Wage expectations hitting ag

19 Aug, 2015 06:30 AM
The return on investment at those [$30] hourly rates doesn't work

GINA Rinehart-backed Bannister Downs Dairy has warned Australia has a problematic new "workforce culture", in which young people did not want to do menial labour or wanted to get paid too much money to do it.

Bannister Downs managing director Sue Daubney said many young people did not want to work in agriculture, which is why the sector needed to recruit foreign workers on 457 or temporary work visas.

"It is not just the cost of [labour] and the cost of managing it, which we all share in WA but the growing issues that we are getting with culture and the work ethic that is coming through and the preparedness to do what needs doing," Ms Daubney told a Committee for the Economic Development of Australia luncheon in Perth on Tuesday.

Bannister Downs employs the equivalent of 45 people and secured the backing of Mrs Rinehart's Hope Downs Dairy last year, which allows the third-generation family dairy to build a $20 million processing plant to increase milk production fourfold.

Mrs Rinehart has warned for years that Australia was becoming too costly and sparked controversy several years ago when she highlighted African workers were willing to work for less than $2 a day, helping lower production costs to produce iron ore that left her worried "for this country's future".

Ms Daubney said the mining boom had inflated wage expectations for unskilled labour.

Speaking on the sidelines of the CEDA event, Ms Daubney said unskilled blue-collar workers had been able to get high wages that agriculture struggled to compete with. She said workers wanted about $30 per hour, compared with a typical base rate of pay of between $20 and $25 per hour.

"We have a low margin. The return on investment at those [$30] hourly rates doesn't work," Ms Daubney said.

She said there was also a "new workforce culture" that posed a problem - a lot of people refused to do the jobs agriculture required, such as bringing cows in for milking at 3am.

"We have normally two temporary backpackers at any one time and they will do whatever has to be done where as it is sometimes hard to get local or permanent Australians to do those jobs, not always but it is an issue," Ms Daubney said. "It's the new workforce culture that is the big problem. They expect to be paid high dollars and expect certain conditions. Agriculture can't afford that."

Ms Daubney said agriculture faced other challenges, including access to funding because the sector generated low margins and low growth, which required patient, long-term capital.

Agriculture is tipped as a key sector to tap rising demand for food from developing Asian economies and buffer Western Australia from the downturn in the mining industry.

Investment banker John Poynton called for greater political and business leadership to better diversify WA's economy, including reversing the flow of government sector superannuation funds to the east coast in a bid to develop a thriving wealth management sector in Perth.

He said that the economy had rode off the sheep's back and then iron ore and everyone was now asking, "what's next"?

"Perhaps if we had thought about that a while ago we wouldn't be now going about what's next," Mr Poynton said.

He said the nation faced challenges that went beyond short-term political cycles, which required a more mature debate and stronger leadership.

Mr Poynton backed foreign investment in agriculture but said Australian asset managers were sending funds offshore that could be deployed locally if the "right settings and right terms" were in place.

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19/08/2015 8:13:04 AM

The government tells farmers what they have to pay workers in a regulated workforce,they then force on farmers deregulation and say how good it is for us.we get compared to China but they don't get audited,work safe,have their government ban live exports, Aussie farmers need a balance to survive.
19/08/2015 9:21:34 AM

So if she could get good people to work for low wages she would make more profit? Why would good people work for low wages?
19/08/2015 10:30:51 AM

Exactly Jeckle, the workforce in Aust is subsidised by business. Yet the same workers on inflated uncompetitive wages want to bash farmers for everything we do. Farmers are the ones competing against the world who have lower wages and imposts to business. The reason next to nothing is built in Australia anymore, is because the wage earners of Australia don't want to compete. They believe they are entitled to be paid at least double what everyone else in the world gets paid. Ag in this country is doomed while ever wages continue to increase.
19/08/2015 1:25:39 PM

Gee there's a surprise - not being able to find staff that will work at 3 a.m. for the princely sum of $25/hr.
Sir Les P
19/08/2015 5:59:02 PM

Now that a lot of CSG & Coal workers have lost their jobs, in the bush we call it Resources Disease they want $500 a day for cattle work, the rate is $250 +gst if you are gst registered.
19/08/2015 6:56:04 PM

How many un-employed are , plenty .How many un-employable or too posh to push cattle ?Better to be un-employed Michael ? Plenty of farmers doing it for a lot less then $25 .
Jock Munro
20/08/2015 4:59:02 AM

Gina may have imagined that she was set to make a 'fortune' out of dairying and now sees cheap labour as a solution. At the same time her top executives probably have million dollar plus pay packets ! Agriculture could pay better wages if at all if there was more profit but unfortunately our urban elite political masters are all too keen to deregulate our marketing and flood the domestic market with cheap imported product.
Steven Barlow
20/08/2015 5:31:16 AM

Corporate farming cannot compete with family farms so the answer is get out of farming and stop whining. We have low margins; boo hoo. Why because corporations and foreign investors pay too much for land. Why does the poor mongrel doing the work have to keep the business afloat?
20/08/2015 6:21:01 AM

Its the mining boom that created the high wages expectation. They sucked all the labour out of other sectors.- why would you work in a back breaking job in a small country sawmill for example for 23 bucks per hour when you can get 40 at a mine site with high safety standards and all the other perks. If farmers are really concerned they should be protesting against and trying to stop the Adani coal development and watermark mine, becuase again they will suck up rural labour and create high wages expectations.
Steven Barlow
20/08/2015 6:48:44 AM

Sue Daubney give me the job description and your pay rate. Let everyone see the whole picture. Lets face it, it is crappy work unless you own the place so it is worth paying extra.
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