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Backpacker exploitation?

By Mike Pope - posted Wednesday, 7 October 2009

More than 150,000 backpackers come to Australia each year, usually after paying $230 each for a “417 working visa”. This enables holders to remain for 12 months and to work and earn money to augment the limited funds they bring with them.

If they wish to stay longer, a second 12-month visa, leading to the ultimate prize of permanent residency in Australia, may be granted but only if the applicant has worked for three months in primary industry. This usually means working on a farm, picking or packing fruit and vegetables, pruning or weeding, in a designated regional area of Australia such as the Darling Downs in Queensland or the irrigation areas of Victoria.

Sounds like an eminently fair and reasonable arrangement, one which enables backpackers to earn money and stay longer if they wish while providing farmers with a much needed workforce of fit young men and women seeking and willing to work. The scheme directs backpackers to where they are most needed and welcomed by existing businesses such as hostels, clubs and pubs, the tourist industry and shops, all of which benefit from their spending.


However, the word is out among backpackers: if you want to work for the lowest legal wage - or less - in a menial job, go to a regional centre and find work in primary industry. There, a cosy little arrangement between farmers and hostel operators takes advantage of the conditions which apply to the working visa under which most backpackers come to Australia. Those arrangements sometimes do nothing to support our belief in “a fair go”.

The problem is that under these arrangements backpackers are sometimes exploited and, being intelligent, sensible people, they usually know when this is happening but seldom know what they can do about it. If government was concerned about this it would ensure that on arrival in Australia, every backpacker with a 417 visa was provided with written advice on how to make a complaint and who it should be made to.

Problems which arise do so because of the practice of backpacker hostels which make “arrangements” with local farmers to be the sole supplier of labour to their farm. Since there are more backpackers than jobs, hostels use this to entice backpacker to stay at a particular establishment, using the inducement of employment being either available or likely, with the added “attraction” that transport to and from the place of work is provided by the hostel - at a price.

Backpackers are rarely able to secure employment from other sources since hostels tend to corner the market. They must therefore stay at a hostel to gain employment. Sometimes that employment proves to be unavailable to those staying at the hostel, or is offered only to those spending big at the bar, or is only available for a day or two.

Those using this as a strategy to attract backpackers to stay at their hostel are able to price the accommodation they offer more highly than they otherwise might do. They can and often do sleep six or more backpackers to a room and charge them as much as $20 each per night for the privilege. The hostel owner can then make some $800 per room per week and if a hostel has five rooms fully occupied, the return is very lucrative indeed.

Two backpackers from Estonia wryly noted that they were paying more for hostel accommodation in down-town Bundaberg than they had in central Sydney. Why? Because they needed to work three months in primary industry to fulfil the conditions attaching to a 417 visa. The only way they could get any work towards this goal was to stay at a hostel which offered employment in a primary industry.


It is not only hostels which take advantage of backpackers in this way. Some farmers are not averse to hiring hostel-provided workers under conditions which, at the very least, can only be described as the absolute minimum. Fruit and vegetable picking is often undertaken in hot conditions in relatively remote open fields. The farmer may provide a shade area, toilet facilities and drinking water. Many do not. Any complaint can be (and is) met with an invitation to find work elsewhere.

A very few unscrupulous farmers turn a blind eye when it comes to employing “illegals” - those seeking work though not in possession of a work visa - provided the prospective employee is willing to work for less than the minimum wage payable by law. Such practices involve both parties breaking the law. They also involve exploitation by the farmer of those who are most vulnerable.

There is no agreement between Israel and Australia on employment of visiting Israeli backpackers who can only supplement their funds - and many do - by working illegally and being employed for “cash in hand” at rates which are below the legal minimum wage. Israeli’s have little difficulty in finding work.

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About the Author

Mike Pope trained as an economist (Cambridge and UPNG) worked as a business planner (1966-2006), prepared and maintained business plan for the Olympic Coordinating Authority 1997-2000. He is now semi-retired with an interest in ways of ameliorating and dealing with climate change.

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