture minister Adam Marshall landed on the idea of an 'eastern agricultural task force' featuring the eastern states - arguably, too little too late but nonetheless a laudable initiative.

Two major federal events in November changed the game, the negatives of one most likely outweighing the other.

In the first week of November, the Australian Workers Union came out of the gates early Monday morning crowing about their win in the Fair Work Commission imposing, in short, a minimum wage under the horticulture award.

The decision did away with 'piece rates' that, in effect, saw workers paid for each piece of fruit they picked.

Federal Member for Mallee Dr Anne Webster told Flow on Friday, the current system saw productive workers rewarded, and provided a financial disincentive to the unproductive worker:

“Farmers are rightly infuriated by this, this is once again a unionised answer to a problem that is not everyone, it is a small number of people who absolutely need to be brought before the law with regard to how they treat workers, there’s no question about that.”

“Nobody wants to see injustices done and I certainly don’t, but to have producers having to pay people $25 an hour for a full day’s work when they may sit down half the day or just simply not put their back into it – it is a problem.”

“Farmers need people to work to get these crops off and this is a serious backwards step for producers.”

On Thursday, federal ALP industrial relations shadow minister Tony Burke said paying a minimum wage to fruit pickers wasn't complicated:

“I remember when all this started blowing up we put the question to the government and Anthony Albanese asked: is it ever okay for someone to be paid less than the minimum wage? And the response from the government was ‘oh it’s complicated.”

“It’s actually not complicated and that’s what the fare work commission has decided here.”

AWU national secretary Daniel Walton had mentioned the farm labour shortage on Monday, saying:

"The so-called labour shortage in fruit picking has, in large part, been created by greedy employers destroying Australian working conditions. This decision is a huge step along the path to fixing this."

When pressed on Mr Walton's comments, Mr Burke's penchant for simplicity suddenly evaporated:

“There’s a lot of complex issues with the labour shortage but certainly if you are one of the employers who has only been offering $3...$4...$5 an hour effectively ... then it’s a bit much for them to say ‘I can’t get local workers’.

As Flow's Wayne Phillips said on the Morning Show on Friday, Mr Burke seems to be cherry-picking on complexity.

The other major decision affecting farm labour in early November was the High Court accepting the argument of British backpacker Catherine Addy. Recent working holidaymakers to Australia could be entitled to a tax refund, with the High Court deeming the government's backpacker levy was discriminatory.

The old adage is that too many cooks spoil the broth, and the then Abbott government was too clever by half introducing a tax measure it thought would sail through parliament as it targeted foreign workers. Instead, it struck the rocks of a caustic liquorice allsorts Senate crossbench, copping particular stick from independent senator Jacqui Lambie. In her first political incarnation, the Tasmanian firebrand attacked then novice National Farmers Federation president Fiona Simson for not standing up for farmers by backing a backpacker tax at some level, rather than reject it outright. The 'budget repair' measure ultimately passed through some horse trading, under the watch of by then prime minister Malcolm Turnbull. People on working holiday visas were required to pay a 15 per cent levy on income up to $37,000 under the tax measure that passed in 2017.

In late October, the High Court found the levy imposed a more burdensome tax requirement of Ms Addy because of her nationality. Australian taxpayers are entitled to a tax-free threshold for the first $18,200 earned. The backpacker rule was deemed to contravene a treaty with the United Kingdom requiring British nationals not be treated more onerously than Australians for tax purposes.

Backpackers have been a mainstay of fruitpicking across the nation, with an estimated 50,000 shortage of such workers during the pandemic.

The National Farmers Federation were sticking to their conditional support for a backpacker tax in comments to Flow on Thursday, with CEO Tony Mahar saying::

"While we recognise the need for backpackers to contribute something during their stay, the NFF never supported a tax rate that would serve as a deterrent to choosing to holiday and work in Australia.

"Today’s High Court decision will likely provide additional confidence to young people considering Australia as a backpacking destination.

It is unlikely that any gains on the backpacker return front will outweigh the impact of the AWU's minimum wage case for horticulture workers.

Mr Walton expected the federal government to begin scaremongering about the horticulture award minimum wage decision, saying on Monday:

"I expect the federal government will join the NFF in fear mongering about this decision. After all they have just hatched a plan to bring in even more easily exploited workers from South East Asia. But now those workers can at least know if they're being exploited. A clear floor has been put in place.

"This decision is not just a huge win for our union and for workers, but for regional and rural Australia. Workers who earn more, spend more in local shops. They pay tax. They rent local houses and contribute to regional communities.

Dr Webster said Mr Walton should join her visiting horticulturalists in her electorate, some of whom ploughed their peaches into the ground due to an inability to find workers to pick the fruit last season:

“I said to Dan Walton ‘listen mate, until you sort out undocumented workers, illegal non-citizens who are working who are genuinely exploited, don’t talk to me about this because it’s certainly not in the producers’ interest in my electorate.'

“I would invite Mr Walton to pop out to Mallee anytime and I can take him around and just have a look at this issue, we’re in full harvest season coming up now and farmers are pulling their hair out, this is a very serious situation and it will impact on our GDP going forward...this is going to impact everyone and this decision is not a good decision.”

As politicians posture and union leaders continue their class warfare, farmers will be too busy getting the crop in to even wonder whether policymakers will be any help getting them the workers they'll need on-farm in 2022/23.

They'd be well justified to sell up, trash their permanent plantings for something they can harvest mechanically, or explore technology to get their existing crops off.

A minimum wage for hard-to-secure farm workers has brought that futuristic equation closer to reality and, in turn, reduces the number the jobs available in horticulture longer-term.