Adjournment – illegal labour hire

There is a seedy underbelly in the contract labour hire industry in this country. It is unfairly damaging the reputation of our agriculture industry and our tourism centres. Let me say from the outset that the majority of businesses do the right thing. They uphold the law and Australia’s sense of a fair go. My speech here, in this place today, is not directed at those people.

In my electorate of Hinkler, it is a widely known fact that labour contractors, who act as middle men in the horticulture sector, are exploiting workers and local growers. To a small extent, the problem has always existed. But it has escalated in recent years. Many growers prefer to use contract labour hire, rather than recruit seasonal workers themselves. It reduces the regulatory burden on their business. Contractors charge growers a margin of about five to 10 per cent on top of wages and superannuation. The contractors pay the workers the bare minimum or cash, and then keep the superannuation for themselves. It can take months for the contractors to pay their workers. By then, many of the workers have moved on. They could not be bothered to fight it or do not know their rights, so the contractor never has to pay them.

The contractors employ people already in Australia on 417 working holiday visas and student visas. Some even bring foreign workers into Australia illegally, and threaten to report them to authorities if they do not comply with their every demand. Contractors are demanding large sums of cash in exchange for signing off on the 88 days of specified work that 417 visa holders are required to do to get a second year in Australia. The contractors also charge the workers for accommodation and transport. They are staying in overcrowded private residential properties that do not meet fire and safety standards.

The Bundaberg region has endured two major floods in three years, and is now in the midst of one the worst droughts on record. In tough seasons, growers struggle to pay their bills on time. Some contractors are on selling the debts to other contractors. This can result in contractors ‘owning’ growers, and influencing their business operations.

In November 2012, the Bundaberg News Mail reported that two Turkish labour contractors appeared in the Bundaberg Magistrates Court accused of kidnapping a Sharon farmer over an unpaid loan of $119,000. The trial had been set down for earlier this month. But the case was dismissed when the complainant failed to show up. Unfortunately the nightmare for growers does not end at being intimidated and fearing for their personal safety. Under current legislation, growers can be prosecuted for crimes committed by contractors. Labour contractors are masters at ‘phoenixing’, where a business collapses, only to rise from the ashes under a new name, without debt and trouble-free. In many cases, investigators cannot locate the contractor so they go after the grower. I agree that growers who have been complicit should be fined, and in some cases jailed. But it should certainly not be the case for growers who have engaged contractors in good faith.

This problem is not confined to my electorate. In Warwick late last year, newspaper reports indicated 60 backpackers were owed close to $200,000 by a Korean labour contractor. In April this year there were reports 417 visa holders in Gippsland were being forced to work 30 hours for free before the contractor would sign off on their 88 days of specified work. The problem we have in Australia is that the issue crosses so many jurisdictions—local, state and federal government; immigration, taxation, Fair Work, agriculture, police, fire, health and safety, and tourism. I recently met with a senior investigator from Fair Work. Since October 2013, the Fair Work Ombudsman has been making surprise visits to farms throughout Australia to check seasonal workers are being paid their full entitlements. In the two years before the program had even started, the Fair Work Ombudsman investigated about 230 complaints in the fruit-picking sector nationally, recovering $80,000 for 107 workers.

I must congratulate the Bundaberg Regional Council and the other local authorities for the work they are doing to crack down on illegal hostels and overcrowding. State member for Burnett, Stephen Bennett, has been particularly vocal about the issue. In February I hosted The Nationals Party Room in Bundaberg, where members and senators heard about these labour issues from Bundaberg Fruit and Vegetable Growers executive officer, Peter Hockings. Peter’s advocacy on this issue is to be commended.

Together with Queensland Senator Barry O’Sullivan, I will next month host a small summit, bringing together representatives from the horticulture industry and the relevant state and federal ministers’ offices. Senator O’Sullivan is a strong advocate for regional Australia and I look forward to working closely with him to get some action on this issue. The exploitation of workers and growers by contractors is detrimental to the economy. Not only does it disadvantage growers and contractors who do the right thing, but it reduces employment opportunities for those with permission to work in Australia. This flows through to our tourism sector due to lower occupancy rates in hostels and fewer backpackers visiting the Wide Bay Burnett region.

My region needs strong tourism and horticulture sectors now, more than ever.