2
The Australian dairy
industry at a glance
2018-19
3
Executive Summary
Since 2014, the dairy industry has been utilising the Labour Agreement pathway to source overseas
workers to fill skilled positions unable to be filled by Australian workers.
Over that time it has become clear to those utilising this pathway that the requirement that
nominated workers meet the English language proficiency in place for the Short-term stream of the
TSS visa and for ENS visas, meet standard ENS English language requirements, is problematic and is
acting as a barrier to obtaining these necessary workers.
The purpose of this submission is to highlight the results of a survey of current Dairy Industry Labour
Agreement holders and to seek certain concessions for the Dairy Industry Labour Agreement. It is
noted at the outset that the requirements for English language proficiency may not be consistent
with the governing legislation.
The higher IELTS Band Score for overseas workers seeking permanent residency is a barrier to
these workers achieving permanent residency. If it is accepted that the IELTS level required for the
subclass 482 TSS visa under the Labour Agreement (IELTS Band 5) is sufficient to enable the overseas
worker to perform the required work for the period of the TSS visa (4 to 8 years) then this should be
sufficient to enable that same employee to continue in this role as a permanent resident. It is
submitted that the English language level for both the TSS visa and the subclass 186 (and the
subclass 187 visa) be an IELTS score of be IELTS Band 5 with at least IELTS Band 4.
Suggested options to reduce further the impact upon dairy farm business owners are that the
English language proficiency for the Dairy Industry Labour Agreement be reduced to IELTS Band 5
with at least IELTS Band 4 in each component and IELTS Band 5 with at least IELTS Band 4.5 in each
component for the subclass 186 and the subclass 187 visas. This is consistent with the concession
granted to the Horticulture Industry in its Labour Agreement.
Dairy farm business owners have found that IELTS test takers are often able to achieve the required
proficiency in multiple tests but not in the one test at the one time. This issue could be alleviated by
a concession providing that the requisite Band Score be able to be obtained via cumulative tests
rather than in a single test.
The survey of current Dairy Industry Labour Agreement holders indicated that dairy industry
business owners are supporting their overseas workers to obtain further qualifications. The
overseas workers are quite able to obtain these higher qualifications whilst falling short on the Band
score required by IELTS. In fact, they often possess higher English language skills than their fellow
Australian students. It is respectfully suggested that this may be discriminatory. This situation could
be rectified by providing that overseas workers who achieve a Certificate IV or higher qualification
in the Australian VET system be relieved of the obligation to achieve IELTS qualifications.
There is an unintended consequence of the fact that the pathway to permanent residency via the
Dairy Industry Labour Agreement is only via the subclass 187 visa and not the 186 visa. The effect of
this is that overseas workers are unable to take advantage of section 7 of LIN19/216 which provides
a concession for overseas workers who have spent 5 years of full-time study in a secondary or higher
education institution where all tuition was delivered in English. This could be rectified by a
concession in the DILA which provides the essence of section 7 of LIN19/216 for the permanent
residency pathway via the 186 visa or by providing that the permanent residency pathway be via
both the subclass 186 and 187 visas.
4
The Australian Dairy Industry
Dairy is the fourth largest Australian rural industry and a key sector of the agricultural economy,
operating in eight rural regions (Figure 1). Nearly 8.8 billion litres of milk produced from 1.44 million
cows on 5213 farms resulted in farmgate production valued at $4.4 billion in 2018/19. Australia is a
significant exporter of dairy products with 35% of milk production exported in 2018/19. Australia ranks
fourth in world dairy trade. Total export value was $3.2 billion in 2018/19.
Figure 1. Dairying regions.
1
The dairy industry acts as a major source of employment across these regional areas. It is estimated
that approximately 46,200 people were directly employed on dairy farms and by dairy companies in
2018/19. Associated transport, distribution, farm services and research and development activities
represent further employment associated with the industry (around 100,000 people).
The average size of a dairy farm business workforce is 4.0 FTE, of which at least 2.0 FTE are family
and the remaining are in the vast majority employed locally. Traditionally owner-managers, partners
and family members have provided most of the labour on family farms.
2
However by 2017, survey
data showed that 86% of dairy farms now employ staffa 33% increase since 2007.
3
12% of dairy
farms have more than 7 employees and this is projected to increase to 20% by 2025.
4
A 2018 ABARES survey reported 48% of dairy farmers had problems recruiting.
5
The predominant
reason given was that applicants did not meet the job requirements, lacking experience and
specialised skills for the job. Dairy farms seek employees with higher skill levels than the horticulture
industry, reflecting the complex capabilities required in dairy farming systems. Projections indicate
that in the next 2-3 years, there is a substantial increase in the need for senior dairy farm hands and
for production and business managers (i.e. with qualifications and experience).
6
1
Dairy Australia 2019. Australian Dairy Industry in Focus 2019. Melbourne, 52pp. See Appendix 1 p. 33.
2
ABARES 2019. Demand for farm workers: ABARES farm survey results 2018. Research Report 19.10, Canberra, 46pp.
3
Dairy Australia 2007. National Dairy Farmer Survey 2007.
4
Dairy Australia surveys and workforce modelling.
5
ABARES 2019. Demand for farm workers: ABARES farm survey results 2018. Research Report 19.10, Canberra, 46pp.
6
Report on the key themes from stakeholder engagements (Australian Dairy Plan 24 July 2019).
5
ABARES (2019) reported that farms further from large population centres had more difficulty
recruiting.
7
None of Australia’s key dairying regions are near large population centres. The Regional
Australia Institute May 2018 policy paper ‘The Missing Workers’ indicates that in Australia’s eight
dairying regions there are not enough local workers to fulfil employment needs. Local labour pools
are small and continue to shrink as rural population loss continues (unemployment approaches
zero).
8
The challenges in workforce attraction and retention observed over the last two decades do not
appear to be easing. Indeed, the complexity of the workforce needs only appears to be growing
with the evolution of dairy farming systems and uptake of technology. Considering the long-
standing nature of the workforce shortages and ever-increasing dynamics of the dairy industry,
novel solutions that go beyond offering recruitment incentives are needed. While the industry is
investing heavily in the next era-solution for attracting and retaining a capable pipeline of Australian
employees for dairy farms, this submission discusses the importance of ongoing migration to fill the
immediate to medium term shortages.
In particular, it seeks consideration of a key barrier in the Dairy Industry Labour Agreement to
obtaining necessary skilled overseas workers: concessions on the English language requirement.
7
ABARES 2019. Demand for farm workers: ABARES farm survey results 2018. Research Report 19.10, Canberra, 46pp.
8
The Regional Australia Institute 2018. The missing workers: Locally-led migration strategies to better meet rural labour
needs. Canberra, The Regional Australia Institute, Figure 1, p. 5.
6
1. There is no legal basis for the requirement contained in the ‘Note’
to Schedule 4 Item 2 of the Dairy Industry Labour Agreement (the
DILA) that the English language proficiency of the applicant be as
provided for in Regulation 482.223 for the TSS visa and 186.222
and 186.223 for the ENS visa.
The Migration Act 1958 and the Migration Regulations
Section 140GC of the Migration Act 1958 (the Act) provides for work agreements as follows:
For the purposes of the definition of work agreement the regulations may prescribe
requirements that an agreement must satisfy.
Note: A person (other than the Minister) who is a party to a work agreement is an
approved work sponsor and must satisfy sponsorship obligations.
Section 5 of the Act defines work agreement as follows:
“work agreement” means an agreement that satisfies the requirements prescribed by
the regulations for the purposes of this definition.
Migration Regulation 482.243 provides as follows with respect to the required English language
skills for the subclass 482 visa in the Labour Agreement stream:
482.243
The applicant has English language skills that are suitable to perform the nominated
occupation.
Clause 7 of the template Dairy Industry Labour Agreement provides as follows:
7. Visa requirements
7.1 The Sponsor acknowledges that as part of the visa application process, the
Nominee will need to meet the criteria for grant of a visa as outlined in the
Migration Regulations.
7.2 This may include:
(a) requirements that the Nominee has the sufficient skills, experience and English
proficiency to perform the nominated occupation, and has demonstrated this
where requested by the Department; (emphasis added)
Schedule 4 of the template Dairy Industry Labour Agreement provides as follows with respect to
English language skills:
Item 2 English Language
Nil concessions (emphasis added)
Note: Overseas skilled workers nominated for:
7
• a TSS or SESR visa must meet English language proficiency in place for the Short-term
stream of the TSS visa
• an ENS visa meet standard ENS English language requirements
Clause 1.3 of the template Dairy Industry Labour Agreement provides a definition of ‘concessions’ as
follows:
Concessions means any variations to the requirements prescribed in the Migration
Legislation in relation to the age, skills, qualifications, employment background, level of
English Language proficiency and the TSMIT required for the nomination and grant of a
TSS, SESR or ENS visa. (emphasis added)
The legislation governing Labour Agreements does not appear to anticipate that there will be any
further requirement in addition to the requirement in regulation 482.243 that the English language
skills of the applicant be suitable to perform the nominated occupation.
The Dairy Industry Labour Agreement reflects the legislation in clause 7.2(a) and specifically provides
that there are no concessions (as defined) to this requirement which can give force to the
requirement contained in the ‘Note” in Schedule 4 Item 2.
Thus, there is no legal basis for the requirement contained in the ‘Note” that the English language
proficiency of the applicant be as provided for in Regulation 482.223 for TSS visa and 186.222 and
186.223 for the ENS visa.
The requirement for English language proficiency in excess of requirements provided for in the
Migration Act and Regulations has caused and continues to cause significant disadvantage to
Labour Agreement farmers and their workers.
The dairy industry has in the past accepted that the Department of Home Affairs has imposed the
requirement that applicants have an IELTS overall band score of at least 5 (IELTS Band 5) with a score
of at least 4.5 in each test component for the TSS visa and its antecedent visa the subclass 457 visa.
This has caused significant disadvantage to many dairy farm businesses who have overseas workers
who possess “English proficiency to perform the nominated occupation” but are unable for various
reasons to achieve the required IELTS score.
The disadvantage is exacerbated when workers have sought to apply for permanent residency and
the higher IELTS requirement of at least 6 for each component of the test for English language
proficiency has been enforced.
Dairy Australia surveyed eight current labour agreement holders who also have overseas workers
with DILA 482 visas in June and July 2020 (the 2020 DA Survey) and found that 100% of the farmers
surveyed had encountered significant issues meeting the English language requirements both at
subclass 482 TSS level and at the time of permanency residency application.
The 2020 DA survey established that 100% of the dairy farm businesses surveyed have lost or risk
losing skilled and proficient workers.
Six Case Studies (CS) were prepared as part of the 2020 DA survey.
The following comments are notable:
8
“He did the test for IELTS 5 three times and failed one aspect each time – he got 5.5 and 4.5
and some he got 6 but never the overall score of 5.
We lost a really good worker as a result of this as he had to go back to Malaysia … Now with
COVID restrictions we are doubtful if we will get him back.” (CS5)
“The worker easily got the IELTS 5 when he initially came in on the Labour Agreement.
The worker has spent a long time training and trying to get to the required level of IELTS 6 so
that he can become a permanent resident.
His wife is better at English than him and is helping to train him.
He failed in the written section of the test by .5 of a mark only - the rest was OK each time.
We are so worried that we will lose this worker.” (CS2)
“The Korean worker has tried for the IELTS 6 a number of times.
Last year he went home to Korea and studied hard to get his levels up.
He would get the 6 score in 3 out of the 4 categories and then fail one and each time he
would fail a different one.” (CS4)
The dairy industry seeks a review of the legality of the requirements contained in the “Note” to Item
2 of Schedule 4 and amendment of the Dairy Industry Template Labour Agreement to reflect the
legislation accurately.
2. The English language proficiency requirement for a 482 visa for the
purposes of the Labour Agreement should remain the requirement
for permanent residency of the same overseas worker.
In the alternative, the dairy industry submits that if it is accepted that the IELTS level required for the
subclass 482 TSS visa under the Labour Agreement (IELTS Band 5) is sufficient to enable the overseas
worker to perform the required work for the period of the TSS visa (4 to 8 years) then this should be
sufficient to enable that same employee to continue in this role as a permanent resident.
It is reasonable to conclude that over the period of the subclass 482 visa the overseas worker will
increase competency in the English language. However, they may not reach the high level required
to achieve IELTS Band 6.
“He came to our farm and we noticed he had an affinity with animals and he was a very
competent worker with the right attitude.
He began working with general farm work with horses and cows.
9
He then progressed to dairy duties and in his 4
th
year as manager of young stock and
irrigation.
We are able to give him more and more responsibility and as we are getting older and my
husband has a bad knee and I have a bad hip and knee this is a great relief for us.
We have recently moved into probiotics and organic soil conditioners and for the past 4 years
have used no antibiotics for mastitis and lung disease and we use 50% to 60% less Urea.
This worker is a very important team member with respect to this development on the farm.
He knows how to analyse all of the results and liaises with the university teams overseeing
the development.
He is an excellent communicator and can do everything we need at a high level.
I am worried that in the end we will lose him if he cannot get permanent residency and this
would be a massive loss to our business.” (CS1)
“This worker is managing very well at a very high level on the farm. He does not have any
problems with communication, understanding or written communication on farm with
management or staff.
We are desperate to keep this employee and it will be a huge loss to our business if he has to
go home.” (CS2)
In the alternative it is submitted that if the requirement is to remain the English language level for
the TSS visa within the DILA be IELTS Band 5 with at least IELTS Band 4 in each component and IELTS
Band 5 with at least IELTS Band 4.5 in each component for the subclass 186 and the subclass 187
visas.
Dairy farm businesses and their overseas workers have spent significant resources seeking to
achieve high IELTS levels.
All of the farmers surveyed by Dairy Australia in the 2020 DA Survey reported that they and/or their
workers had spent significant time and money pursuing the required IELTS qualifications.
Some farmers found that they had to teach themselves the IELTS framework and then tutor their
employees as there were no trainers in the local rural area. One paid a trainer to travel from the city
and live in at the farm for a week and provide intensive daily training.
The following are some responses:
“As to language training I have done a lot of this myself as it is difficult to find people in the
local area who have this speciality.
I have spent many many many hours with him training him up to be able to pass the test at
the IELTS 5 level for the Labour Agreement
10
I also engaged and paid a trainer from Geelong who came over and stayed with us and
tutored him 3 hours in the morning and 2 hours in the afternoon for a week.” (CS1)
“The worker has spent a long time training and trying to get to the required level of IELTS 6
so that he can become a permanent resident.
His wife is better at English than him and is helping to train him.
He has also taken lessons in Shepparton at $60 per lesson every week since March which is
up to $1,200 now.
He failed in the written section of the test by .5 of a mark only - the rest was OK each time
He has sat the test 4 times at a cost of $355 per test making $1,420 so far but testing was
stopped due to COVID.” (CS2)
“The worker eventually got a 6 but is was a huge struggle to get there.
She would get a score of 6 in some categories but not all at once.
The training and testing cost a lot – She had to sit the test 6 times - @$1,000.00 per test
made up as follows:
• $355 IELTS test
• $207 lost wages
• $100 lost wages husband – to care for kids (they’d all go down)
• $150 accommodation
• $100 travel, food etc
Each time she would have to go to Wagga or Melbourne and lose a day’s pay plus the cost of
travel we estimate it at about $1,000 per test.” (CS3)
“I have also given him English language training.
He estimates that he has spent $10,000 trying to get his English language levels up to an
IELTS 6.” (CS4)
“I did the coaching and I taught myself about the test as there is no one in the local
community who does this work.
I worked out how the test works myself and coached him and did trial tests with him and
really worked hard to get him ready for the tests.
11
He did the test 3 times and failed – he got 5.5 and 4.5 and some he got 6 but never the
overall score of 5.
It costs $330 each time to do the test.” (CS5)
3. An unintended consequence of the required high level of English
language proficiency is that overseas workers are discriminated
against when compared to fellow workers with the same
qualifications.
Definition of IELTS, ANZSCO and mapping to ACSF for VET requirements
Definition of IELTS
“The International English Language Testing System (IELTS) measures the language
proficiency of people who want to study or work where English is used as a language of
communication. It uses a nine-band scale to clearly identify levels of proficiency, from non-
user (band score 1) through to expert (band score 9).
IELTS is available in Academic- for people applying for higher education or professional
registration, and General Training for those migrating to Australia, Canada and the UK, or
applying for secondary education, training programmes and work experience in an English-
speaking environment. Both versions provide a valid and accurate assessment of the four
language skills: listening, reading, writing and speaking.
9
”
The relevant bands for the purposes of this submission are IELTS Band 5 and IELTS Band 6.
IELTS 5 Modest User
The test taker has a partial command of the language and copes with overall meaning in
most situations, although they are likely to make many mistakes. They should be able to
handle basic communication in their own field.
IELTS 6 Competent User
The test taker has an effective command of the language despite some inaccuracies, inappropriate
usage and misunderstandings. They can use and understand fairly complex language, particularly in
familiar situations.
ANZSCO
ANZSCO is a skill-based classification used to classify all occupations and jobs in the Australian and
New Zealand labour markets.
To do this, ANZSCO identifies a set of occupations covering all jobs in the Australian and New
Zealand labour markets, defines these occupations according to their attributes and groups them on
the basis of their similarity into successively broader categories for statistical and other types of
analysis. The individual objects classified in ANZSCO are jobs.
9
IELTS https://www.ielts.org/what-is-ielts/ielts-introduction
12
ANZSCO assigns occupations to one of five skill levels with Level 1 being Degree or Advanced
Diploma and level 5 being Certificate 1 or compulsory secondary school education
The occupational skill level required for the applicant for a Dairy Industry Labour Agreement is in
excess of ANZSCO skill level 3 as follows:
a. At least an AQF Certificate III (or equivalent) and at least 3 years (ANZSCO
requires only 2 years) recent and relevant work experience; or
b. at least five (5) years (ANZSCO requires only 3 years) of recent and relevant
work experience.
The Australian Core Skills Framework
The Australian Core Skills Framework (ACSF
10
) provides a detailed picture of performance in the five
core skills of learning, reading, writing, oral communication and numeracy. The ACSF has 5 levels of
performance in each core skill which enable identification and specification of the language literacy
and numeracy of students.
Within the Vocational Education and Training (VET) sector, the ACSF may be used to assess English
language proficiency for entry level to qualifications from the agriculture, horticulture and
conservation (AHC) training packages.
Mapping of IELTS to the ACSF and VET qualifications
The following table maps the required ACSF entry levels with the relevant AHC qualifications for
TAFE Gippsland which teaches these courses for dairy industry qualifications.
11
Code Qualification Literacy Numeracy
AHC20116 Certificate II in Agriculture 2 2
AHC30116 Certificate III in Agriculture 2 2
AHC30216 Certificate III in Agriculture (Dairy Production) 2 2
AHC40116 Certificate IV in Agriculture 3 3
Note: Diploma level in Agriculture requires a score of 3 across all categories.
The following diagram maps the ACSF 5 level scale with the IELTS 9 band scale.
12
10
Australian Core Skills Framework ISBN 978-1-921916-47-2 https://www.employment.gov.au/applying-acsf
11
Source TAFE Gippsland http://www.tafegippsland.edu.au
12
The learning Resources Group https://tlrg.com.au/blogs/news/acsf-v-ielts
13
When this is put together with the entry level requirements for Australians training for the relevant
Agriculture qualifications in the VET system it can be seen that Australian workers are required to
meet a lower level of English language proficiency as compared to comparable overseas workers.
While Australian workers are only required to achieve an equivalent IELTS score of 4 in order to
study for the Certificate III in Agriculture overseas workers are required to achieve an IELTS score of
5 to work at a similar level in Australia under the Dairy Industry labour Agreement. This is
potentially discriminatory.
In practice this means that Australian workers working alongside overseas workers with the same
qualifications may well have lesser proficiency in English than the overseas workers.
This conclusion is borne out in practice by the farmers who have found themselves encountering the
IELTS testing regime for their workers on Labour Agreements.
“I am certain that our current Australian staff would struggle with the test (IELTS 5 and 6).
We use an app called Slack to communicate on farm. The Malaysian employees (who failed
IELTS 5) used the App to a standard similar to Australian employees.” (CS5)
“I am absolutely certain that my Australian farm workers would also not have the high level
of English required for this test.” (CS1)
14
“Most Australians who work for us would fail the test - it is just too high and unnecessary for
the work to be completed.” (CS2)
Overseas workers easily obtain VET qualifications whilst in Australia despite not achieving the
required IELTS band level.
Case studies obtained by Dairy Australia in the 2020 DA Survey confirm that overseas workers are
encouraged and supported financially by dairy farm Businesses to obtain further qualifications whilst
on the subclass 482 visa under the Dairy Industry Labour Agreement.
These overseas workers have been able to study in their field of work in the Australian TAFE system,
whose tuition is solely in English, and were able to achieve qualifications yet they were unable to
achieve the required IELTS band score for visa purposes.
“While he was here we paid for him to do the Cert III in Agriculture. He was easily able to
complete this course with his English proficiency.” (CS5)
“Since he has been with us we have put him through the Cert III in Agriculture, Cert IV in
Agriculture and also a Diploma in Agriculture. He did some of these courses while on a
training visa.
He managed to complete these qualifications easily with his English level.” (CS1)
“We supported him to study a Cert IV in Agriculture and a Diploma in Agriculture since he has
been with us and he has passed these without any trouble.” (CS4)
The following is an extract from a reference provided by the Agriculture/Agribusiness Trainer of one
of the overseas workers who achieved Certificate III and IV and a Diploma in Agriculture. (CS1)
“H completed Cert III, Cert IV and a Diploma in Agriculture at the NCDE. Based on H’s grades,
attendance and class participation, I rate his performance in my courses as superior.
His standards were frequently higher than those of his English speaking class mates. H is well
and truly able to communicate in the classroom and got along well with everybody.
It is disappointing that the required English language tests are so onerous for foreign workers
such as H as, whilst they are perfectly able to study and achieve qualifications, communicate
and perform the required roles on a dairy farm they often have to leave the country and thus
the industry because they cannot meet standards which are in fact often higher than other
co-workers”.
For the larger farms this additional training may facilitate movement to higher skilled positions on
the farm. For family farms they may remain in the position albeit with higher qualifications and
greater value to the employer and job satisfaction for the worker personally.
The potentially discriminatory aspects of a requirement for English language proficiency in excess of
that required for VET training may be alleviated by providing an amendment to the Dairy Industry
Labour Agreement Template to the effect that overseas workers who achieve a Certificate IV or
higher qualification in the Australian VET system be relieved of the obligation to achieve IELTS
qualifications.
15
4. The IELTS score required for the DILA and subsequent permanent
residency should be cumulative.
The case studies obtained as part of the 2020 DA Survey indicate clearly that the test takers are
often able to achieve the required proficiency in multiple tests but not in the one test at the one
time.
“The Korean worker has tried for the IELTS 6 a number of times.
He would get the 6 score in 3 out of the 4 categories and then fail one and each time he
would fail a different one.
It would be so good if the test could be cumulative” (CS4)
“It would be better if the test could be cumulative as they sometimes get higher in one area
than in the other in different tests.
He gets so nervous when he has to do the test and then he does not achieve as good a result
as he could. It is hard to speak a different language if you are nervous.” (CS5)
“It would be better if the test did not have to be cumulative as a lot of people get nervous
and do not perform at their best in each test at the same time” (CS3)
It is submitted that if the English language proficiency requirement for the DILA, which is in excess of
the legislative requirements, is to remain, that this be reduced to enable a cumulative test result
rather than a test result on the one occasion.
5. There is an unintended consequence as a result of the permanent
residence pathway for the Dairy Industry labour Agreement being
via the subclass 186 ENS visa rather than either the subclass 187 or
the subclass 186 visa.
Standard TSS visa holders have the opportunity to apply for permanent residency via the ENS
(subclass 186) visa or via the RSMS (subclass 187) visa.
The Labour Agreement pathway is via the ENS (subclass 186) visa alone which provides a permanent
residency option in both metropolitan and rural and regional areas
Until 15
th
November 2019, all transition stream applicants for both subclass 186 and subclass 187
visa had access to the same English exemption for applicants who on the day the visa application
was made, had completed at least 5 years of full-time study in a secondary or higher education
institution where all tuition was delivered in English.
On the 16
th
November 2019, Ministerial Instrument LIN 19/216, removed this English exemption
from the subclass 186 applicants on the basis that it indicated a reflection of the government’s
intention to boost the regional migration in recognition of the difficulty and challenges of recruiting
and retaining employees in rural and regional Australia.
LIN19/216 provides as follows:
16
7 Subclass 187 visas—Temporary Residence Transition stream
Exemption from English language requirement
(2) For the purposes of paragraph187.222(b) of Schedule 2 to the Regulations, a
class of persons is specified in relation to an application for a Subclass 187
(Regional Sponsored Migration Scheme) visa if, on the day the visa
application was made, the persons had completed at least 5 years
of full-time study in a secondary or higher education institution where all
tuition was delivered in English.
The removal of the exemption for Subclass 186 visa when coupled with the fact that the only
permanent residency pathway via the Dairy Industry Labour Agreement is via the subclass 186 visa
means that the intention of the minister to encourage migration to rural and regional Australia is not
being met for the dairy industry.
A further unintended consequence is that employees who cannot access the subclass 186 visa
through the Labour Agreement pathway will potentially take advantage of the exemption and move
to other employers where they can access the subclass 187 visa with the result that the Labour
Agreement employer will lose the skilled and experienced worker they have invested in and
upskilled over the 4 year period and desperately need.
The dairy industry submits that the pathway to permanent residency via the Dairy Industry Labour
Agreement be via both subclass 186 and subclass 187 visas or in the alternative that a concession be
included in the DILA which provides the essence of section 7 of LIN19/216 for the permanent
residency pathway.
6. The Horticulture Industry Labour Agreement provides significant
English language concessions
The Horticulture Industry Labour Agreement provides significant English language concessions in
recognition of the severe difficulties that the horticulture industry is facing in recruiting and
retaining skilled and semi-skilled workers.
At the time the Dairy Industry Labour Agreement was negotiated the Department of Immigration
and Border Protection, as it then was, made it abundantly clear that the required English language
proficiency would be IELTS 5 and that this was not negotiable. This was despite the fact that this is
contrary to the Migration Act and Regulations.
13
The dairy industry is facing the same skill shortage as the horticulture industry and the dairy industry
refers to the materials provided at the time of negotiating the Labour Agreement.
14
The dairy industry is working hard to address the widespread skills shortage across the industry and
has been doing so for some time. However, the skills shortage is expected to continue for the
foreseeable future. Temporary skilled visas go some way to addressing the issue but longer term
solutions are also required.
The dairy industry seeks a concession similar to the concession granted to the horticulture industry
as follows: the English language level for the TSS visa be IELTS Band 5 with at least IELTS Band 4 in
13
See paragraph 1 above
14
See Appendix 1 below
17
each component and IELTS Band 5 with at least IELTS Band 4.5 in each component for the subclass
186 and the subclass 187 visas and that this apply retrospectively to all current Dairy Industry Labour
Agreements.
7. A pathway to permanent residency is essential to attracting
overseas workers to Australia.
The high IELTS level is a disincentive and has resulted in dairy farm businesses losing employees they
have upskilled and nurtured over years.
“We lost a really good worker as a result of this as he had to go back to Malaysia “.(CS5)
“If he does not get to IELTS 6 they will have to go back to South Africa.
This would be a huge loss for us.” (CS2)
“He is an excellent communicator and can do everything we need at a high level.
I am worried that in the end we will lose him if he cannot get permanent residency and this
would be a massive loss to our business.” (CS1)
The pathway to permanent residency for Labour Agreement holders was a welcome initiative but in
practice the required high level of English language proficiency (IELTS 6) is proving to be a barrier to
dairy farm businesses accessing this pathway.
The effect of this is that the permanent residency pathway does not in reality address documented
long term labour shortage problems. It also impacts on the certainty and workforce planning
capabilities of those dairy farm businesses.
Turnover costs are significant. Each time there is a turnover of employees in an organisation, there
are the direct costs of hiring, and other costs of decreased productivity for other employees as they
take on extra work, the cost of orientation and development, workforce morale and business
reputation.
15
Dairy farm businesses invest a large amount of time and money training workers on their farms,
even if the worker comes with a high level of skills. If the worker has to leave after 4 years, this
investment is lost.
16
A pathway to Permanent Residency is a key reason why skilled migrant employees choose Australian
dairy farms as their work place over other countries.
17
It is equally not surprising that a number of
dairy farmers have indicated that overseas workers are very important and a long term strategy for
the business, reflecting recent analysis by The Regional Australia Institute.
18,19
A recent PhD study into the role of skilled migration in the dairy farm workforce, supported by a
Dairy Australia scholarship, has found skilled migrants fulfil an important role in farm management
15
National Rural Advisory Council 2013. Report on the workforce planning capabilities of agricultural employers.
16
Dairy Australia 2017. The Power of People on Australian Dairy Farms 2017
17
Skilled migrant workers in the Australian dairy industry: farm owners and migrant worker perspectives on constraints,
opportunities and future workforce dynamics (unpublished – K Salgado, University of Melbourne).
18
Collins, J., Krivokapic-Skoko, B. and Monani, D., 2017. New Immigrants Critical to Australian Agriculture, Australian
Farm Institute, Farm Policy Journal Vol. 14 No.1, Autumn Quarter.
19
The Regional Australia Institute 2017. The missing workers: Locally-led migration strategies to better meet rural labour
needs. Canberra, The Regional Australia Institute.
18
for farms in different business stages (growing; consolidation; winding down) and in geographically
remote locations. Further, the PhD study found that the length of tenure and experience gained,
benefits both the farm and the aspirations of the skilled migrant for permanent residency and
increased farming experience.
20
Further research from the same PhD study details migrant employees’ intentions relating to working
on dairy farms, permanent residency or return home.
Twenty dairy farms employing skilled migrants were studied as case studies of the processes
involved in the attraction and retention of skilled migrants in dairying.
21
Most of the skilled migrants interviewed as part of the study were attracted by the potential to
achieve permanent residency, higher salary and standard of living in dairying in Australia (compared
to their own country or other countries like New Zealand) and were keen to develop skills and
remain in dairying (6/9 employees). Other respondents were interested in gaining experience and
skills in dairying to apply when returning to their home country (3/9).
22
• looking for an opportunity of staying here and become a resident”, (Employee 1)
• “The reasons we are working on this dairy farm are a lot more opportunities in Australia
compared to the UK or Europe. So yes, just opportunities for us”, (Employee 5 - Seeking
permanent residency. Manage and own a dairy farm in Australia.)
• “I wanted to learn things like the Australian dairy farming standards. […] start my own
business in future”. (Employee 6 - Skill development and continue in dairy farming)
In August 2018, Dairy Australia commissioned in-depth interviews with 13 Dairy Industry Labour
Agreement holders (‘The August 2018 Dairy Australia Interviews’) to investigate skilled migrant
recruitment and views on permanent residency.
One hundred percent of respondents answered “Yes” to the August 2018 Dairy Australia interview
question “Is permanent residency something you would like to support for your overseas workers at
the end of their current term? Please provide comment on the reason.”
The following are some of the comments:
“Definitely. The situation will not change in our lifetime. We just cannot get the staff with
skills in rural communities. There is competition with other industries and also with other
farms. Potential employees have lots of choice for jobs as there are so many available.”
(Respondent LH4)
“Our Labour Agreement worker desperately wants permanency. He is committed to farming
and hates city life so we do not think that we would lose him to the city if he got permanent
residency. It is a huge upheaval for people to travel to another country for work and we
20
Skilled migrant workers in the Australian dairy industry: farm owners and migrant worker perspectives on constraints,
opportunities and future workforce dynamics (unpublished – K Salgado, University of Melbourne).
21
Nine skilled migrants were interviewed. ibid
22
Salgado, K I (2018) Summary of the skilled migrant experience on Australian dairy farms – report to Dairy Australia,
University of Melbourne, Melbourne, Australia. Attachment ‘B’
19
would struggle to get people if there was no hope for permanent residency.” (Respondent
MH6)
“Absolutely. Our best example of this is a worker who has worked and saved and now wants
to put down roots and buy land and build a home but without permanent residency he
cannot do this. If they have no hope of permanent residency they will go elsewhere.”
(Respondent LH3)
“Absolutely. Permanence is vital. It is the main reason they come here. I believe that I can
guarantee that every employee I get from overseas will want to stay. I have a person who
came on a 457 visa years ago and they are still with us today. We offer a stable work
environment with opportunity to increase skills and become a part of a team with a pathway
to management who is valued. The cost of living in a rural area is cheaper than the city and
they can bring their family and become a part of the community”. (Respondent MH1)
“Definitely. Our current Labour Agreement worker is really worried about his future. He loves
it here and his wife loves it and has a job locally and they do not want to have to leave. If
there was permanent residency if would definitely encourage people to come and to stay and
be a part of the local community.” (Respondent MH7)
“Absolutely. All 3 of the overseas workers we had had permanent residency as their ultimate
goal. We had 2 vet trained workers from the Philippines who were committed to farming as
their qualifications were not recognised here. They wanted to stay on the farm.” (Respondent
MH8)
“I cannot stress how important this is - it is vital that the worker be able to have potential for
long term work so that they can bring their family here and settle in the area and support the
local community. We spend a lot of time training and to then lose them is a huge burden on
us resource wise.” (Respondent LH1)
8. Permanent overseas workers settle in regional and rural
communities and reinvigorate these communities.
Growing the rural labour work force through migration is one way the dairy industry considers it can
address the current skills shortage. Skilled migrant settlement in rural areas provides an important
pool of labour for dairying and this requires clear strategic policy development by government.
Immigrant farmers not only fill labour shortages, but they also bring with them new technological
20
insights gained overseas to apply to Australian farming and are an asset to the rural community in a
multitude of areas beyond the farming business.
23,24
As described in the recent Regional Australia Institute analysis, the visa system needs to better
reflect local labour needs. That report calls for a clear and consistent policy for migrant settlement in
Australia ‘to recognise and meet local labour needs in rural areas’. (p.10)
25
A result where the ambitions of skilled migrants are well matched to dairy farm skills requirements
will yield the most productive outcome for all parties.
Comments spontaneously provided by respondents to the August 2018 Dairy Australia interviews
are detailed below:
“They want to integrate into the community and make their home here.” (Respondent MH6)
“They want to participate in the local community and they use the schools and the sporting
clubs and help to revitalise the community- supermarkets banks shops etc. It is a win-win
situation for the whole community.” (Respondent MH4)
“People want to know that they can settle into the community and bring their family. This
has good flow on effects in the local community. The type of people who will want to work
on dairy farms would not want to live in the city so we do not believe that there is any risk
that we will lose them to the city once they get permanent residency.” (Respondent MH2)
In response to the prompt “The government has expressed concern that if people get permanent
residency they will leave the rural area and move to the major cities. What is your response to
this?” the following response was typical:
“There is no logic to the assertion that they will commit 4 years to dairy farming and an area
and then up and leave for the city - if anything they would go to another farm. If you look
around the Finley community, there are a lot of overseas workers and it has reinvigorated
the community providing support for local businesses and the community.” (Respondent
MH3).
The 2020 DA Survey of current Labour Agreement holders elicited the following comments
regarding integration into local regional communities:
“Our overseas worker is from Spain Her husband also works for us and they have 2 children.
The children aged 4 and 7 go to the local school.
23
Collins, J., Krivokapic-Skoko, B. and Monani, D., 2017. New Immigrants Critical to Australian Agriculture, Australian
Farm Institute, Farm Policy Journal Vol. 14 No.1, Autumn Quarter.
24
The Regional Australia Institute 2017. The missing workers: Locally-led migration strategies to better meet rural labour
needs. Canberra, The Regional Australia Institute.
25
Ibid.
21
The family go to the local church and play soccer.
The husband coaches the soccer team and they have all really integrated into the
community”. (CS3)
“Our overseas worker is from South Africa
His family are here. He has a wife who also works for us and a little son who was born here.
I think they would like to have another child but they are waiting to see what their future
holds as if he does not get to IELTS 6 they will have to go back to South Africa.
This would be a huge loss for us.
The little boy goes to play group and will go to Kindy next year.
His brother also works for us on one of the other farms and his wife works in one of the milk
plants.
The family go to the local church and have become involved with this community.
They shop locally and will use the local school in time as we are only 7 km from town and
there are school busses.” (CS2)
9. Cost to the dairy industry due to the lack of an Australian skilled
labour force
The dairy industry requires skilled people to work with animals and manage complex machinery.
There are very few jobs on the dairy farm which can be successfully undertaken by unskilled
workers.
The lack of skilled labour forces dairy farm businesses to employ people who do not have the animal
husbandry skills required to perform tasks which are outside their qualifications and which may be
inconsistent with animal welfare obligations.
Unskilled workers impose unnecessary additional cost pressures in an industry where margins are
already very tight.
For instance, an inability to detect sick and injured animals early and administer appropriate care,
costs dairy businesses tens of thousands of dollars a year in vet bills and lost milk production.
An example of this is the care and treatment of mastitis cows:
Mastitis is an udder infection which is treated with antibiotics. The milk cannot go into the system
while the cow is affected and when undergoing treatment.
If picked up early enough and treated early, the length of time that the cow is out of production is
reduced. Only skilled competent workers will be able to detect early mastitis.
22
If a mastitis cow is not picked up early it will become severely affected and may have to be
euthanised meaning total loss of that cow to production and loss of the rearing costs which have
gone into getting that cow to production.
Proper hygiene at milking and milking all of the milk from the cow (milking out) will help prevent
mastitis occurring in the first place. Having skilled competent reliable workers will enable us to
achieve this. Dairy farm businesses cannot rely on unskilled workers to make these assessments or
to know when a cow has been milked out properly.
Milk is tested at the milk company for traces of mastitis. If this is detected the milk will be
downgraded.
If an employee is not able to pick up and address a mastitis cow at milking the milk will be
downgraded costing significant amounts of money in penalties from the milk company. These
penalties are imposed because the cell count in the milk is above a certain level.
If farmers can keep the cell count below the level set by the milk company level they receive
bonuses and if it goes above that level they receive penalties.
It only takes one or two cows per day to cause the limit to be exceeded and result in loss of the
bonus and the imposition of penalties. Over a year for an average farm this can amount to a
significant amount in the vicinity of $30,000.00.
While the cow is being treated with antibiotics, extreme care must be taken to ensure that the
antibiotic does not get into the milk.
When the antibiotic cow is being milked, the skilled operator needs to identify the cow and then
manually divert the milk from the main vat. If this is not done and the antibiotic milk gets into the
main vat then the whole tanker load will be rejected at a cost of $15,000.00 to $20,000.00.
Failure to detect and treat other animal health issues such as failure to detect lameness can cost
$200.00 per cow plus a 5% loss of production. One case of clinical milk fever can cost $1,000 per
cow.
Employing unskilled workers is also a work health and safety risk because the work on a dairy farm
involves working with large animals and complex and dangerous machinery which they may not
have appropriate training to operate. Misuse of machinery can be very costly to the farm business.
Unskilled employees are by their nature transient and do not stay long enough for the dairy farm
business to train them to take up permanent skilled positions.
In addition, family members often have to perform these roles which means that they are working
excessive hours. The consequence of this is additional stress and burnout for the family members.
Many dairy farm businesses are forced to employ backpackers but their visa status does not permit
them to become permanent workers.
High staff turnover impacts significantly upon the ability to manage the farm business.
Sourcing new labour and managing unskilled workers is time consuming when farmers already work
long hours.
This extract from one of the Case Studies is typical:
23
“In three years we have had 38 employees from locally as well as backpackers.
There is a significant cost both financially and in time to our business recruiting and training
new employees just to have them leave after a few months.
Ironically the backpackers do not have to meet any English language requirements to work
on our farm and often they have less good English than the worker who cannot stay because
he cannot pass the IELTS test.”(CS5)
10. Conclusion
The dairy industry seeks the following:
1. Retrospective removal of the English language requirements contained in the Note to Item 2
of Schedule 4 of the Dairy Industry Labour Agreement and that this apply retrospectively to
all current Dairy Industry Labour Agreements.
2. In the alternative that the English language level for both the TSS visa and the subclass 186
(and the subclass 187 visa) be an IELTS score of be IELTS Band 5 with at least IELTS Band 4 in
each component and that this apply retrospectively to all current Dairy Industry Labour
Agreements.
3. In the alternative the English language level for the TSS visa be IELTS Band 5 with at least
IELTS Band 4 in each component and IELTS Band 5 with at least IELTS Band 4.5 in each
component for the subclass 186 and the subclass 187 visas and that this apply
retrospectively to all current Dairy Industry Labour Agreements.
4. In the alternative that if an overseas worker obtains a Certificate IV or greater qualification
in Australia that the requirement for the English test not apply and that this apply
retrospectively to all current Dairy Industry Labour Agreements.
5. That the IELTS score of Band 5 with at least IELTS Band 4 in each component be able to be
obtained via cumulative tests rather than in a single test and that this apply retrospectively
to all current Dairy Industry Labour Agreements
6. That the pathway to permanent residency via the Dairy Industry Labour Agreement be via
both subclass 186 and subclass 187 visas or in the alternative that a concession be included
in the DILA which provides the essence of section 7 of LIN19/216 for the permanent
residency pathway via the 186 visa and that this apply retrospectively to all current Dairy
Industry Labour Agreements.
24
APPENDIX 1-
EXTRACT FROM ADF/DAIRY AUSTRALIA SUBMISSION TO SKILLED MIGRATION LIST STAKEHOLDER
ENGAGEMENT
MIGRATION POLICY BRANCH
AUSTRALIAN GOVERNMENT DEPARTMENT OF JOBS AND SMALL BUSINESS
There is a widespread skills shortage in the dairy industry which cannot be met from the pool of
Australian job seekers in rural areas and migrants can meet this need.
There is a misconception that the dairy industry should be able to source labour from the pool of
unemployed in regional areas. With the unemployment rate in regional areas sitting at around 5 to
5.3%, there is effectively full employment. The Regional Australia Institute May 2018 policy paper
‘The Missing Workers’ indicates that in Australia’s eight dairying regions, there are not enough local
workers to fulfil employment needs.
26
Attracting and retaining skilled staff capable of managing a dairy farm is challenging, with much of
the limited regional labour pool not experienced and/or qualified in dairy. It takes time to build the
required capability to manage the many elements involved with a dairy farm, set against a backdrop
of an ageing workforce, technological advancement and farms looking to grow, consolidate or wind
down their business activities.
Traditionally, the family farm model trained largely family members on the job to perform at all skill
levels and in particular, at the higher levels. As a result, the sector is currently skewed heavily
towards a workforce aged over 55 years including a high proportion of owner operators and as these
older workers who are more highly skilled retire, the sector needs to replace these workers with
other highly skilled workers.
27
The loss of this age group from the sector requires a significant and
targeted resupply of high level skilled persons.
In addition, over the last 20 years the family dairy farm model has changed to larger farms with
expanding herd sizes and increased workloads with increased non-family labour and the need for
higher skill levels at the skilled Dairy Operator (FLH5 to FLH7 level) and Senior Dairy
Operator/managerial level (FLH8) and Award free managerial level.
As farm scale continues to increase, there are increased needs to attract and retain suitably skilled
labour and to improve on-farm employment practices.
26
The Regional Australia Institute 2017. The missing workers: Locally-led migration strategies to better meet
rural labour needs. Canberra, The Regional Australia Institute, Figure 1, p. 5.
27
Australian Farm Institute 2010. Towards a better understanding of current and future human resource needs
of Australian agriculture. Research Report Australian Farm Institute June 2010.
25
The proportion of dairy farms which employ people has been gradually rising.
28
The dairy industry
directly employed 42,000 people in 2016/17.
29
86% of dairy farmers employ labour, which equates
to a 20% increase since 2014 (66%)
30
and a 33% increase since 2007
31
(Table 1).
Table 1: Percentage of dairy farms employing labour
The number of farms with six or more employees across the industry is projected to increase (Table
2) from 4% to 20% by 2025.
32
Table 2: Number of employees required on dairy farms
Research undertaken in 2011 indicated that in a workforce sense, the industry faced a looming crisis
in several sectors due to ageing of its people, skilled workers exiting to the resource sectors, and
poor attraction and retention rates over an extended period which have left an insufficient pool of
young workers.
33
Projections at the time indicated that by 2018 over 102,000 of the current labour force (equating to
33.4%) would be aged 65 years and over. A staggering 56.2% of the current workforce was then aged
over 55 years.
28
Dairy Australia 2017. In Focus 2017: https://www.dairyaustralia.com.au/publications/australian-dairy-
industry-in-focus-2017?id=0B6288F1D65C4155998FCC67356182AF
29
Ibid.
30
Dairy Australia 2017. The Power of People on Australian Dairy Farms.
31
Dairy Australia 2007. National Dairy Farmer Survey 2007.
32
Dairy Australia surveys and workforce modelling
33
Agrifood Skills Australia 2011. Australia’s Region: Australia’s Futures. Agrifood Skills Australia Ltd,
Canberra.
26
Agrifood Skills Australia warned that shortages within the sector would be experienced between
2013 and 2018 as the resource industry’s demand intersected with the looming age crisis in
Agriculture and as the mining industry construction phase transitioned into actual mining
operations. The report stated that much would depend on Australia’s strategic response to skilled
and semi-skilled labour demand.
34
Dairy farmers are struggling to source the skilled labour they require in regional areas, viewing
skilled labour availability and quality, as well as succession planning as one of the key factors limiting
system change.
35
Dairy Australia surveyed 13 Dairy Industry Labour Agreement holders in August 2018.
The following are some of the responses to the question “Would you say difficulty recruiting
managerial level employees affected the performance and culture of the farm business? Comment on
the impact.”
• “Sometimes we just have to use people who are not ideal as there is no-one else. If you have
people who are not ideally suited to the industry you do not encourage a positive work
environment and there are often mistakes which can be costly in time and money.”
(Respondent LH5)
• “It definitely affects our financial performance if there is not the staff to do the work then we
cannot increase the number of cows we milk and expand as we want to and do pasture
renovation and other jobs that require labour.” (Respondent MH7)
• My husband and I pick up the extra work and keep the working routine going. We try hard to
make sure that our staff do not suffer or have to pick up the extra work so we have a good
culture on the farm and we protect them so they do not leave or have WHS and wellbeing
issues.” (Respondent MH2)
• “There is a serious skills shortage in the dairy industry.” (Respondent LH4)
• It seriously affects our lifestyle and in particular our ability to get off farm. We pick up the
slack and work long hours and this has a significant impact on our family life. (Respondent
MH5)
• “There is a definite skills shortage at the senior level. We can get FLH1 (Pastoral Award entry
level) but the higher skill set is near impossible to get from the local community. They are
highly sought after and get positions immediately they seek them.” (Respondent LH5)
One hundred percent of respondents replied that difficulty recruiting managerial level employees
affected the performance of the farm business “a great deal.”
34
Ibid.
35
University of Southern Queensland 2018. Feedbase Project (interim findings)
