Q&A: RSE scheme employers looking to cut costs

A man from Vanuatu works on an orchard in Hawke’s Bay under the Recognized Seasonal Employer program.
photo: RNZI/Johnny Blaze

Some employers in New Zealand who are part of the Recognised Seasonal Employer (RSE) scheme are looking to make the change due to costs.

That’s the assessment of Australian National University researcher Charlotte Bedford, who says support for the program remains high, but employers would like to see some of its elements changed.

Employers have expressed concerns about the additional fees they must pay on top of the minimum wage, rental restrictions and the requirement to guarantee a 30-hour work week.

The number of incoming workers from New Zealand and Australia’s programs also fell.

Don Wiseman asked Bedford, of the Australian National University’s Development Policy Centre, whether the sheen of seasonal schemes was wearing off.

CB: I can only speak to the New Zealand program, I don’t think the shine has necessarily faded from the program, it’s just that the demand side is probably just stagnant at the moment, and that’s driven by a lot of factors. There’s still a lot of promise in the RSE program. Employers are very supportive and committed to building relationships with Pacific workers, families and communities. I think the cost of participating in the program has become quite high for some people. So my sense is that yes, industry is just hoping to have some discussions with the government that maybe they can reduce some of the costs for employers at this stage. But I wouldn’t say the shine has faded from the program.

I think the public perception of this is probably that there is more talk now about exploitation and things like that, which is interesting because when the program was established in 2007, it was driven by the industry, they were looking for a workforce. One of their promises at the time was that with the introduction of the RSE program, they would clean up growing practices, eliminate the use of illegal labor, and clean up the horticulture and viticulture industries. So it’s interesting that a program that was designed to eliminate any exploitation, now there’s some discussion about that, and it’s also exploitative in itself, which I personally don’t think is a big deal. But yeah, it’s interesting.

DW: When we talk about employers being concerned about costs, have they added additional costs in recent years?

CB: Yes, there were some changes, during the pandemic, the working week was moved to 30 hours to ensure that 30 hours of work were paid each week. This was different from the practice of averaging the hours over the life of the worker’s contract. So they moved to a 30-hour work week, which I think is a very good thing because workers have fixed costs in New Zealand, quite a lot of fixed costs. So it’s important that, you know, they actually make enough to cover those costs and make some money to take home.

But on top of that, they’ve now increased the minimum wage and have to pay RSE workers 10% above the minimum wage. They’ve currently frozen accommodation costs, which was put in place in 2019, which means they can’t charge workers more rent than they were at the time. And then there are some new sick leave rules, which also add some costs to employers.

DW: The reason farmers are concerned about the 30-hour minimum is because oftentimes a horticulturist can’t work 30 hours a week, but the next week they can work 60. They want to stretch those 30 hours over a longer week, right?

CB: that’s right.

DW: Are they asking the government to change the rules?

CB: Well, I think they’re asking them to reconsider at this stage and see if it’s possible to average over the four weeks. So they don’t want to go back to the old practice of averaging over the length of the contract. But yes, I think there are some small growers who are very obviously at seasonal peaks where they might need a lot of workers for a fixed period but they’re struggling to find enough work to cover those 30 hours, particularly if they’re getting bad weather or the crop isn’t mature. So they’re just asking if they can reconsider that, thinking that the minimum wage for recreational workers is higher than 10% is probably just my personal opinion and needs further thought because it’s not clear to me why RSE workers should earn more than New Zealanders when the scheme is based on New Zealanders first. The intention is to (allow) employers to look for New Zealand labour first and then use RSE workers. It’s not clear to me why there’s this difference between what you pay an RSE worker and what you pay a New Zealander at the moment.

David: Well, speaking of numbers, New Zealand has increased the number of people they are prepared to take to 19,500. But this year’s number won’t be close to that. Why?

CB: Oh, maybe just an estimate, I think this is my estimate, they are short about 1700 workers. I think the recovery from the cyclones last year, you know the recovery that was going on there certainly probably reduced the number of workers in Hawke’s Bay and Gisborne. I think for some, maybe they didn’t get their full allocation. That might have to do with costs for some employers. For others, I think they may not have been able to get accommodation, find suitable accommodation last year, so they didn’t need to fill their full workforce allocation.

DW: The government is talking about bringing in more immigrants, right? The government says it wants to expand the quota.

CB: The pre-election promise was to increase the number to 38,000 over the next five years. I don’t think that’s necessarily driven by industry or horticulture and viticulture. Maybe the government thinks that if they do that, the RSE scheme might be extended to other industries as well. But I don’t think there’s that much demand for RSE in horticulture and viticulture, and I don’t think that’s actually been discussed further. So it will be interesting to see if that comes to fruition.

DW: There’s been a lot of discussion in places like Samoa over the last 18 months or so about the brain drain, where people gave up good-paying jobs to come to New Zealand to pick fruit, and now their numbers have dwindled. It’s the same thing in Tonga and Vanuatu, for similar reasons.

CB: The reasons are pretty much the same. I think employers are responding to the concerns that have been raised there. Samoa has a labour mobility policy, they haven’t implemented some of these changes yet, but they are making quite a few changes to the way employers recruit. Vanuatu has also reviewed its labour mobility policy, Tonga has a labour mobility supply management strategy. So yes, they are all looking more closely at who is going overseas and perhaps at some of the impacts that are going to be domestically in terms of losing some of those productive working age men and women. But employers have responded to those concerns and the encouragement from MBIE (New Zealand Ministry of Business, Innovation and Employment) to start looking at other countries. Papua New Guinea is certainly one of the main options.

David: The number of migrants going to Papua New Guinea has increased by 325%, and I think the number of migrants going to the Solomon Islands and Fiji has also increased significantly.

CB: Yes. Solomon Islands and Fiji both sent over 1,000 workers last year, which is the first time they’ve sent that many workers in a year. That’s good, it’s great to see, very positive. Employers are responding to the advice that people have given and maybe looking at other countries and not being so reliant on those three countries, especially as Australia continues to expand. Vanuatu, Samoa and Tonga also have quite a few workers going to Australia. So that’s a very positive shift.