MARK OFOI  |   

The Asian Development Bank (ADB) recently reported a notable rise in Australia-New Zealand worker visa approvals from the Pacific between 2019 and 2023, by 2.3 times. The report articulated the need to balance the preservation of remittance inflows while tackling domestic labour shortages with a host of policy actions recommended. In the wake of more recent announcements for the new Pacific Visa Engagement (PEV) and the ongoing Pacific Labour Mobility Schemes (PALMS) to strengthen Australia’s migration policy for the region, work-visa opportunities have been reviewed with the intent to foster greater regional participation and integration.

For island economies with a long history of participation, the transition may be smoother—with lessons learnt, refinements can be made to accommodate the growing challenges while addressing policy priorities and development aspirations at home as identified in the report. What about Papua New Guinea (PNG), a relatively newcomer to the Australian labour-mobility program. What are some of the likely policy implications, apart from those stated?

Insights

Unlike the trickling of skilled-labour migration to Australia to the lucrative extractive industries in the past, the implications in this instance could be sweeping for PNG. There is the potential to lose a large set of skill workers across a broad range of sectors, given obvious benefits and lack of employable opportunities at home. In fact, this could be seen as a turning-point in mobilising the large pool of underutilised labour and youth bulge in PNG—where a large share of its population, comprises of young adults. The benefits from personal remittances to the local economy is not a strong point for PNG, unlike its smaller island neighbours—this could be a start to higher remittances back home and a case in support of a weaker kina. There is also the inclination to save, something that is difficult to do at home given low disposable incomes and high number of dependents per household. Serious employment opportunities at home have been far and wide, and concentrated only in the extractive sector. Thus, some policy implications will need to be consider in striking a wining balance.

Policy implications

To begin with, proper and adequate training will need to be provided on an on-going basis to meet the criteria while ensuring sustainability in the labour market and worker migration, for lasting benefits at home and abroad. With PNG’s economy dictated by the extractive industries, ensuring that there is a well-trained and educated stock of skill-labour to meet the next wave of developments, while addressing the demands of its flagging agriculture and services sectors at home will be tested.

Irrespective of the level of education and skill set, financial literacy training will be key and need to be embedded into training programs, to ensure monetary benefits are far and wide. This could be entrenched into PNG’s National Financial Inclusion Strategy to target the growing beneficiaries of this migrant worker program.

While the labour-mobility scheme is an opportunity to absorb some of PNG’s underutilised labour, it may be pursued with some restraint. It should not be seen as a quick fix to addressing the country’s high youth unemployment, but rather an outlet to meeting some of the demands that come with it, which is exerting pressure on its ailing infrastructure and living standards.

For authorities at home, this is an occasion to seriously address its development priorities, in that there is a risk of losing its most productive citizens over time, in both the public and private sector, should delivery of basic government services and working conditions remain haphazard. Work benefits such as the public service Home Ownership-schemes, which have been slow to get off the ground for many, should be prioritised to ensure the public services machinery remains functional. Serious targets in terms of enrolment rates and the number of trained and qualified public servants that enter the workforce, in key sectors such as the health, education and policing, should be pursued to ensure the stock of labour remains intact to meet the increasing demands of its growing population.

With a population of 9 million and counting, the labour mobility scheme could not have come at a better time for many. It is a matter of time, before a sizable portion of its labour is absorbed to participate in the Australian economy—labour quality will make or break this. Hence, while PNG may run the risk of a skill-labour drain, unlike its smaller island neighbours, it has a relatively large pool of labour that is yet to be tested and will be the key. This could also spell more job opportunities at home and abroad as its educated-young leave school and enter the labour market each year.


AUTHOR 

Mark Ofoi is undertaking a PhD in Economics at Griffith University and is a Senior Economist at the Bank of Papua New Guinea. 

The views expressed in this article are those of the author(s) and do not necessarily represent the position of the above-mentioned institution. For more information about Pacific island economies, visit Pacific Island Centre for Development and Policy Research.