The New Zealand coalition government’s recent modifications to Recognised Seasonal Employer (RSE) policy settings generated considerable discussion at this year’s annual RSE conference. The event was well-attended by RSE employers, industry representatives, government officials, and key stakeholders from Pacific countries.
Employers expressed optimism about the policy adjustments, which are expected to help lower their participation costs, a goal they have been advocating for. Despite 17 years of operation, the RSE scheme remains largely comprised of small producers, with 62 percent of the 179 active employers in 2024 hiring fewer than 50 workers each, and half of them recruiting fewer than 20 workers.
For many smaller producers, the rising employment costs and shrinking profit margins, particularly following the pandemic, have made RSE participation increasingly difficult to sustain. However, representatives from Pacific nations view the recent changes—removing the requirement for employers to pay all RSE workers 10 percent above the minimum wage, eliminating guaranteed payment for a minimum of 30 hours of work per week, and lifting the freeze on worker accommodation charges—as unfavorable.
Starting in September, the 10 percent wage increase above the minimum wage will only apply to RSE workers who are in their third season or beyond. This adjustment has been introduced to acknowledge the experience and skills of returning workers, a request long advocated by Pacific nations. Critics argue that this creates issues, particularly since data indicates that many workers from these countries typically do not work three seasons.
For instance, while Vanuatu—the largest supplier of RSE workers—has an average return of three seasons, both Samoa and Tonga report averages of 2.9 and 2.8 seasons, respectively, with other Pacific nations having even lower return rates. Conversely, workers from Asian countries tend to return for more than three seasons, allowing them to take advantage of the higher wage rate more frequently.
Additionally, basing wages on the number of seasons worked might encourage workers to return to New Zealand more often to earn a higher income, potentially at the expense of their families in their home countries. Furthermore, simply rewarding length of service does not guarantee productivity or skill recognition, as there may be more skilled workers in their second season compared to those who have returned multiple times.
An alternative solution would be to empower employers to determine how to reward skills and experience, a practice that has historically been the norm. Employers typically have various ways to incentivize their workers, including increased wages or subsidized accommodation costs.
Under the new policy settings, the previously mandated guarantee of at least 30 hours of pay per week has shifted to an averaging system, requiring RSE employers to ensure payment of at least 120 hours over a four-week period. National MP Catherine Wedd indicated that this change aims to make New Zealand more competitive with Australia.
This reasoning raises questions, as diminishing worker protections and lowering wages may not effectively enhance New Zealand’s attractiveness compared to Australia. Historically, New Zealand sought to distinguish its RSE scheme from Australia’s Pacific Australia Labour Mobility (PALM) scheme by highlighting its stronger employer-employee relationships and worker protections. However, with Australia now offering both higher wages and better worker protections, New Zealand’s competitive edge appears diminished.
PALM employers guarantee a minimum pay threshold of A$200 per week and must cover accommodation and transport costs if they cannot provide at least 20 hours of work in a week. The RSE scheme, lacking similar protections, leaves workers facing averaged pay without a guaranteed minimum and likely higher accommodation costs due to the removal of the freeze on charges.
Despite these issues, some adjustments to RSE settings are justified, particularly as employers face rising costs. Ensuring the scheme remains viable for employers is essential for ongoing recruitment from the Pacific.
The primary concern lies in the lack of consultation with Pacific countries that will be most affected by the changes. Pacific stakeholders continue to await meaningful outcomes from the RSE policy review, which began before the pandemic and concluded in 2023 but has seen little progress since. In contrast, the recent policy changes were rapidly implemented.
Given the arguments on both sides regarding the new adjustments, proper consultation with Pacific stakeholders would have been prudent. As stated by Vanuatu’s High Commissioner to New Zealand, Jimmy Nipo, achieving the benefits of the RSE scheme requires a careful balancing act between the interests of New Zealand and the Pacific countries while maintaining important bilateral relationships through regular dialogue.