- The Guardian
- Issue #2199
Photo: rawpixel.com
A new McKell Institute report outlines how dozens of labour hire operators banned in other states have been drawn to NSW which has no licensing scheme, prompting calls to clean up the state’s notorious labour hire sector.
Labour hire firms supply workers to other businesses, often for short-term or seasonal work, sourcing and managing the labour on a host employer’s behalf. Most operate legitimately, though the structure of the sector makes it easy for unscrupulous operators to underpay workers and evade the law.
McKell’s analysis identified 63 operators stripped of a licence in Queensland and Victoria who are trading in NSW, equal to 5 per cent of all businesses whose licences were cancelled across the two states. McKell says that is likely an undercount.
The report, Exploitation Magnet, finds NSW is the largest state economy with no labour hire licensing scheme, and the only one of its neighbours without one. Queensland and Victoria have licensed operators since 2018 and 2019, South Australia extended its scheme to every industry in January, and the ACT has licensed since 2021. With no register to screen operators and no licence for them to lose, NSW stands out among the states on its borders.
The national Anti-Slavery Commissioner, Chris Evans, has told a NSW parliamentary inquiry that operators refused a licence in Queensland and Victoria are relocating across the border into NSW. The report identifies the Coffs Coast and the Riverina as long-standing hotspots for exploitation.
The Fair Work Ombudsman’s most recent horticulture inspections recorded non-compliance of 72 per cent in the Riverina and 61 per cent around Coffs Harbour and Grafton, among the worst rates in the country. Labour hire providers received 91 per cent of the infringement notices issued under the strategy. Earlier investigations documented backpackers and migrant workers on NSW farms paid as little as $3 an hour, and job ads offering piece rates as low as $1.86 an hour.
The report estimates around 300,000 temporary migrant workers in NSW, many of them in the labour hire arrangements where exploitation is most concentrated.
Unions NSW Assistant Secretary, Thomas Costa, said the findings demonstrated the need for reform. “Sixty-three operators thrown out of Queensland and Victoria are still trading in New South Wales, because we have left the door wide open.
“Workers here are being paid as little as three dollars an hour while the government waits for a national scheme that has been stalled for years. A licensing scheme would pay for its own running costs and put a cop back on the beat.”
McKell Institute executive director, Ed Cavanough said the evidence supported calls for reform. “The 63 cancelled labour hire operators we found operating in New South Wales is almost certainly an undercount.
“NSW has become the destination of choice for operators who cannot get a licence anywhere else. The fix is well understood, every neighbouring state has done it, and Victoria’s scheme shows it can pay for itself.”
NSW unions want NSW Labor to commit to a standalone licensing scheme, with legislation this parliamentary term and the scheme operating by 1 July 2027. The report recommends a scheme covering all industries, screening operators through a fit and proper person test and a financial viability requirement, run by an independent authority funded by licence fees.
