Income from seasonal employment outweighs trade and aid from Australia, says new research

‘Oku mahu’inga ange ‘a e malava ke ngāue ‘i ‘Aositelēlia’ ki Tonga ‘i he tokoni mei he ngaahi fonua muli’ pe fefakatau’aki, fakatatau ‘eni ki ha fakatotolo ‘a ha ongo ākonga ‘Aositelēlia. Na pehē ‘oku fu’u fakafalala ‘a e Pasifiki’ ‘i māmani mo e tokoni ‘oku fakamole ia ki he kakai totongi tukuhau ‘a ‘Aositelēlia’. ‘I hono fakafaikehekehe’i’, ko e kau Tonga ko ē ‘oku ōmai ki ‘Aositelēlia ‘i he polokalama ‘a e taha ngāue fakafa’ahita’u’ ‘oku lelei ia ki he ‘ekonōmia ‘a ‘Aositelēlia’. Pea' na pehē kuo taimi ki ‘Aositelēlia ke fakaava ha toe matapā lahi ange tu’uma’u ki he kau folau ki ai’.

The ability to work in Australia was more important for Tonga than aid or trade, according to research by two Australian academics.

They said the Pacific was heavily aid-dependent region in the world and aid cost the Australian taxpayer.

In contrast, Tongan workers who came to Australia on seasonal worker programmes benefitted the Australian economy.

And they said it was time for Australia to consider opening up more  permanent migration options.

Professor Stephen Howes and Beth Orton from the Development Policy Centre at the Australian  National University in Canberra, said the amount of  money sent home  by workers on the season rural workers’ programme exceeded the combined value of Australia’s financial assistance and the kingdom’s trade balance.

In 2019 a total of 3737 Tongans went to Australia to work in the Seasonal Worker Programme.

The most recent available estimate of net earnings by SWP workers was made by the World Bank in 2015. It calculated that Tongan seasonal workers made an average A$9759 each after tax. The ANU researchers said this figure would have risen since then.

Beth Orton (Left), Stephen Howes

Total estimated earnings for Tongan seasonal workers in Australia since 2012–13 are estimated to have risen from Aus$11.7 million in 2012–13 to Aus$36.5 million in 2018–19.

“We can compare SWP net earnings with other major sources of foreign exchange that Australia provides to Tonga,” Howes and Orton said.

“Last year we provided Tonga with Aus$28.9 million in aid and last year, Tonga is reported to have exported Aus$2.3 million worth of goods to Australia.

“As you can see from the graph SWP net earnings exceed Australian aid to Tonga and imports from Tonga both separately and combined.”

Tonga was the first Pacific nation to achieve this milestone in 2018–19.

Of all the Pacific nations, Tonga had embraced the potential of seasonal work most enthusiastically, the researchers said.

In 2018, Howes and Orton estimated 13% of Tongans aged between 20-45 left the country each year to work on either Australian or New Zealand farms.

“It’s not only an impressive achievement by Tonga, but also the sort of fact that should change the way we think about Australia’s relationship to our Pacific family,” they said.

“Aid is important, but more aid is not the answer to the Pacific’s development problems.

“Already the Pacific is the most aid-dependent region in the world. Moreover, whatever the benefits to Australia, aid costs the Australian taxpayer.

“Labour mobility by contrast benefits the Australian farmer, and the Australian economy more broadly.

“Tonga has long had duty-free access to Australia, but is unable to take much advantage of it. Tourism is important to several Pacific nations, including Tonga, but very few Australians holiday in Tonga.

“Temporary schemes like the SWP work well for Tonga, but suit other Pacific nations much less well. We need to move beyond temporary and start talking about expanding permanent migration options.

“There are also no fewer than three policy processes and inquiries in Australia currently underway to which this striking fact about Tonga is relevant.”

The first was the government’s preparation of its new International Development Policy. It is meant to look at expanding opportunities for Pacific workers to fill workforce shortages in regional Australia.

The second was the Parliamentary inquiry ‘Australia activating greater trade and investment with Pacific island countries.’ The inquiry would examine opportunities to strengthen employment links.

The Senate Select Committee on Temporary Migration was looking into the effect of  temporary migration on the Australian economy, wages and jobs, social cohesion and workplace rights and conditions.

“It’s unfortunate – and symptomatic of the disconnects in this area – that this Committee won’t also look at the impact of temporary migration on sending countries, especially in the Pacific,” the ANU researchers said.

“Tongan seasonal workers compete mainly with foreign backpackers, not Australian farm workers.

“Between them, let’s hope these inquiries look into what other Pacific countries can do to emulate Tonga’s achievement, and what more Australia can do to make the future of the Pacific less about aid and more about mutually beneficial economic opportunities, like the SWP and labour mobility more broadly.”

The main points

  • The ability to work in Australia was more important for Tonga than aid or trade, according to research by two Australian academics.
  • Tongan workers who came to Australia on seasonal worker programmes benefitted the Australian economy.
  • They said it was time for Australia to consider opening up more  permanent migration options.

For more information

Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School. stephen.howes@anu.edu.au

Beth Orton is a Research Officer at the Development Policy Centre and works on labour migration across the Pacific region. She recently completed a Master of Demography at ANU. elizabeth.orton@anu.edu.au

Tonga: net earnings from SWP, aid and trade

By Stephen Howes and Beth Orton, edited by Philip Cass

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