Rapid growth of PALM scheme 'has resulted in a big shake-up'
The Pacific Australia Labour Mobility (PALM) scheme has experienced transformative growth over the past five years, with the number of PALM visa holders in Australia increasing by 450%.
From 5,886 visa holders in June 2019, the figure soared to 32,513 by May 2024, according to the Development Policy Centre at the Australian National University.
This rapid expansion has significantly impacted the ten countries that supply workers to the scheme, reshuffling the rankings and creating new dynamics in labor mobility, said the Centre.
The remarkable growth of the PALM scheme is attributed to several factors. Preference given to PALM workers during the COVID-19 pandemic and the expansion from seasonal to multi-year work have been critical, said y Richard Curtain and Stephen Howes in their blog.
"The rapid growth of the scheme has resulted in a big shake-up," noted the Development Policy Centre at the Australian National University (ANU).
In a notable shift, Fiji has overtaken Vanuatu as the largest supplier of PALM workers. As of May 2024, Fiji has sent 6,379 workers, up from just 266 in 2019.
Vanuatu, while still significant, now follows closely with 6,217 workers, an increase from 2,215 in the same period, said the Centre. This change marks the first time since 2017 that Vanuatu has not held the top spot.
The growth rates among the ten PALM source countries have varied widely. Vanuatu, despite being a leading sender, has seen periods of both rapid growth and decline, particularly since March 2023. In contrast, Fiji's growth has been more consistent.
"Vanuatu has experienced spurts of rapid growth, but also periods of decline, especially since March 2023. Fiji’s growth, while not monotonic, has been more consistent," wrote Devpolicy's Richard Curtain and Stephen Howes.
Another interesting comparison is between the Solomon Islands and Papua New Guinea (PNG). Both countries started with fewer than 200 workers in 2019, said the Centre. The Solomon Islands has outpaced PNG, now sending 3,000 more workers.
PNG's recruitment has relied heavily on its Members of Parliament, whereas the Solomon Islands has used a more structured approach, including an Australian-based liaison officer to support new employers.
The rapid growth among smaller sending countries has led to a significant reduction in market concentration, said Curtain and Howes.
In June 2019, the three largest source countries (Vanuatu, Tonga, and Timor-Leste) held a 78% market share. By May 2024, the new top three (Fiji, Vanuatu, and Solomon Islands) collectively accounted for only 54%.
This diversification is seen as positive, providing more meaningful participation opportunities for a broader range of countries and giving employers more choices.
"The massive growth over the last five years has undermined the benefit gained from being a first-mover, and given other countries a second chance," they say.
Negative publicity around the PALM scheme in early large senders like Samoa and Vanuatu has also prompted employers to consider other options. Additionally, the introduction of new industries into the PALM scheme has eroded the advantage early movers had in horticulture.
Despite the rapid expansion, the data suggests a plateau in aggregate PALM growth for now. Larger countries like Timor-Leste and PNG, which still send less than 20% of the PALM workforce, may face challenges in significantly increasing their numbers without further growth in the overall scheme.
"The basic story for Australia’s PALM scheme is clear. We have talked a lot in our past writing about the importance of a first-mover advantage. But rapid growth has meant a big shake-up," Curtain and Howes observed.
For PNG, this means potentially waiting for the next major expansion to meet its target of 8,000 workers.
The ANU's Development Policy Centre continues to analyze the data, emphasizing the need for a comprehensive understanding of both Australia's and New Zealand's labor mobility schemes from a Pacific perspective.
