Meat processors say the next government must address their labour shortages

Two thirds of Australia's red meat processors can't operate at full capacity because of what they are calling a "labour deficit epidemic" in regional Australia.

With the federal election just three weeks away, the Australian Meat Industry Council (AMIC), on behalf of all of its 2000 members (who include processors, butchers and smallgoods manufacturers) has called on both the Coalition and Labor to help tackle the industry's inability to access enough skilled and unskilled workers in regional and rural Australia.

According to AMIC research there are 3780 job vacancies in the industry.

The cost to operate a business in the meat manufacturing industry was also high and the margins were not.

AMIC's research found that labour-related costs account for 55pc of the total cost to operate (excluding livestock purchases) was significantly higher than its main competitors Brazil and US.

"As one of the largest regional employers, and the country's largest trade exposed manufacturing industry, we are calling on the (incoming) Government to reduce the burden so red meat processors and the red meat supply chain can get on with supplying Australia and global markets with the world's best red meat," AMIC CEO, Patrick Hutchinson said.

"The red meat supply chain is facing a drought of the most severe magnitude - a drought in local workers who are willing to be trained up in our industry, and a visa system that is not fit for purpose.

"This is denying us ongoing access to overseas workers who have been trained to do the jobs that many local workers are either unable to fulfil the labour requirements, or are unwilling to stay in the industry.

"Further to this, (Labor leader) Bill Shorten's pledge to increase the pay of overseas workers by $11,000 per annum will add tens of millions to the industry's wage bill, significantly impacting our industry's ability to achieve a permanent and stable workforce."

According to AMIC's "Labour Discussion Paper", the labour market challenges reverberate down the entire supply chain.

The four key employment areas identified by AMIC in dire need of government support were a lack of funding for apprenticeships and traineeships, skilling the long-term unemployed, access to overseas workers with fit-for-purpose visas and the need for permanent migration into regional areas.

Mr Hutchinson said despite an average youth unemployment rate of 17pc across 20 regional areas in Australia, there had been a sharp decline in the number of school leavers being trained in meat processing, smallgoods manufacturing and butchery.

In the last financial year 73 processing plants advertised for almost 6500 new workers, which were filled by about 4600 local Australian workers.

"However, this has failed to fill or even maintain job vacancies, particularly as Australian local workers stay an average of less than six months in the job.

"AMIC members are finding that a large number of long-term unemployed people are unable to join the workforce due to their use of illicit drugs and alcohol.

"Currently out of necessity, overseas employees account on average for three per cent of red meat processors full-time skilled employees and 17pc of casual workers.

"Last week the Opposition leader's pledged that employers would be required to pay an additional $11,000 per annum to overseas workers on 457/482 temporary work visas if they were voted into government.

"Mr Shorten's announcement will only negatively impact workforce capacity further, particularly as a pay increase to employees under the skilled migration scheme will add tens of millions of dollars to the red meat industry's wage bill.

"Clarification is needed on Labor's position on 417 and 462 visas."

"Last month, the Morrison Government announced it would cut the permanent migration program from 190,000 to 160,000 places. This is disastrous for the red meat manufacturing industry as it reduces the pool of low-skilled and unskilled labour positions, which make up the bulk of the industry's workers.

"They key to Australia's regional growth is to attract foreign workers and have them stay permanently in the bush so they can join and rebuild diminished communities and add to economic growth of these regions, reducing the widening divide between over-populated cities and under-populated regional Australia."