Federated Farmers: Rating, not salary, is sticking point for farmers

Chris Lewis

The Government recently relaxed the 'mid-skilled' migrant salary threshold to avoid tough new restrictions down to $41,000. So why are farmers still unhappy?

They're unhappy because in the dairy sector, salary threshold is not the problem. In submissions to the Government the dairy industry did not object to the original threshold of $49,000.

The fact is, unless the migrant worker is a farm manager or earns over $73,000, they're deemed 'low-skilled' and booted out of the country after three years. Hardly an incentive to even apply in the first place, and disruptive and expensive for the farmer, who has to look for someone else to plug the gap.

The average entry level dairy worker salary is $40,960, or about $20 an hour for a 40-hour working week. After a year or two, opportunities to move into higher positions on other farms or within the same business means the average salary increases to $52,215.

"The reality is, until we can find/train sufficient New Zealanders to meet the growing number of dairy jobs, in a number of regions we need continued access to migrant workers to keep this vital sector strong.In some areas, few - if any - Kiwis apply for
dairy roles."

While it's true that average weekly hours on farms are high compared with other entry level positions, which means the per hour rate might be lower, these are not bottom-of-the-rung wages.

What we wanted from the Government was access to the 'mid-skilled' threshold. This is where it gets complicated, which is probably why there has been a degree of confusion in the media since the recent announcements.

The Government's new skills categories have two components: how an occupation is classified under ANZSCO (Australia New Zealand Standard Classification of Occupations) and a remuneration component.

Only occupations classified as Level 1, 2 or 3 on ANZSCO can be categorised as "mid-skilled", regardless of the level of remuneration received.

Apart from Farm Managers, who are classified at Level 1 - the highest level - on ANZSCO, all farm workers are classified as Level 5. So they could lower the threshold to $1 per hour and we'd still not be able to access the mid-skilled level of the policy framework and escape the tough new restrictions.

A worker classified as either Level 4 or 5 must be paid $73,299 to be considered highly skilled and to access less stringent visa conditions.

So far in 2016/2017 there have been three times as many temporary Essential Skills Visas granted to dairy workers at skill level 5 than skill level 1. After three years of effort by the employee and farmer to build up their skills, integrate them into the industry, and get them to the threshold of moving into management, these level 1 staff will now strike the stand-down rule and must leave New Zealand for a year.

If there was a prospect in three years' time that a whole lot of New Zealanders would spring forth to take the jobs, that might be okay. But the labour shortages in rural areas are much deeper than that. Increasing urbanisation and difficulties attracting people to often remote rural areas mean it will take a massive step change to address this shortage.

Meanwhile, under the blunt tool that is ANZSCO ratings as they apply to the dairy sector, without access to a mid-skilled classification, most migrant dairy workers are caught up in tough restrictions:
* Maximum of three years in NZ before a 12-month stand-down.
* Inability to bring children unless prepared to pay many thousands of dollars in international school fees.
* Inability to bring partner unless they can qualify for their own visa.

It's not as if the dairy sector, a major export earner, is overrun with non-New Zealanders.

Around 8per cent of the 40,000 people employed in the industry are migrants.

We are training Kiwis to work in dairy. A proposed new Federated Farmers dairy apprenticeship scheme aims to take in 500 trainees every year.

In some areas, such as in the bottom half of the South Island, few - if any - Kiwis apply for dairy roles. I farm in the Waikato and recently advertised a $55,000 pa farm assistant position. All but two of the 50 or so applicants were migrants. The two New Zealanders who applied were snapped up by other farms before I got to them.

The reality is, until we can find/train sufficient New Zealanders to meet the growing number of dairy jobs, in a number of regions we need continued access to migrant workers to keep this vital sector strong.

* This article was originally written for, and published, by The Dominion Post on its Opinion page.