Tuesday, April 23, 2024

Work visa wage requirements ‘untenable’

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A Federated Farmers survey in March this year found just under one-third of farmers employed migrant staff.
NZX dairy analyst Alex Winning-Browne says the ‘relatively significant lift’ is a ‘sigh of relief for farmers’ nationwide.
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Federated Farmers and DairyNZ will ask the new Government to remove the requirement that Accredited Employer Work Visa holders be paid at least the median wage.

“That wage requirement is simply untenable for the mostly entry-level farm assistant migrant staff needed to plug dairy workforce gaps,” Federated Farmers dairy chair Richard McIntyre says.

The result is that farmers who can’t find New Zealanders to fill roles in a tight domestic labour market, and who are desperate to relieve pressure on already over-stretched existing staff, are forced to pay way over the odds for the entry-level migrant worker.

This undermines the financial viability of the business in a climate of high input costs and lower milk payouts, McIntyre says.

“Or it means the farm manager and owner can’t afford to hire, and takes on the extra hours themself, risking burnout and their own health.” 

Federated Farmers and DairyNZ are waiting for the conclusion of coalition negotiations to seek an urgent meeting with the two new Ministers of Immigration and Agriculture.

While some arable, sheep and beef farmers also employ migrant workers under the Accredited Employer Work Visa scheme, most applications are from the dairy sector.

“While the dairy sector supports – and can prove – payment of competitive wages for skills and experience, the reality is New Zealand-equivalent farm experience is not readily available overseas,” McIntyre says.

That means most of the international workforce enter New Zealand as entry-level farm assistants.

“Some have never been on a farm before, let alone have worked with stock or know how to drive a quad bike or side-by-side. The farm needs to invest considerable time and money to bring them up to speed,” McIntyre says.

“To have to pay an entry-level worker around $69,000 for an average 45-hour dairy working week is completely untenable for most farmers.”

It also has a significant distortionary effect on wage budgets. 

“When more experienced Kiwi staff who have worked hard to make progress along their career pathway learn a total ‘newbie’ is paid more than them, quite naturally, they’re unhappy.”

The situation will worsen in February when the median wage is set to rise from $29.66 an hour to $31.61.

A Federated Farmers survey in March this year found just under one-third of farmers employed migrant staff, and 73% of those farmers had employed staff under a visa requiring them to pay the median wage.
Nearly three quarters of those paying the median wage under visa conditions said this had caused an increase in other wages on farm.

“When they simply can’t afford to hire the staff, many farmers work the extra hours themselves. Our survey found 72% of respondents considered their mental health had suffered due to the difficulty and cost of employing and retaining labour,” McIntyre says.

He says farmers are a resilient and hardworking bunch “but there is a limit – they can break, and this flows on to their families, communities, and businesses”.  

When Federated Farmers and DairyNZ meet with the new Ministers, we’ll be making it clear that the dairy sector is working hard to make farming jobs more attractive to increase our workforce, McIntyre says.

“Through The Great Futures in Dairying plan, we have plenty of initiatives underway to sort out that pipeline and get Kiwis into farming jobs – but migrant workers still have an important role to play. 

“Shifting demographics mean we have a reduced number of working-age New Zealanders in our domestic labour pool, and we’re still seeing that a lot of people would prefer to live in big cities like Auckland than in rural communities. There are some real challenges that we need to overcome.

“That’s why we need reasonable access to international employees to plug the workforce gaps left by New Zealanders,” McIntyre says.

“For me, the problem is very clear – but so is the solution. I think the new Government has a real responsibility to act to help take some of the pressure off farmers.” 

Federated Farmers, New Zealand’s leading independent rural advocacy organisation, has established a news and insights partnership with AgriHQ, the country’s leading rural publisher, to give the farmers of New Zealand a more informed, united and stronger voice. Feds news and commentary appears each week in its own section of the Farmers Weekly print edition and online.

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