Q and A: RSE scheme employers want costs cut

Some employers in New Zealand who are part of the Recognised Seasonal Employer (RSE) scheme want changes because of the cost.

This is the assessment from Australian National University researcher, Charlotte Bedford, who said support for the scheme remains high, but there are some elements within it the employers would like to see changed.

The employers have raised concerns about the loading on top of the minimum wage they are obliged to pay, restrictions on rents and having to guarantee 30 hours of work a week each week.

The number of workers coming in, for both the New Zealand and Australian schemes, is also down.

Don Wiseman asked Bedford, who is with the Development Policy Centre at the ANU, whether the shine was going off the seasonal schemes.

CB: I can only really talk for the New Zealand scheme, I wouldn’t say necessarily the shine has gone off, just that there’s perhaps just a plateau at the moment in terms of demand that’s driven by a lot of factors. There’s a lot of commitment still to the RSE scheme. Employers are very, very supportive of it and committed to it and the relationships that they’re built with workers and families and communities in the Pacific. I think it’s just become for some, quite expensive to be engaged in the programme. So my sense is that yeah, industry is just looking for some discussions with government around perhaps whether they can make it a little less expensive for employers at the stage. But I wouldn’t say the shine has gone off.

I think the sort of public perception of it, perhaps, in terms of there’s far more rhetoric now around a sort of exploitation and things, which is quite interesting, because when the scheme was set up in 2007, it was, you know, it was driven by industry, they were seeking labour. And one of their sort of commitments at the time was that with the introduction of the RSE scheme, that they would clean up sort of growing practices and remove use of illegal labour and sort of tidy up the horticulture and viticulture sectors. So it’s interesting that a scheme that was designed to remove sort of any exploitation, now there’s a bit of discourse around that, and that itself has exploitation, which I person ally don’t think is really an issue. But yeah, that’s interesting to see.

DW: When we talk about the employers being concerned about costs, have they had additional costs placed on them in recent years?

CB: Yes, there’s been a few changes, and there was the shift to the 30 hours a week in making sure that you paid 30 hours every week that came in during Covid. That was a change away from being able to average out hours over the duration of the workers contract. So they shifted to 30 hours, which I think was a very good thing, because workers have fixed costs while they’re in New Zealand, quite a lot of fixed costs. So it’s important that, you know, they are actually earning enough money to cover those costs and be making some money that they can go home with.

But on top of that, they’ve now got the increase of the minimum wage, and then 10 percent above minimum wage must be paid to RSE workers. They’ve got the freeze on at the moment on accommodation costs, which came in 2019 and means they’re not able to charge any more for for rent to workers than they could then. And there are some new sick leave provisions as well, which also add a bit of a cost to employers.

DW: The farmers’ concern about the 30 hours minimum every week is because, of course, horticulturalists often can’t work a 30 hour week, but then the following week, they can work 60. They want to see them that 30 hour period levied over a longer number of weeks, is that right?

CB: That’s right.

DW: And they’re asking government to change the rule?

CB: Well, they’re asking them to sort of reconsider it, I guess, at this stage and see whether it’s possible to go to averaging over a four week period. So they don’t want to go back to what was originally in place, which is averaging over the duration of the contract. But yes, I think there are some small growers with very sharp seasonal peaks, who perhaps, they might need quite a lot of workers at a set time, but it’s difficult for them them to find enough work to cover those 30 hours, particularly if they have you know, periods of bad weather or the crops not really for, you know, to be picked. So they are just asking whether that can be reconsidered, think that the 10 percent above the minimum wage for rec workers as perhaps that’s just my personal view, the one that requires some more thought, because I’m not clear why RSE workers should be earning more than New Zealanders, when the scheme was set up with a New Zealander first principle. It was designed to [allow] employers to seek New Zealand labour first, ahead of using RSE workers. I’m unclear why there’s now this discrepancy between what you pay your RSE workers and what you pay your kiwis.

DW: All right, to the numbers, New Zealand extended the number of people they were prepared to bring in to 19,500. But the numbers this year are not going to get anywhere near that. Why is that?

CB: Oh, there are only going to be, perhaps, the estimate I think that’s my piece, they’re about 1700 workers short. I think recovery from last year’s cyclone, you know ongoing recovery work there has certainly perhaps reduced numbers in Hawke’s Bay and in Gisborne. And I think there’s just perhaps, for some, yeah, they haven’t brought in the full allocation. That could be related to costs for some employers. For others, I think access to accommodation, finding suitable accommodation, in they may not have been able to do in the last year and so they just haven’t needed to fill their full allocation of labour.

DW: The government is talking about bringing in more, isn’t it? It said it was going to extend that quota.

CB: The sort of pre-election promise was to increase the numbers to 38,000 over the next five years. I don’t I’d think that that was really driven necessarily by industry or certainly by horticulture and viticulture. Perhaps government had thought that if they did that there was maybe an expansion of the RSE scheme to other sectors as well. But I don’t see that level of demand required under the RSE in horticulture and viticulture, and I don’t think there hasn’t really been any further talk about that. So it’d be interesting to see whether that takes place or not.

DW: Over the last 18 months or so there’s been significant discussion in places like Samoa about the brain drain, and people leaving quite high powered jobs and coming to New Zealand to go fruit picking, and their numbers have been now trimmed back. The same with Tonga and the same with Vanuatu, all for similar reasons.

CB: All for similar reasons. I think employers are responding to the concerns that have been raised there. Samoa has developed a labour mobility policy, they’re yet to implement some of those changes, but they’re making quite a few changes to the way that employers are able to recruit. Vanuatu has also had a review of their labour mobility policy, and Tonga has done a labour mobility supply management strategy. So yes, they’re all looking more closely at who is heading overseas, and perhaps some of those impacts at home of the loss of some productive working age men and women. But yes, employers have responded to those concerns and encouragement from MBIE [New Zealand Ministry of Business, Innovation and Employment] to look to other countries. PNG is certainly one of the key options.

DW: The number of Papua New Guineans coming in is up 325 percent and very high rises for Solomon Islands, I think as well, and Fiji.

CB: Yes. So both Solomons and Fiji have hit over 1000 workers within the last year and that’s the first time that they have sent that many within a year. It’s good, it’s really nice to see that, is very positive. It’s employers responding to suggestions that have been made around, perhaps, looking elsewhere and not being too heavily reliant on three countries, particularly as Australia continues to expand. And there are significant numbers from Vanuatu, Samoa and Tonga going to Australia as well. So it’s a very positive shift.