Factcheck: Jose Ramos-Horta is right. PALM scheme is exploitative and the lion's share benefits Australia

In an opinion article published in The Australian, Jose Ramos-Horta, President of the Democratic Republic of Timor-Leste, has called attention to the people employed in Australia as part of the Pacific Australia Labour Mobility Scheme (PALM). The PALM scheme allows people from Timor-Leste and nine Pacific Island nations to work in low-skilled occupations across rural and regional Australia. There are currently more than 31,000 PALM workers in Australia. They are an essential part not only of our agriculture, meat processing and aged-care workforces, but of the towns and regions they live in.

In his article, President Ramos-Horta decries the poor pay and living conditions that some workers are subjected to. He cites a report from the United Nations Rapporteur on Contemporary Slavery, which found “alarming and sometimes severe patterns of exploitation by employers, labour hire companies and migration agents” in Australia, and recommended that the Australian Government “reform the Pacific Australia Labour Mobility scheme so that workers are treated equally with others.” Similar concerns have been expressed in reports by the Office of the NSW Anti-Slavery Commissioner and the International Labour Organisation.

As President Ramos-Horta makes clear, if Australia is going to maintain good relationships with its nearest neighbours, the ledger from the PALM scheme needs to be even. President Ramos-Horta states that “the scheme generates almost $1bn annually for the Australian economy, while just $184m is sent back to the 10 countries providing workers for Australian farms, abattoirs, hotels and aged care facilities.”

These figures come from a presentation made by DFAT at the 2022 Australasian Aid Conference. The program has nearly tripled in size since, but if they are accurate, it would mean that Australia is drawing four times as much of the benefit as the rest of the Pacific. DFAT’s numbers are broadly consistent with a 2023 World Bank study, which found that between 65% and 78% of the money PALM workers are left with after paying Australian taxes is spent in the Australian economy. Even the Australian Government’s own official advice to PALM workers is that they will be able to save or send home just one-third of what they earn. As President Ramos-Horta cautions, this imbalance could damage diplomatic and economic relationships, rather than enhance them.

Knowing exactly where the money generated by the PALM scheme goes would allow all involved to assess its merits. The regular release of up-to-date figures on the economics of the scheme would help answer the growing question as to whether or not the PALM scheme is really the ‘win-win’ that it is touted to be.

Verdict: Until then, the best available evidence supports President Ramos-Horta’s claim that Australia nets the lion’s share of the benefits of the PALM scheme.