COMMONWEALTHOFAUSTRALIA

ProofCommitteeHansard

JOINTSTANDINGCOMMITTEEONMIGRATION

SeasonalWorkerProgram

(Public)

WEDNESDAY,28OCTOBER2015

MELBOURNE

BYAUTHORITYOFTHEHOUSEOFREPRESENTATIVES

[PROOFCOPY]

JOINTSTANDINGCOMMITTEEONMIGRATION

Wednesday,28 October2015Members inattendance:Mr CraigKelly,MrsMarkus, Ms Vamvakinou.

Terms ofReferencefortheInquiry:

To inquireintoandreport on:

TheSeasonalWorkerProgramme.Inconductingitsinquiry,theCommitteeshallhaveparticularregardto:

  • Theroleofseasonalworkersinthehorticultureindustry;
  • ExpandingtheSeasonalWorkerProgrammetoothercountriesandsectors;
  • Thecurrentandprojectedfutureworkforcerequirementsforsectorsthatmaybenefitfromseasonalworkers;
  • TheimpactontheAustralianlabourforceofthecurrentandprojectedSeasonalWorkerProgramme;
  • Themeritsandchallengesofincreasedrecruitmentofoverseasworkers,inparticularprovidingincreasedaccessforwomenandyouthworkers;
  • TheroleoftheSeasonalWorkerProgrammeinsupportingdevelopmentassistanceinthePacific;
  • Anylegislativeandotherimpedimentsinattractingseasonalworkers;
  • Thevisaregimeforseasonalworkers,includingcomplianceandrelatedissues.

WITNESSES

BARTOLO, MrMark,Chief Financial Officer,Seasonal LabourSolutionsPtyLtd...... 30

CAMPBELL,MrNoel,President,AustralianDairyFarmers...... 71

DOLLISSON,MrJohn,Chief ExecutiveOfficer,Apple andPearAustralia; andDeputyChair,VoiceofHorticulture 1

FANKHAUSER, MrBrian,Director,SeasonalLabourSolutionsPty Ltd...... 30

FARROW, MsAnnie,IndustryServices Manager,AppleandPearAustralia...... 1

FINGER, MrsSusanElizabeth,Director,VernviewPtyLtd...... 21

FRYSZER, MrMichaelJohn,ManagingDirector,Connect Group,Seasonal Workers Australia...... 66

HAYES, MrRobert John,StateManager,HarvestLabourServices,MADEC Australia...... 57

HELLWEGE, MrShane,GroupManager,IndustryPeopleandCapability,DairyAustralia...... 71

LOSBERG,MrDavid,SeniorPolicyManager,AustralianDairyFarmers...... 71

MOSS,Mr Jonathan,Manager,MossmontNurseries...... 41

MULCAHY,MrRichard,Chief ExecutiveOfficer,AUSVEG...... 12

SHIPSTONE,MrTim,Industrial Officer,AustralianCouncil of TradeUnions...... 52

WHITE, MrAndrew,DeputyChief ExecutiveOfficer,AUSVEG...... 12

DOLLISSON,MrJohn,ChiefExecutiveOfficer,AppleandPearAustralia;andDeputyChair,VoiceofHorticulture

FARROW, MsAnnie,IndustryServices Manager,AppleandPearAustraliaCommitteemetat 09:16

CHAIR(MrsMarkus): IdeclareopenthispublichearingoftheinquiryintotheSeasonalWorkerProgram

whichisbeingconductedbytheJointStandingCommitteeonMigration.TheSeasonalWorkerProgramisanimportantmechanismthatsupportsdevelopmentinthePacificwhilealsomeetingidentifiedlabourshortageswithinAustralia'shorticultural industry.

Establishedin2012,theprogramnowprovidesover3,000seasonalworkerstohorticulturalsectoremployersincludinggrowers,contractorsandlabourers.ThroughthisinquirythecommitteewillexaminetheSeasonalWorker Programanditsscopeforexpansion,howtheprogramaffectsAustralianjobs,waysinwhichtofacilitateaccessforoverseaswomenandyouthworkers,howtheprogramsupportsdevelopmentinthePacificandthevisaregimefor seasonal workers.

TodaywewillhearfromVoiceofHorticulture,Appleand PearAustralia,Vernview,SeasonalLabourSolutions,MossmontNurseries,theAustralianCouncilofTradeUnions,MADEC,ConnectGroupandAustralianDairyFarmers.InowwelcomerepresentativesfromtheVoiceofHorticultureandAppleandPearAustraliatotoday'shearing.

I wishtoadviseyouthatingivingevidencetothecommitteeyouareprotectedbyparliamentaryprivilege.Itisunlawfulforanyonetothreatenordisadvantageawitnessonaccountofevidencegiventothecommittee,andsuchactionmaybetreatedbytheSenateortheHouseofRepresentativesasacontempt.Itisalsoacontempttogivefalse or misleadingevidencetothecommittee.

Thesearepublicproceedings,althoughthecommitteewillconsiderrequeststohaveevidenceheardincamera.Ifyouobjecttoansweringaquestion,youshouldstatethegroundforthatobjectionandthecommitteewillconsider thematter.

Finally,Iwishtoinformyouthattheseproceedingsarebeingbroadcastandatranscriptoftheproceedingsisbeingmadeandwillbeprovidedtoyou.Thankyouforyoursubmissionstotheinquiry.Inowinviteyoutomakeopeningstatementstothecommitteebeforeweproceedtoquestions.

MsFarrow:Thankyoufortheopportunitytoaddressyouthismorningandfortheopportunitytoprovideasubmission.AppleandPearAustraliaLtdrepresentscommercialappleandpeargrowersacrossthecountry.Wehave about450 applegrowersand 150 pear growers. Ourindustryistotallydependentupon a seasonal workforce.Thereisagreatneedduringtheharvestperiodforsubstantialnumbersofunskilledlabour.ThatperiodislateJanuarythroughtoMay, depending upontheregionandwhat varietiesa growermayplant.

Weneedaseasonalworkforce.Wedonothavenumberstosupportwhatproportionofthatseasonallabourforceisprovidedbypeoplewhoareeitherbackpackersorseasonalworkers,butmyroughback-of-the-envelopeguesswouldbethataboutfour-fifthsofthepickingwouldbedoneby backpackers.Wereally needthecontinuation of theworkingholiday-maker visa scheme in order to beabletopickthecrop.

Appleand Pear AustraliaisfullysupportiveoftheSeasonalWorker Programfortwomainreasons.ThefirstisthattheSeasonalWorkerProgramallowsworkersyear-inyear-outtoreturntothesameproperty,oratleastthesameindustry,andthatgivesgrowerscomfortandstability.Thosepeoplearealreadytrained.Theyknowtheorchards.Theyknowthatcrop.Secondly,andmoreimportantly,theseasonalworkershavebeenfoundtobemoreproductivethanworkingholiday-makers.Wehavefoundthatanecdotally,buttheABAREstudy,whichwerefertoinourwrittensubmission,clearlyindicatesthatseasonalworkersareabout20percentmoreproductivethanotherlabour.Thatisagreatthing,but,unfortunately,withinourindustrywehaveverylowparticipationintheSeasonalWorkerProgram.Ithinkthatisprobablyreflectiveoftwothings.Oneisthatthereisaperceptionthattheprograminvolvesconsiderablecost.Secondly,Ithinktherehasbeenalackofpromotionnotonlybygovernment but also bybodies such asourselvesabout thebenefits of theprogram.

Inoursubmission,Iwentintosomedetailabouttheperceptionsoftheprogrambut,justbroadly,thereisaperceptionthatthereisalotofredtapeinbecominganapprovedemployer.WhenIlastspoketotheDepartmentofEmploymenttherewereabout19pagesofquestions—someveryrepetitiveandverydetailed.Whenyouhavetospendthetime and effortto fillouta 19-pagedocument and submit itmonthsinadvancefor a seasonal worker,theworkingholiday-makers,thebackpackers,aremuchmoreattractivethantheseasonalworkeryouhavegottofilloutthoseformsfor.Youcouldjustgetabackpackeroffthestreet;youdonothavetofillouta19-pagedocument.Thereisalsothisperceptionthatthelabourmarkettestingthatyouhavetogothroughwiththe

seasonalworkerisveryonerous.Youhavetoadvertiseand,ifpeopledoapply—whichisnotalwaysthecase—youthenhavetointerviewthemanddeterminewhytheyarenotsuitableandthenjustifythatbacktothedepartment.Onceagain,fortheworkingholiday-makersyoudonothavetodothat.Sotheworkingholiday-makersarefar cheaper thantheseasonal worker.

Therearesomeothercoststhatgrowersincurtoemployseasonalworkers,andthereisaperceptionthattheyarestillveryexpensive.TherehavebeenanumberofreformsbytheDepartmentofEmploymentinthelast12monthsorsothathaveactuallyreducedthosecosts,butourgrowersarereallynotawarethatthecostshavebeenreduced.Forexample,younowonlyneedtoincurthefirst$500ofthetransportcost;whereaspreviouslyagrowerwasliableforallthetransportcostsinvolvedinnotonly gettingthemtoAustraliafromthecapitalcityofthePacificislandtheycomefrombutalsoingettingthemfromanAustraliancapitalcitytothegrowingregion,becausemore ofour growingregionsare notnear themetropolitanregion. Nowyou can actuallyrecover from theemployer'swages anythingover thefirst$500.

Thereareothercostsinvolvedinseasonalworkersthatyouwouldnotincurwithabackpacker.Forexample,youneedtolookaftertheiraccommodation,youneedtotakethemintotheregionalornearesttowntoallowthemtodoshopping andyouneedtoprovidethem withavenuestoattendchurch orundertakesocialactivity onaweekend.Withabackpacker,theycomeinandtheywork.Sometimestheymightliveonthefarm,butyouarenotresponsiblefortheiraccommodation,theirsocialamenityoranythinglikethat.Sothereisthisperceptionthatitiseasiertogetaworkingholiday-maker,abackpacker,thanitistoemploytheseasonalworker.Thatsaid,Istillbelievethat,ifwewereabletoeducateourgrowersbetter,theywouldprobablyrealisethatthat20percentgreater efficiencyof theseasonal worker wouldmorethanoffset those costs.

Iwasunabletofindverymanygrowersinourindustrywhoactuallyusetheprogram—fewerthanfiveoraboutfive.I haveprovidedcommentswithinoursubmissionfromtwoofthose;athirdyouarehearingfromlaterthismorning,Vernview,providedtheir ownsubmission.Ido notknow if MrDollissonwantsto add a fewthings.

MrDollisson:Iwouldreflectsimilarcommentsacrosshorticulture.Itisagoodopportunitywithseasonalworkers.Wheretheyhavecomein,theyhavebeensuccessful.Thereisnodoubtthat,ifyoucanbringbackthesameworkforceinthesecondyear,you do not havethere-educationprocessto go through.

CHAIR:Whichsome ofthecasestudies demonstrate.

MrDollisson:Clearly.Whetheryouarepickingapplesorpickingotherfruit,itisnotaquestionnecessarilyofspeed;itisaquestionofqualityandspeed.Ifwehavesomeonecomeinandpickapplesveryfast,itactuallycostsusmoney.Whentheydropanapple,theappleisunsaleable;iftheydamageanapple,theappleisunsaleable.Sounderstandingthequalityandhavingrespectforthefruitisveryimportant,andIthinktheybringthatskill.Oneoftheotherthingsthatisimportantforusinexpandingitintobroaderhorticultureitthattheislandersarefantasticatpickingapples,onionsandlargerfruit.Unfortunately,theyhaveverybigfingersandtheystruggletopickberriesandsomeoftheothersmallerfruit,soexpandingthattosomeoftheAsiannationswould be beneficial tohorticulturegenerally.

So,byandlarge,itworks,but,atthemoment,itisaloteasierforthevastmajorityofourgrowers—rememberingthat,inthecaseofapples,ouraverageorchardis11hectares.Theydonothavealargewindowtoemploypeople,soitdoesnotmakealotofsense.Ifyouhavepeoplecominginandgoingwithinamonth,thereisthecoststhatMsFarrowhasoutlinedwiththeseasonalworkersprogram,sothey optforthebackpackerstodothatwork.Similarly,whentheyneedsomeshort-termassistancetoprunelaterintheyear,inJune-July,andsomeshort-termassistancetothinoutthebudaroundthistimeoftheyear,itiseasyjusttogoandgetbackpackers,whoaremorereadilyavailable.Theyarenotasreliable,buttheyaremorereadilyavailable,andthatiswhyweareverykeentoseethecontinuationoftherenewalofthebackpackers—because,again,ifyoucangetthosesamebackpackersbackagain,youdonothavethere-educationprocess,andthequalityisobviouslyveryimportant inthat process.

CHAIR: Iimaginewithpruningit would be veryimportant to get it right.

Mr Dollisson:Correct.It would be a veryexpensiveprocessif it iswrong.

MsVAMVAKINOU:Presumably,whenyou say'renewal'youmeanthesecondyear.

Mr Dollisson:The secondyear,correct.

MsVAMVAKINOU: Doyou knowhow manyofyourbackpackers do come back for thesecondyear?

MrDollisson:Icouldnotputafigureonit.Itdependsalotontheorchards.InalotofourorganicorchardswheretheWWOOFschemeworks, a veryhighproportion of those wouldcome back.

MsVAMVAKINOU: Theygo awayinthefirstyear and thencome back againinthesecondyear?

Mr Dollisson:Yes.

MsVAMVAKINOU: Whenyou say'high', how high do youmean?

Mr Dollisson:Icould not put a figure on that.

MsVAMVAKINOU: Doyouhave anyfigures at all?

Ms Farrow:No, wedonot.

MsVAMVAKINOU:Nofigures?

Mr Dollisson:No.

MsFarrow:No,butIthinktheremighthavebeenastatisticprovidedintheAUSVEGsubmission,soyoumayaskthemaboutthehorticulturestatisticonrepeatbackpackers.Ijusthaveavaguememorythattheirsubmissionmentionedsomethinglikethat—andthat would be across horticulture.

MsVAMVAKINOU:Iaminterestedinstayingwiththesubjectofbackpackersversusseasonalworkers.Igetthatbackpackersarecheaperandthattheyarenotreliable.Regardingthelabourmarkettestinginrelationtolocalemployment,weareallfamiliarwiththedifficultiesthere.Backpackersdonotgetinterviewed,sono-onehasanissuewiththeircapacitytodothejob;theyjustgetpickedupandtheydothejob.MsFarrow,Ithinkyousaidthatthelabourmarkettestingrequiresyoutostatewhythepeopleyouhaveinterviewedareunsuitable.Wouldyoudescribetomesomeofthepeopleyouinterviewwhoarelocalsandyoufindunsuitable.Idonotmeanyoupersonally, butdo youhave an understandingof what that unsuitabilityis?

MsFarrow:Firstly,Iwillstatethatoftenintheseregionalcentresgrowersdonotgetaresponsetoanyadvertisements.Whentheydogetresponses,oftentheyareNewstartallowancepeoplewhoarereallyinterestedinundertakinganinterviewtocomplywiththeirNewstartrequirementsratherthanactuallylookingforajob.Theycomeouttobeinterviewed.Thereisnounderstandingofwhatpickingfruitactuallymightmean.Theygivea—

MsVAMVAKINOU:But backpackersdo notnecessarilyhaveanunderstandingeither,dothey?Theydonotcomeherewith an understanding ofhow topickfruit,becausemostof themwould be holiday-makers?

MsFarrow:Iamnotsureaboutthat.AmongsttheTaiwanesecommunitythereisabignetworkof,'I'lldotwoyears,thenthenextyearmysisterwillcomeoutanddotwoyears,andthenmy cousin.'Thereisabigfamilynetworkwhereyou end up employinghalf thefamily, who come outas theyget older and eligible.

MsVAMVAKINOU:Can I juststopyouthere,because thatisveryinteresting.The Taiwanesethatyouhaveidentifiedare not necessarilyfittingthepicture of theEuropeanbackpackers.Sothetermbackpackersisbeing—

Ms Farrow:Well thebackpacker visa isfor 18-to30-year olds;it is notjustfor European countries.

MsVAMVAKINOU: Iknow it isnot, butIamtrying to geta profile of different regions.

Ms Farrow:Thereis a Koreancohort,thereis a Taiwanesecohort andthentherearetheEuropeancohorts.

MsVAMVAKINOU:AretheTaiwaneseandKoreanscomingoutheretowork?Aretheyclosertotheseasonal worker people or are theyclosertothebackpackerswhocomeherefora holiday?Youhavetalked aboutexpandingintoAsia. Iamjusttryingtodevelopthat a bit.

MsFarrow:MyunderstandingisthattheyarejustliketheEuropeans.TheycomeoutheretopractisetheirEnglishandhaveaholiday,andtheycanworkuptoacertainlimit.Theycandothattwice.Somegrowersactuallyquitelikecertainethnicgroups.TheTaiwaneseareconsideredhardworkers.They becomequiteclosetotheorchardist'sfamilyand,asIsay,theirsisters,brothersandcousinsallendupcomingatsomestage.Whilstthatbackpackermayonlyhavetwoyears,theyhavetoldtotheirsiblingorcousinhowhardtheworkis.SoIdothinkthatthebackpackerscomeintothecountryknowingthatitisgoingtobeworkingpickingfruitin35-degreeheatanditisuncomfortable.MaybeBatloworSheppartonisnotthemostglamourousplaceforthemtoliveorwork;itwouldbesoforeigncomparedtoTaipeiorsomewhere.ButIthinkthattheyknowwhatthey areinfor.IwouldimaginethatquiteafewoftheEuropeanbackpackersknowalso.Particularlywiththeinternet,thereisquiteasubstantialknowledgebasethere.Theyallknowhowtogetontheharvesttrailandhowtofollowthatharvesttrailupthecoastandbackdownagain,dependingupontheweather.Sotheymightallstartoffinthenorth.Thewetseasonwillstartandtheywillcomedowntothesouth.Theywillworkpickingthroughthetrailand thenheadbackupnorthagain.

MsVAMVAKINOU:LetusgobacktoNewstart,becausewearetryingtoseehowallthesethingscometogetherandwhatimpactstheyhaveonthelocaljobmarket,especiallyinrelationtotheNewstartprogram.SothereseemstobeanorganisedpaththatisformedinrelationtoTaiwanandKorea,bythesoundsofthings;itmaybeinadvertent,butitseemstohaveformed.ThebackpackerswhocomefromEuropearelovelyyoung

peoplewhowanttoseeAustraliaandarehappytopickafewapplesalongtheway,buttheirintentionsaretomovearound.

Ms Farrow:As aretheTaiwanese.

MsVAMVAKINOU:Okay,fine.So,fortheNewstartpeoplethatcomealongandgetinterviewed,youhaveanecdotal evidencethat it isjusta tickoff?

MsFarrow:SomegrowersdosaythattheNewstartallowancepeoplearetherereally only totickoffontheircompliancerequirements.

MsVAMVAKINOU:Sotheygetrejected,becauseifyouemploythemtheyhavetobeemployed,isthatcorrect?

MsFarrow:Yes,oncetheyrealisewhatthejobinvolves.Andtheemployerhastomakeacall,'Isthispersongoingtobeabletopickmyapplesandtakethecarethattheyneedtotake?'AsJohnexplained,someapplesarereallysensitive. You haveto be abletopickthemwith a lotof care. Sotheyare not goingto be suitable.

MsVAMVAKINOU: So theyaredeemedto be lessreliablethanbackpackers?

Mr Dollisson:Someareactuallyquite good, butyougenerallyknow after abouta day.

MsVAMVAKINOU:IwanttoascertainhowmuchofafairgotheNewstartpeoplegetintermsofemployment. That iswheremyquestionisgoing.That is whyIampursuingit.

MsFarrow:Onthewhole,Iwouldsaythatmostgrowersdonotgetanyresponseatalltotheiradvertisements.

MsVAMVAKINOU: But thereareresponses.

MsFarrow:Orthemajorityoftheresponsestheywouldgetwouldbefromuniversitystudents—'Oh,no,Ican't commit topickingfruit fromlateJanuarythroughtoMaybecauseI've got to be atuni inMarch.'

MsVAMVAKINOU: Theydo, that istrue,if theyareuniversitystudents.

MsFarrow:Growerssaythattheygetthatquitefrequently—thattheapplicantisreallyonlyafteraJanuary-Februaryjob. Theyare not suitable;you cannotemploythem.

MsVAMVAKINOU:DoyouhaveanyideaatallofhowmanyNewStartpeopleareinvolvedinthehorticultureindustry?Does anyoneknow?

Ms Farrow:No.

MsVAMVAKINOU: Anyfeelfor whether it isfive per cent,three per cent, 10 per cent?

Ms Farrow:No, but it is agood questionfor whoever runsNewStart toseewheretheyend up.

MsVAMVAKINOU:Youcanunderstandthattherearealotoflocalpeoplewhodonotgetopportunitiestowork.Wearetryingtofindoutwhyandhow.Thislinksinwithyourproposalforagreencardsystem,whichcarries withit thepossibilityof residencyinAustralia.Is thatright?

Ms Farrow:No, not necessarily.

MrDollisson:No.Itisjustanidentificationsystemtoverifythattheworkersweemployhavetherightvisaandtheyareawareoftheirrightsaboutwhattheyshouldbepaidandtheobligationsofacontractor.Thealternativeistoregistercontractors,whichisprobablyourpreference.Oneoftheotherconcernswehaveaboutrecruitingbackpackersisthat,ifyougotoMilduraandyouwanttoemploybackpackers,youcannotemploythemyourself,becausethecontractorshavegonetoallthebackpackersinMilduraandsaid,'Whoevercomesinherewewill guaranteeworkpickingoranges or whatever.'

MsVAMVAKINOU: Tellus about that,John.Aretheylabour hirecompanies?

Mr Dollisson:Theyarelabour hirecompanies.

MsVAMVAKINOU: Canyouexplaintheir role and what theydo and howtheyimpactinthisarea?

MrDollisson:They areasignificantcomponent.AsIsay,itisalmosthardtoemploydirectlybackpackersintheMilduraarea.Theyhavegonearoundandtheyhaverelationshipswithallofthebackpackingorganisations.Thosebackpackingorganisationsyoucanlogontoand,ifyouareanAsianoranislanderorsomeonewhowantstocomeoutoraEuropean,youarealmostguaranteedwork.Thereisnoguaranteeoftherightrate,butyouarevirtuallyguaranteedworkif youlockinwith a backpackingorganisation.

MsVAMVAKINOU: Andifyoudon't?

CHAIR:The labour hirecompanywouldtake a percentage?

MrDollisson:Thatiscorrect,andthatisourbiggestconcern.Iftherewasawayofregistering,controllingandmonitoringthelabourhirecompanies—thatisakeyconcernthatwehaveatthemoment.Itisoneofthereasonswegetalotofflak.Wecan'temploythemdirectly,andwewouldloveto,butwedonothavethatopportunityand soweareforcedto use labour hire.

MsVAMVAKINOU:Canyourecapthat?So thelabourhirecompanies control themarket for backpackers.

Mr Dollisson:Incertainareas.

Ms Farrow:Onlyincertainareas.

MsVAMVAKINOU:Andiftheyarenotregisteredwithalabourhirecompany,theemployercannot employthem.Isthat right?Whatif yousay,'I don't want a labour hirecompany, I want tofind a backpacker'?

MrDollisson:YoucandothatintheYarraValleyandyoucandothatinStanthorpe,wherewegrowourapples, but if you go tosomeof thecoreagricultural/horticultural communities, it is veryhard.

MsVAMVAKINOU:Andof course thelabour hirecompanies runthisfor a profit?Do theydeterminewagesand all sorts of things?

MrDollisson:Correct.Ourgrowersgooutoftheirwaytomakesuretheysigntheappropriatecontractandtheyareawareoftheobligationstheyhavetopaythebackpackersandtheyareawareoftheappropriatetreatment.Whether theydo thatornot isanothermatter.The unfortunatethingisthatour growersare on the hookforthat,butitisveryhardforustoenforcethatbecausethatlabourhirecompanywhichwasregisteredwhenwesignedthecontracthasprobablygone the next day.

MsVAMVAKINOU: Arethelabour hirecompanies a goodpresenceinall ofthis?

MrDollisson:Ithinkthelargerones,themoreprofessionalones,doaverygoodjob,butthereisanawfullotof questionableguys outthere.Andtheyarethe ones weneed tolicenseandpoliceappropriately.

MrCRAIGKELLY:Thereare450applegrowersand150peargrowers.IsthatAustralia-wideoryourassociation?

Mr Dollisson:That isAustralia-wide. We basicallyhavethemajorityasmembers.Wegrow inall sixstates ofAustralia—therearetwogrowingareasinVictoria,SheppartonortheGoulburnValleybeingthebiggestareawith24percentofapplesand95percentofAustralianpears.TheotherareaisdownintheYarraValley.StanthorpeisthecoregrowinginQueensland—aboutthreeandahalfhoursoutofBrisbane.AdelaideHills,RenmarkandtheRiverlandarethecoregrowingareasinSouthAustralia.PerthHills,Donnybrook andManjimupinWest Australia.Isthat it?

Ms Farrow:Tasmania andOrangeBatlow inNewSouthWales.

Mr CRAIG KELLY:What isyour spreadthroughdomesticsales and export sales?

MrDollisson:Forpears,itisabout90percentdomesticand10percentexport;apples,atthemoment,itisabout98percentdomesticandtwopercentexport.WewereasignificantexporterupuntiltheEuropeanCommunityclosedthedoorsonus.ThenwepushedourexportsintoIndiaandotherplacesandthenthestrongAustraliadollar justcrippled us inthose markets.

Mr CRAIG KELLY:Howaboutnowwhenthedollar isaround70c?

MrDollisson:Itiscomingbackandtheguysaregettingmoreencouragedtogetinthere.Butthereareanumberofissuesintermsofexports.Itisnotonlyaquestionoftheeconomicsmakingsense.Togiveyousomeidea,ourbiggestcompetitorintheSouthernHemisphereisSouthAfrica.Theyhavejusttakenalabourincreasefrom$8to$10aweek.Wearepaying$24anhour.Labouris50percentofourproductioncostsandabout40per cent ofouroverall salecosts. So labour is a significantcost factor.

Mr CRAIG KELLY: Thecost of$24 anhour isfor your pickers.

Mr Dollisson:Correct—pickersandprobablymostofthe factorystaff and packingstaff.

Mr CRAIG KELLY: What percentage of thefarmgatepriceislabour?

Mr Dollisson:50 percent.

Mr CRAIG KELLY:Wearedoubleour competitorsfromSouthAfrica.

Ms Farrow:No.

Mr Dollisson:Theyare $8a week.

Mr CRAIG KELLY:Sowearepaying $24 an hour whichequates to—

MrDollisson:Thereisahugedifference.Fortunately,ourqualityisahellofalotbetterandourcolourisahellofalotbetter.IthinkNewZealandarepayingaround$16to$17anhourversususat$24.Havingsaidallthat,wehavefoundwaystobemoreproductiveandwehavefoundwaystobemorecostefficient.Thatiswhyitissocrucialtohavethe seasonalworker programtobeabletoharvestour fruit.Butthathasmadeitverydifficulttoexport.Thatisoneoftheissues.Thesecondissueisthatwecannot getintoalotofmarketsbecausewedonothavetheprotocols.Wehavefreemarketaccess,particularlythankstotheworkthegovernmenthasdoneontheKoreanfreetradeagreement,theJapanesefreetradeagreementandtheChinese,butwecannotgetintoChinawithmainlandapples. We canthroughTasmaniabecauseit is a fruitflyfreearea. Thatis a part of theproblemwehavearoundBilpinand Hawkesbury.Wehavetofinda waytoaddressfruitflyandhavetheChinesegovernmentand other governmentsacceptthat coldtreatment on theseaeffectivelykillsfruit fly.So that is a bigchallengeforus.

Thisyearwillbeabouta100percentincreaseinourexportsoverthepreviousyearpartlybecauseofthedollar.

Mr CRAIG KELLY: Butyou sayit is off a fairlylowbase.

Mr Dollisson:Afairlylowbase.

Mr CRAIG KELLY:Andyou saythat inyears gone by,it was moresignificant.

MrDollisson:Goingbackitwassignificantlymore.Obviouslyintheseventies,eighties,ninetiesandthe2000swhenthedollarwentthroughtheroof,itmadeitvery,veryhard.Wealsohaveafairlyhealthydomesticprice,whichencouragespeopletostay ifthelocalpriceishigh.Itisexportonly intheyearswhenthelocalpriceislow,butthatdoesnotbuildlong-termrelationshipswithexportmarkets.Youhavetomakethatlong-termcommitment.

MrCRAIGKELLY:WhatwouldproductionlooklikeifIhadagraphgoingbackoverthelast10years,separatelyforapplesandpears?Wouldproductionbeaflatlineorwouldtherebeaslightincreaseinwhatyouareproducing?

MrDollisson:Ithasbeendecliningyearonyear,ashasconsumptionofAustralianapplesandpears.Theother concernfor thisisthat thedomesticmarket isdeclining.

Mr CRAIG KELLY: Isthat because ofimportscomingintothemarket?

MrDollisson:No,notbecauseofimportsquestion;simplybecausepeopleareeatingfastfoodsandsnackfoodsanda wholerangeof—

Mr CRAIG KELLY: What happenedto'anapple a daykeeps thedoctor away'?

MrDollisson:Weonlywishtheywouldeatanappleaday.Itwouldmakeahugedifference.Australians,onaverage,buyapples14.4timesayearandtheyeat8.8kilosayear,whichislessthanoneappleaweek.Thatisakeyconcernacross fruit andvegetables.

CHAIR:We needtodosomething about promotingtheeating of apples.

Mr CRAIG KELLY:Howdoes that comparewithother countries?

MrDollisson:NewZealandis13.8kilosperyearandEuropeis,onaverage,15kilos.Wehavealotmorealternatives.Wehavealotofsummerfruitandwehavealotofimportedgrapesandthingsofthatnature.Sowearesignificantlylessthan our competitors.Pearsaredownto 2.3 kilosper capita per year.

MsVAMVAKINOU:Haveyoudonesomeresearchatallintowhatitisaboutothercountriesthatmighthave a higher rate?Isitmarketing?We have a prettydiverse dietarything.

Mr Dollisson:We do.

MsVAMVAKINOU: Andweareprettyhealthconscious.

Mr Dollisson:Yes.

MsVAMVAKINOU: So arewefailingsomewhere?That seemsto be important,doesn't it?

MrDollisson:Ithinkweareacountrythatisfortunateenoughtobeabletoproducealmosteveryfruitintheworld, so therearemorealternatives. The biggest concernfor us istheinroadsof snackfoods.

Ms Farrow:Marsbarsandmuesli bars.

MrDollisson:Ifyougointoasupermarketandyougothroughthefreshproducesection,ifyoudonotbuythereyougotothenextaisle,anditisallthechocolatesandCadburys,andthenitisthesnackbars—theUncleToby'sbarsandthehealthbars.

MsVAMVAKINOU: So weare not winning.

CHAIR:Or thehealthfruit stickthings.

Mr Dollisson:Correct.

CHAIR:So insteadof having a pieceof fruit theyarebuying a stick of fruit.

MrDollisson:Yes—buyingamueslibarbecauseitsays'appleandpearincluded'.Thatisourbiggestchallenge:getting backtowinsome of that back.

MsVAMVAKINOU: Haveyouthought abouthowyoumight addressschoolsandschool canteens?

Mr Dollisson:Absolutely

MsVAMVAKINOU:Haveyougiventhought tothat?

MrDollisson:Yes.Particularlyinthecaseofpears,wehavejustcompletedamajorstudywithDrMannyNoakesoutoftheCSIROon whatarethenutritionalbenefitsofpears.We didthesamethingbackin2010 onthenutritionalbenefitsofapplesandstartingtopromotethosenutritionalbenefits.'Anappleadaykeepsthedoctoraway,' doesnotworkanymore.Peopleallknowit,butthey needabetterreasontoconsumefruit,andmaybeitistimewestartedlabellingourfruitlikeconfectionery,tosay,'Look,it's90cfor100gramsofapple,andthesearethebenefits,andit's$4for100gramsofchocolate,andthesearethebenefits,andit's$2.50for100gramsofmueslibar,andthesearethebenefits,'sopeopleunderstandandtheycanmakethoserelativedecisions.Wecanthrowthefruitaway;therearenodisposableornon-disposablepackages.Itisaprettyhealthypackage.Butthatisourbiggestchallenge:gettingpeoplebacktoconsumingmorefruit.Ithinkitisthebiggestchallengeforourhealthservices sector here aswell.

CHAIR: CanIjustbringthefocusback.Thereareacoupleofquestionswereallyneedtogetanswered.

Then,John andAnnie,couldwesendyou a couple ofquestionsthat wemayneed toanswer beyondtoday.

Mr Dollisson:Sure.

CHAIR:Sorry, but wearerunning abit late.

MrCRAIGKELLY:CouldIjustaskaquickone.YoutalkaboutthedifferencebetweenNewstartandthesalarythatyouhavetopay,$24 anhour.Do you knowthedifferential?

MsFarrow:No.Anyonethatworksonanorchardissubjecttothehorticultureaward,andunderthatawardtheminimumrateworksouttobe$21.76anhour,andthenyouhavealloftheadd-onsandon-costs,sothatcomes outatabout$24an hour.

MrCRAIGKELLY:Andyoualsotalkabouttheseemploymentcompaniesthatorganiseallthebackpackers.

Ms Farrow:Incertainareas.

MrCRAIGKELLY:Incertainareas—okay.Isitsimilarfortheseasonalworkers?IfIhaveatypicalapplefarmof11 acres, Ithinkyousaid—

Mr Dollisson:Elevenhectares.

MrCRAIGKELLY:Would Ithen goanddoalltheorganisationmyself,orwould Ijustgo toanemploymentfirmandsay,'Yougetmetheworkers;Idonotcarewhethertheyarebackpackersorseasonalworkers, but you get them.' Do theydo theemployment themselves?

MsFarrow:Therearesomeapprovedemployers.Inordertohaveseasonalworkersonyourproperty,youneedtobeanapprovedemployer,oryouengageacontractorthatisanapprovedemployer.Thereareacoupleofthoseapprovedemployersthatarenotnecessarilyorchardists,andtheyneedtoensurethattheyarenotonlypayingthewages but alsoorganisingall their transport costs,their pastoral care—

Mr CRAIG KELLY:Sotheorchardisthas toensurethat.

Ms Farrow:Or thecontractor if it isanapprovedemployer.

MrCRAIGKELLY: ThatiswhatIamsaying:cantheorchardjustsay,'That'sthecontractor'sjob;I'llleaveit tothecontractor tocomplywitheverything'?

MsFarrow:Yes,youcan, but thehook, as Johnalludedtobefore,isthatunderthehorticultureawardthereisanobligationthatgrowersmustensurethatanyoneemployediseligibletobeemployed.Whatthatinsinuatesisthatthegrowerhasthelegalobligationtocheckthevisaoftheperson.Thatiswhy,eventhoughyoumightusealabourcontractortodoallof thepaperwork,thegrower isstilllegallyliabletomake surethathe knowsall100ofthose peopleout intheorchardactuallyhavetheright visatoworkthere.

MsVAMVAKINOU: Not thelabour hirecompany. Who ismoreobliged?

MsFarrow:Ithinktheyareliable,butthegrowerthinksheisoutsourcingeverything,butheisnot.Heisonlyoutsourcingthepaperwork;heisnotoutsourcingthelegalliability.Ontopofthat,heisnotoutsourcingthereputationalriskthatifyouarefoundbytheFairWorkOmbudsmanorborderprotectiontohavepeopleonyourpropertywho do not havetheright visa thenyouareprosecuted, as well as thelabourcontract firm.

MsVAMVAKINOU:Labourhirecompanieshavebeeninthespotlightquiteabitinthepastweekorso.Therearealsoanecdotalsuggestionsofpeoplewhoarehereontouristvisaswhoarenoteligibletowork,perhapsworkinginyour area aswell,maybefacilitatedbylabour hirecompanies who, Iamguessing,mightknow that thevisastatusofthepersontheyareputtingforwardforworkisnotokay.Butbecausetheemployerisresponsiblefor that visa status,and not necessarilythelabour hirepeople—

Ms Farrow:Iimaginethat thelabour hirefirmisalsolegallyliable.

MsVAMVAKINOU: Areyouaware ofanythat have been prosecuted?

Mr Dollisson:Ifyou can findthem,yes.

MsVAMVAKINOU: That is agoodpoint: ifyou can findthem.

Mr Dollisson:That ispart of theproblem. Theyarethere one dayand gone thenext.

MsVAMVAKINOU: So, theyareprettyslippery.

Ms Farrow:Thelabourhirefirmsareoftencalledphoenixfirms.

CHAIR:Whichbrings us backtotheneedtohavethemlicensed or registeredinsomeway.

MsFarrow:Theygetprosecutedinonearea,orchasedbytheFairWorkOmbudsmaninonearea,andtheymovetoanother.

MrDollisson:Andyouarequiteright:iftheywerelicensedandchecked,thenyoucouldtrackthemdown.TheDepartmentofAgricultureandtheDepartmentofForeignAffairsandtheimmigrationdepartmenthavetheVIVOsystemwhereyoucancheck.Sayyouhave400pickerscomingintoharvestyourcherries.Youcansitthereanddownloadandcheckeveryoneoftheirvisas.But,firstly,wedonothaveaccesstotheinternet,andmostofthetelephonesdonotworkintheareaswherewegrow.AndbythetimeIcheck400visasthecropisgone.So,thatisnotaviablesolution.Hencethegreencard.ButIthinktherealsolutionislicensingthelabourcontractors,andsomewayof licensing and policingthat.

CHAIR:So,yoursuggestionaroundthegreencardwasreallytoeliminatethischallengethatyouhaveintermsof—

MrDollisson:Itisprotectingthegrower,tosaythatthegrowerhasdonetherightthing,hassignedacontract, and thecontractcomplieswiththelaw.TheFair WorkOmbudsmanwouldsignoff and say,'Yes,you'vedonetherightthing,andI'vevettedbylookingatthegreencardthattheyareallcorrectvisas.'Tosomedegreethatgetsthegroweroffthehook.Attheendofthedayheisstillonthehook,butifheorshecanshowthattheyhavedoneeverythingtheyhavetodotocomplywiththelaw,thenIfeelIhavedonetherightthingbythegrowers.

MsVAMVAKINOU: AndthegreencardwouldcomefromtheDepartment of Immigration.

Mr Dollisson:Correct.

MsVAMVAKINOU: It isnot goingtocomefromthelabour hirecompany.

Mr Dollisson:No.

MsFarrow:Anditwouldcomewithyourvisa,andifyouarehereonaholidayvisayoudonotgetissuedwith one, becauseyouare not eligibletowork.

Mr Dollisson:Youcannotwork on a tourist visa.

MsFarrow:Butifyouhaveaworkingholiday-makervisayougetissuedwithagreencard.Theyaretheonlypeoplewho cangetissuedwiththem.

MsVAMVAKINOU: Licensingthelabourhirecompanies wouldstamp out thisphoenixfirmphenomenon.

Mr Dollisson:Yes—whichwerethebulkofthefirmsthatwerecriticisedinthatFourCorners program.Withmost ofthosetheycouldnotinterviewthefirms,becausetheywerenotaround.They werehereonedayandgonethenext.And,infairness,youcouldask,'Whydon'tthefarmersmakesuretheyhavetherightlicence?'TheproblemisthatifI havecherries about to be harvestedIneed labour, and Ihave about twoweeks noticeto getmylabourright,andIcannotgothroughtheargy-bargy.Youjusthavetosignthecontractandgetthecropoff.Otherwise,youhavelosttheyear'sincome.So,theyareunderafairdegreeofpressuretogetthecropharvested.

Ifwecangivethemastandardcontract andtheycanvetthelabourthatiscomingalong,thatisprobablyasmuchas theycan do. Itreallycomesback tothat licensingof thecontractors.

CHAIR:Wedohaveacoupleofquestionswewouldliketoforwardtoyoubeyondtoday,ifyouwouldbehappyfor us to do that.

Mr Dollisson:Absolutely.

CHAIR:Butthereisjustonelastquestion.WehavetheACTUcomingthisafternoon,andtheyhavemadearecommendationintroducinganannualcaporquotasontheworkingholidayvisaprogramandabolishingthesecond-year workingholidayvisa extension. Do youhave a view on thisrecommendation?

MsFarrow:Weareabsolutelyagainstit.Weshouldnothaveacaponthenumberofworkingholiday-makers.Thehorticulturalsectorisexpandingcontinuously.Itisamajorgrowthareainagriculture.Allofhorticultureisreliantonmanuallabourforharvest.Everyonehand-picks—exceptperhapspotatoesinbroadacrehorticulture.Andweneedthatlabour.Welloverhalfoftheseasonallabourforceacrosshorticultureisreliantontheworkingholidaymakers.Thereareabout40,000workingholidaymakersayearand,Ithink,about2,000seasonalworkers.About70,000or80,000peopleareemployedinhorticultureinthepeakperiod,sooverhalfofthatlabourforceisreliantontheworkingholidaymakerscheme.Intheappleindustry,myguesswouldbethat,forthatlateJanuary toMayperiod,aboutfour-fifthsofthelabourforceareactuallyworkingholidaymakers.So,ifyou puton a capon it,youmayas well kiss thecropgoodbye.

Topreventthesecond-yearpersoncomingwouldbedisastrousforgrowers.Theyreallyrelyonhavingthatsecond-yearpersoncomingback.Wedonothaveanydata,justtheanecdotalevidence,whichsaystheyalwaysencouragethatpersontocomebackthesecondyearbecausetheyknowthefarm;theycanstepuptoahigherlevelandsupervisetheothers;andtheyknowthatgrower,whathisexpectationsareandhowtheorchardruns.TheABARESstuffprovesthattheseasonalworkerismoreproductivethanthebackpacker,butthesecond-yearbackpacker ismoreproductivethanthefirst-year backpacker.

CHAIR:Atthesametime,whatwearehearingyousay—andwewillclarifyifIhaveanyofthiswrong—isthat thereisroomfor theSeasonal WorkerProgramtogrow—

Mr Dollisson:Yes.

Ms Farrow:Absolutely.

CHAIR:andthat,withmorepromotionandmaybewithsomeofthefinetuningthatyouhavesuggested todayaroundlabourhirecompaniesandhowaccountabletheyaremadetobe,togetherwithsomesimplifyingofredtape—theformsthatneedtobefilledoutfortheapprovedemployerbeingonesuggestion—therecertainlyisroomfor theSeasonal Worker Programtogrow.

Ms Farrow:Yes.

MsVAMVAKINOU:Ijustwanttoadd,becauseIthinkthisisaveryimportantconversation,thattherewassomeevidencegiventousinCanberrathatsuggestedthatthebackpackerprogramwashavinganadverseimpactontheSeasonalWorkerProgram.ThebackpackerswereactuallybeingpreferredanditwasimpactingnegativelyontheSeasonalWorkerProgram,whichwasputinplaceforsomePacificislanders.Thatisoneissue.Thebusinessofthecapping—Ilovetheworkingholidayvisaprogram,butithasbecomeobviousthatitishavinganimpact onemploymenthereinAustralia.Itisdoingitinthesecondyear,whena lotofbackpackersareendingupinmetropolitancities incafes, so thereisclearlysomethinggoingon there aswell.

CHAIR:It is a separateissuetohorticultural one.

MsVAMVAKINOU: Itisseparate,butthewholethingisapicture.Iunderstandtheimportanceofneedingtopickcrops;Ido.Itisabout tryingtofind a good outcomesothatyou do not have one sideimpactingnegativelyontheotherhandandyoulosecontrolofit.Iguessthatiswherethecappingconceptisemerging,becausewehavestillhaveaproblemwithunemploymenthere,low-skilledandyouthunemployment.WehavenottalkedaboutJobNetworkproviders—andIdonotthinkitisfairtoputitonyou,buttheyareanothercomponent.TheyaresupposedtobefindingjobsforthepeoplethataresenttothemfromCentrelink,andIamnotsurewhatitisthat theyaredoing and whattheir relationshipsarewith labour hirecompanies.

Noteveryoneisgoingtocomeoutandpickfruit;thatisabsolutelythecase.Butthisiswherethecappingconceptiscomingintothemixfordebate,becauseitisaboutthosesecond-yearworkers,wheretheyallendingupandwhatimpacttheyarehavingonjobsthattraditionallywouldbetakenupbyalocal—youngpeople,students or kidsstudying. There seemto be issues thereaswell, and that iswherethat iscomingfrom.

CHAIR:LeadingonfromwhatMariahassaid,youhavetoask:ifyoungpeoplefromoverseasarepreparedtotravel throughout Australiato get seasonal work,whycan't we get youngAustralians that cannotget worktodosomethingsimilar?

MsVAMVAKINOU: Have a holidayinsideAustralia!

CHAIR:Toseetheircountry.Maybeweneedtohaveadifferentpromotionalpackage for them, toexperiencetheircountry,andalsofillsomeoftheneeds.Obviouslyyouwantgoodworkers.Youwantpeoplethataregoingtodothejobwell,andofcoursequalityiswhatisimportantbecauseyoucannotsellbruisedordamagedfruit.

Mr Dollisson:The keyreason iseconomics.IfIamayoung18-year-oldinHamburg,thebestIcan earn asanunskilledlabourerisfiveeurosanhour,about$7.50.IfIcomeoutoftheeasternsideofEurope,thebestIcanearnisthreeeurosanhour,aboutfivebucks.IcometoAustraliaandIget$25anhourandwhenIleaveIgetmysuperannuationbacktopayformyholiday ontheway backtoBali.AsanAustralian, Icanworkatthelocalcafeandget$25anhouror20buckscashandpaynotax.SothereisahugedifferenceinincentivetocometoAustralia and workasa backpacker versus anAustralianworking asa backpacker.

WewouldloveyoungAustralianstocomeandwork,andIhavetosaywehavehadmoresuccessatgettingyoungAustralianstocomeintoourpackingplants,wheretheyarequiteproductivebecauseyouhavetobeproductive—youhavetokeepupwithamachine.Butwejustfindthatwhenweputthemoutinthesun—wehaveeducatedallofourkidsnottostandinthesunfortoolong—theyarejustnotallthatkeen.Yougettheoccasionalonethatisquitekeen,buttheworkethicisverydifferentbetweenthetwo.Thestudentscomingover,alotofthemarestudents,knowthattheyareonlygoingtodoitforayearortwo.Theymakequitegoodmoneyand theycan go backandbuya car whentheygetback home.

SotherearequitedifferenteconomicreasonsforwhyyourbackpackerwouldcometoworkversuswhyanAustralianwouldnot,butinBatlow—Iwasuptheretwoweeksago—wearedoingverywellwithlocalyouthinthepackingsheds.Theyareworkinginaclosedenvironment,justputtingfruitthroughmachines.Sothereisanareathere.Mybigconcernaboutcapping,theACTUproposal,isthatifyoucappedorsloweddownthebackpackersworkingyouwillshutdownhorticultureinAustralia.Wearejustabouttostartona hugeopportunityforagricultureandhorticulturethroughthefreetradeagreementsandweneedtorampupthenumber.Ifwewanttoincreaseourproductionforexport,andthatisexactlywhatwewouldlike—wewouldliketodoublethenumberof apples growninAustralia.

Mr CRAIG KELLY:Do youthinkthat ispossible?

Mr Dollisson:Absolutely. JustintheMurrayGoulburnalone, Ican plant 100,000 hectares of apples—10-foldour production—as long asIhave a market.

Ms Farrow:And labourerstopick.

MrCRAIGKELLY:Soyouaresayingwehavethecapacityasanationtoproduce10timesasmanyapplesas weareproducing now if thedemand and themarketsarethere?

MrDollisson:Absolutely,providedthemarketisguaranteed.IfthemarketisnotguaranteedIamobviouslygoingtohavealotofnervousnessfrommylocalgrowersbecausetheythink,'Wehavehaddumpsonthedomesticmarket;therewouldbenomoney.'IfwecanopentheChinamarket,ifwecanopenuptheIndianmarketinamoreproductiveway—twocitiesinthosemarketsaloneareenoughtoincreaseourproduction10-fold.

MsVAMVAKINOU: Youwould needpickers,though.

Mr Dollisson:Absolutely.

CHAIR:Youarebacktolabourers.

MsVAMVAKINOU:Sotheproposalforthe15,000placesfromChina,thecapping,Iamassuming,wouldnotbe retrospective,it would be forward.You would notcancel your program—

Mr Dollisson:No.

MsVAMVAKINOU:youwouldjustleaveitopen,forthereasonIsaidinitially:itstartstohaveanimpacton thelocal employment.

MrDollisson:Furtherdown thetrackwewillprobablygettothestageofmechanicalharvesting,asviticultureisdoingandanumberofotherpartsofagriculturearedoing,butwearealongwayoffandthatissignificantcapital investment to do that.

MsVAMVAKINOU: Sure.

CHAIR: Ithinkwearegoingtohavetowrapitupbecausewearerunningalittlebitovertime.Couldyouforward on somesuggestionsaroundthesuperannuationpayment?

Mr Dollisson:Certainly.

CHAIR: Thathascomeup previouslyinhearings.Andparticularlyifyouhavesomeclarificationsaroundthenature of thechallenge andwhatyouthinkpracticallycould be adjustedor adaptedwithregardtothat.

Mr Dollisson:Yes.

CHAIR: If wehave anyfurther questionsif youare happyto—

Mr Dollisson:Pleaseforwardthem,yes.

CHAIR:Thankyouforyourattendanceheretoday.Ithasbeenveryproductive,ifImayuse thatterminology.Ifyouhavebeenaskedtoprovideadditionalmaterial,wouldyoupleaseforwardittothesecretary.Youwillbesentacopyofthetranscriptoftheevidencetowhichyoucanmakecorrectionsofgrammarandfact.Thank you so much.

MULCAHY,MrRichard,Chief ExecutiveOfficer,AUSVEGWHITE, MrAndrew,DeputyChief ExecutiveOfficer,AUSVEG[10:05]

CHAIR: Iwishtoadviseyouthatingivingevidencetothecommitteeyouareprotectedbyparliamentary

privilege.Itisunlawfulforanyonetothreatenordisadvantageawitnessonaccountofevidencegiventoacommittee.SuchactionmaybetreatedbytheSenateortheHouseofRepresentativesasacontempt.Itisalsoacontempt togivefalse ormisleadingevidencetothecommittee.

Thesearepublicproceedings,althoughthecommitteewillconsiderrequeststohaveevidenceheardincamera.Ifyouobjecttoansweringaquestionyoushouldstatethegroundforthatobjectionandthecommitteewillconsider thematter.

Finally,I wishtoinformyouthattheseproceedingsarebeingbroadcastandthata transcriptoftheproceedingsisbeingmade,whichwillbeprovidedtoyou.ThankyouforyoursubmissiontotheinquirytodayandInowinviteyoutomake an openingstatement tothecommitteebeforeweproceedtoquestions.

MrMulcahy:Thankyou,Chair.Iwouldliketoopenmyremarksbyexpressingourgratitudefortheopportunitytoappearatthishearingandtothankthecommitteeforthechancetopresenttheperspectiveofthevegetable and potatogrowers of Australia,whowerepresent.

TheSeasonalWorkerProgramperformsavitalroleintheAustralianhorticultureindustry.ByhavingastructurefocusedonreturnvisitsitallowsworkerstobuildfamiliaritywithAustralianfarmingoperationsandthereforemakeasignificantcontributiontoafarm'sproductivitywhileprovidingvaluableincomefortheirfamiliesandtheeconomiesoftheirhomecountries.Italsoprovidesavaluableavenueforforeignaidandskillsdevelopment.

TheapprovedemployerstructureprovidesavaluablesystemforprotectingtherightsofworkersbyonlyallowingemployerswhohaveaprovenhistoryofcompliancewithAustralianimmigrationandworkplacelawtobeabletobringworkerstoAustraliaundertheprogram.Bymaintainingrecordsofapprovedemployersandtheirworkers,thissystemensures complianceandaccountabilitythroughout theemployment process.

AUSVEGwelcomesrecentreforms,whichhaveincreasedtheflexibilityoftheprogramtoimproveitsuptakeandappealtogrowers.Wehopetoseetheprogramcontinuetogainpopularitywithinoursector.Howeveriftheseasonalworkerprogramistobemorewidelyadoptedasanaidandanemploymentprogram,itmustbepresentedasacompetitiveoptiontotheWorkingHolidayMakerVisaProgram.Duetoprohibitivelyhighcostsand a narrow rangeofpartner countries, this is currentlynot the case.

TomeetlabourneedsinAustralia,2,000seasonalworkerswereemployedinhorticulturein2013-14,inadditiontoaround40,000backpackersworkinginagriculture,forestry andfishinginthesameperiod.IfweweretoincreasetheSeasonalWorkerProgram'sutilisationbygrowersitisimperativetoreducethecostandadministrativeburdenofemployingseasonalworkers.Onesimpleandeffectivemethodofdoingso,withnoaddedcosttothetaxpayerortothegovernment,wouldbetoamendthecurrentabilityofemployerstorecoveranytravelcostsabove$500fromaworker'swagesovertimeandtoextendthattocoveralltravelcostspaidforbytheemployer.ThiswillhelptomaketheprogrammoreappealingtogrowersandincreasetheviabilityoftheSeasonal WorkerProgramasan alternativetousingbackpackers.

Secondly,toincreaseitsutilisationwithinthevegetableindustry,werecommendthattherangeofcountrieseligibletoparticipateintheSeasonalWorkerProgrambeexpanded.Inparticular,weproposethattheSouth-EastAsiannationswithextensivedomesticagricultureindustriesorexpatriatepopulationsinAustralia,andwhichmeetthecriteriaforforeignaid,suchasCambodia,VietnamandIndonesia,areexcellentcandidatesforinclusionintheprogram.

Withregardtotheprogram'simpactonthedomesticlabourforce,backpackersconstituteamajorpartoftheAustralianhorticulturalworkforceandseasonalworkersareprimarilycompetingagainstbackpackersforjobs,ratherthantakingjobswhichwouldotherwisebefilledbyAustralians.AccesstoreliablelabourremainsanissueinregionalAustralia,andreliability ofaccesstolabourisalsooffundamentalimportanceifAustraliaistorealiseeconomicbenefit fromexpansionintoexport markets.

WewouldstronglycautionagainstexpandingtheSeasonalWorkerProgramtoallowotherindustries,suchastourism,toparticipate.ThevalueoftheSeasonalWorkerProgramtothehorticultureindustryisshownbythestronguptakeoftheprogramwithinthehorticultureindustry,relativetotrialsectors.Permittingworkerstomoveintootherindustrieswhichmaypresentmoreappealingworkenvironments,suchastourism,risksdilutingthevalue of theprogramasa potentiallyvital labour sourcefor horticultureinthefuture.

Giventhefederalgovernment'sfocusonagricultureasoneofitsfivestrongpillarsoftheeconomy,andtheenormousexportpotentialof theindustry,theimportanceofsupportivepoliciesinthisareahaveneverbeenmoreparamount. Thank you.

CHAIR:Thankyouverymuch.IwillbeginwithacoupleofquestionsandthenIwillhandovertomycolleagues.DoyouhaveinformationonthecurrentandprojectedworkforcerequirementsfortheAustralianvegetable and potatoindustries?

Anydata?

MrWhite:No,Ihavenotseenanydatatohandthatwouldshowwhattheprojectedworkforceneedsare.Ithinkthepointthatwasmadeintheearlierhearingaboutthegrowthoftheindustryistrue:theindustryisgrowingrapidlyinterms of value and thereis a lot of export potential. So, Ithink—

CHAIR:Whatthat actuallylookslikeishardtomeasure atthispoint intime.

Mr White:It isdifficult tomeasure.

MrMulcahy:Ourmoveintotheexportspaceisrelativelynew.Ithasoccurredinthelasttwoyearsinaseriousfashion.Weareoperatingoffaverylowbaseofaboutsevenpercentofourproductionbeingexported.Wehavedeveloped aprogramoverthelasttwoyearsinwhichwehaveinvestedquiteadeal of moneytoeducategrowersonexportactivity,toshowthemtheissuesthey havetoconsider.WehavetakenteamsofgrowerstotheMiddleEastandtovariousAsianmarkets.WehavepresentedAustralianproductanditisgettinganenormousresponse.

Wedo,however,aspreviouswitnesseshaveidentified,havechallengeswithmarketaccess.WecannotgetourcommoditiesintoChina,basically.Wecangetintosomeothermarkets,suchastheUnitedArabEmirates,Japanandsoon.Butweareworkingvigorouslytotrytobuildthatexportcapacity,whichwillthen—hopefully—notonlyleadtogrowthinthe industrybutwillreducethe domesticpressure.Frankly,weareproducingmoreproductthanwecansellinAustralia.Thatworkstothedisadvantageofgrowers,whoarethenverymuchbeholdentoretailer pricedeterminations.

CHAIR:Andthenawholelotofotherfactors.Couldyougiveanysuggestions?Obviously,wehavehaddiscussionsaroundbackpackersandwhattheyprovidetotheindustry.Doyouhaveanysuggestionsonhowweenticegrowerstomove from other forms of labour supplytothisprogram?Not that I wouldsuggest—

MrMulcahy:CanIjustclarify?Doyoumeantomovemoretoseasonalworkersratherthanthebackpackermarket?

CHAIR:Yes.

MrMulcahy:Theremovalofthecostisafactor.Thereisthefactthatwecannotrecoverthefirst$500.Itmightnotseemto be a largeamount ofmoney,butifyouarebringingin 50 people, asone ofmyleadinggrowersis—bringingin 50 fromEastTimor shortly—

CHAIR: It is a lot ofmoney.

MrMulcahy:Itis—itaddsup.Ifyoumultiplythatacrosstheindustry,itisasignificantburden.Wearenotproposingthatmoneybetakenupfront,butoveraperiodoftime.Itisonly$10aweek,roughly.Thatwouldassistus infurther supportingthescheme.

IthinkitisfairtosaythatinaperfectworldourgrowerswouldprefertheSeasonalWorkerProgram.Itismoreorderly,itisbettersetupandtheprospectofhavingpeoplecomebackisreallyimportant.Ifyoutrainsomebodyupandtheysay,'Thankyou,'taketheirmoneyandgothenyouhavetostartagain.Whereas,becauseofthewayinwhichtheSeasonalWorkerProgramhasoperated—andIhavehadadiscussionwiththeforeignministeraboutthis,andIknowthedrivingmotivationhasbeentosupportsomeofourPacificneighbours—thathasbeenquitegoodinthesensethatithastappedintofamilynetworks,giventhemthecapacitytoexpatriatefundstotheir familiesand then either bringbackthose workersagain orother familymembers.

Soithasinheritadvantages,ifwecancontinuetomoderatetheprogramandmakeitlesscostlyandlessadministrativelycumbersome.

CHAIR:Iamjustgoingtocreateabitofapicture,becauseIwaschairofthetradesubcommitteeandwearejustintheprocessoftyingupourinquiry intotradewiththeMiddleEast.WewillbegoingthereinDecember,soIwanttoaskyousomequestionsaboutmarketsintheMiddleEast.WhentheAmericansrebuilttheirmanufacturingindustryafterthe Second World War theyhad thismassiveprogram,'workfor America'.Everyonewas involved and it was allverymuch a hands-onapproach bytheAmericans tobuildit.Australia has lostalargeslice ofitscar industry—well,it has lostitscar industry.It isanissueforme and myelectorate. The food industryseemstobethenew potentialforusintermsofmanufacturing,whetheritisnichefoods,vegetablesorfruit.Iam

reallysurprisedthattheexportcomponentofyourindustryissosmall.Itmakesabsolutesensethatwebecomeafoodbowlfortheregionbecausewehavethatcapacity.Itisgreattoseethatview,becauseIthinkwewentthroughaphasewherewejustuprootedourtreesandoptedforcheaperimportsandsoforth,especiallyinsomesectors. Ithinkthereis a lotof potential.

My questionis:whataresomeoftheimpedimentsthatyouhavecomeacrossinrelationtoaccessingmarkets?Chinahopefullymay beworkedthrough.TheMiddleEastisvery opentoAustralianproduct—extremely opentoit—andwehaveveryfrequentflightswithEmiratesandEtihadcarryinglotsoffreshfoodwithshortshelflies.Wehaveallofthatavailabletous;thereareopportunities.Labourisanissue,asareopportunitiesforAustralianlabourandattitudestowardsthisnew,emergingmanufacturingcapacitythatwehave.Canyoureflect onsomeofthose, so that we canmakeeverybodyhappy—

Mr Mulcahy:Makeeveryonehappy?

Ms VAMVAKINOU:Makeeveryoneinthe supplychain happyand actuallydevelop our foodmanufacturingindustry.

MrMulcahy:Iwilldeal withthemanufacturingissuefirst.I hatetobeapessimist.Ihaveworkedinthefoodmanufacturingindustry andconfectionary.Ihaveseenthedemiseoffoodmanufacturinginmyarea.TheCEOofoneofthestill-standingmajorfoodcompaniesmanufacturinginourspacetoldmefouryearsagothateveryemployeeinhisplantwascostinghim$100,000ayear.Doyoublametheunionsforthat?Notreally;Iblamemanagement.Oneoftheleadingeconomistsdidadissectionofthatcompany.Therealityisthatnoneofusisveryinterestedintakingpaycutsinlife.Thatisnotaccommodatedunderoursystemandnotmanypeoplewouldlikeitwhetheritwerelegalornot.ThedifficultyinAustraliaisthatthecapitalinvestmentinmanufacturingissignificant,thelabourcostissignificantandIwouldnotbeholdingmybreaththatwearegoingtoseearesurgenceinfoodprocessing and manufacturingwithinAustralia.

Idobelieve,however,thatthebesthopeforthesideisthedevelopmentandexpansionofcommodityexports—freshfood,ifyoulike.Certainly,value-addinginthatspaceisappealingtoourcustomers.WearehearingthatmoreandmoreoutofAsiaandtheMiddleEast.Isuspectthatisthedirectionwewillgoin.Idonotwanttobuyintotheindustrialrelationsreformdiscussionwhichisstartingtoberaised,buttherealityisthatwithallofourcostsitisestimatedthatitisactuallyabout$27anhourtoemploypeoplehere.Whenwearegoingupagainstothermarketsweare notinthe league, incompetitiveterms.Wherewehaveabigplusisinqualityandinsafety.Wedealthatcardquiteaggressively.Wehaveverysignificantinvestmentinresearchanddevelopmentandweattachalotofimportancetobiosecurity.WhenIhavebeenupwithourgrowerstoHongKong,IknowthatalotofnervousChineseprospectivecustomersareveryanxioustoknowaboutthesafetyissuesbecauseofthewell-documentedand—insomecases—horrificexperiencestheyhavehadintheirownfoodproductionarea.Eventhecommunistpartyproducedareportraisingdoubtsabout30percentoftheirfoodproduction.Soitisaplus.Myworryisthatdownthetracktheywilleventuallygetthatsortedoutandthatwillnotbeacompetitiveadvantage.