Criticism Mounts Over Imbalanced Foreign Worker Program as Majority of Funds Remain in Australia

A labor initiative intended to bolster Pacific Island economies while addressing Australia’s worker shortages is facing criticism for primarily benefiting Australia. A new report raises concerns that the program may also be at risk of fostering modern slavery conditions.

The Australia Institute (TAI) released an analysis of the Pacific Australia Labour Mobility (PALM) scheme. This temporary visa program allows Australian employers to hire workers from nine Pacific Island nations and Timor-Leste.

The report suggests the program has become so imbalanced that it could potentially harm, rather than strengthen, diplomatic and economic ties with these nations.

The PALM scheme was originally launched to fill short-term roles in agriculture, such as fruit picking. However, it has grown substantially, now employing over 30,000 workers across various sectors, including health and aged care.

The report cautions that this broadening scope could deplete skilled labor from the already struggling health systems in the participating countries, leaving them critically under-resourced.

Despite generating approximately $1 billion annually, the report indicates that only $184 million of this revenue is actually returned to the workers’ home countries.

The Department of Foreign Affairs and Trade says that labour mobility is “essential” to Australia’s engagement in the Pacific and creates “deep connections”.

“Labour mobility delivers jobs for Pacific and Timor-Leste workers, enabling them to develop skills, earn income and support their families back home,” the department’s website states.

“Labour sending households benefit in many ways, including higher incomes, greater access to education for children and progress towards gender equality.”

However critics argue that once workers engage with the scheme, they may feel trapped in unsafe working conditions, as their visa is tied to their employer.

A report from the migrant justice institute in 2024 found there is likely a substantial proportion of PALM workers trapped in working conditions that would be unacceptable to Australian workers, with 64 per cent of workers surveyed saying they would change their employer if allowed.

Still a ‘win-win’?

The PALM scheme was originally promoted as a “win-win” arrangement — providing labour for Australian industries while supporting economic development in the Pacific.

But Morgan Harrington, research manager at TAI, said the economic benefits weigh heavily in Australia’s favour.

Harrington said 80 per cent of the economic value generated by the scheme stays in Australia, while only around 18 per cent reaches Pacific Island nations and Timor-Leste.

He said the money stayng in Australia was related to taxes that PALM workers pay, direct profits to employers, personal expenditure on rent and food for PALM workers.

“When the PALM scheme was established, it was lauded as a win-win for Australia and its participating neighbours,” Harrington told SBS News.

“If Australia wants to say this program is a win-win, then the economic benefits need to be more equitably distributed.”

More restrictive than other visas

PALM visas are more restrictive than other Australian work visas, a feature Harrington said creates significant risks for workers.

“The main problem is that PALM workers can only work for the person who sponsors their visa, and that means that if they have a problem with their employer, it can be very difficult for them to leave,” he said.

“On top of that, they don’t have access to Medicare, so if they’re hurt at work, it can be a real problem. They have no rights to family accompaniment, and there is no pathway to migrate.”

He added that they often struggle to access their superannuation and feel the brunt of cost-of-living pressures, with workers forced to hand over a large portion of their earnings in tax and expenses.

Both the NSW Anti-Slavery Commissioner and the UN Special Rapporteur on Contemporary Forms of Slavery have identified the PALM scheme as posing a modern slavery risk.

“This is shameful for a nation like Australia,” Harrington said.

“To avoid those risks, PALM visa holders should have the same rights as other Australian workers, including the right to change employer if they feel it’s necessary.”

Workers under the scheme, of which there are currently over 30,000, are bound to a single employer and not entitled to initiate a transfer to another employer — otherwise, their visa will be cancelled. (Of the scheme’s 494 employers, 102 are labour-hire companies that effectively subcontract workers to other companies.) Transfers are only permitted with the approval of their employer-sponsor or at the discretion of the Department of Employment and Workplace Relations (DEWR).

Contracts under the scheme can be short-term, lasting up to nine months, or long-term, lasting up to four years.

Workers underpaid, mistreated and abused

Since 2019, around 7,000 people have left the program and are now in breach of their visa conditions.

“This means that they’ve made the very difficult choice to try their luck in Australia in breach of their visa conditions,” Harrington said.

Workers may disengage for a range of reasons, including poor living conditions, underpayment, insufficient work hours, mistreatment, or abuse.

Between 2020 and 2023, TAI found 45 PALM workers died in Australia, and more than 230 were seriously injured.

“It’s really important that we address the situation of these 7,000 disengaged workers before the program is allowed to expand,” Harrington said.

PALM worker disengagement ‘priority’ for government

A spokesperson for the Department of Employment and Workplace Relations told SBS News in December that “addressing PALM worker disengagement is a priority for the Australian government”.

“Wherever possible, the Australian government seeks to support the re-engagement of disengaged PALM workers,” the spokesperson said, adding that a dedicated disengagement response team has been set up to deal with the issue.

SBS News also contacted Employment and Workplace Relations Minister Amanda Rishworth about the scheme in December.

A spokesperson for the minister said: “Since coming to office, the Albanese government has invested $440 million to expand and improve PALM, including to better protect and support workers while in Australia. This includes minimum work hours, guaranteed minimum net pay and pay parity.”

TAI’s report calls for changes to ensure the scheme better supports workers and their home countries.

That includes measures to increase the share of money reaching workers and their families; the improvement of workers’ conditions and rights; and re-examining the program’s expansion beyond its original agricultural focus into health and care sectors.

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