Farm Labour Watch: A Bigger Wage Bill, and a Push to Fix the PALM Scheme
Two labour stories worth knowing about if you employ people on your farm: a wage decision that's already landed and is showing up in farm budgets right now, and a research review calling for changes to how the Pacific Australia Labour Mobility (PALM) scheme works, which could affect farms that rely on it for seasonal or ongoing staff.
This Year's Minimum Wage Rise Is Squeezing Farm Margins
The Fair Work Commission's 2026 wage decision lifted the national minimum wage by 5.97% and modern award wages by 4.75%, effective from July 2026 — the largest increase since 2023. In dollar terms, the minimum wage rose by $1.49 an hour to $26.44. For farm businesses already dealing with rising input costs, the timing has stung: average farm input costs are up around 10% (fertiliser alone up 43%, fuel up 14%), and some vegetable growers have reported production cost jumps of up to 79%, with wages making up an estimated 38% of their total production costs.
The National Farmers' Federation described the increase as having "potential to be quite difficult, particularly for small business operators," while the peak vegetable growers' body AUSVEG was blunter, saying growers "have no capacity to absorb any additional costs." At the same time, it's worth acknowledging the other side of this: farm workers are dealing with the same cost-of-living pressures as everyone else, and the wage rise reflects that broader economic reality rather than being specific to agriculture. As one farmer, Judy Plath, put it, "farmers are consumers too... when inflation rises they don't get a wage increase" either.
For farms with a handful of employees, the practical upshot is straightforward but not always comfortable: it's worth reviewing your current pay rates against the updated award rates as soon as possible if you haven't already, since getting caught paying below the new minimum — even accidentally, through an outdated payroll setup — creates a compliance headache well beyond the wage cost itself. If your farm currently tracks pay rates and award levels in a spreadsheet or on paper, this kind of annual wage decision is exactly the moment those records either save you time or cost you an afternoon of manual updates.
It's also worth remembering that award wage increases don't just apply to base pay — casual loadings, weekend and public holiday rates, and piece rates for contract harvest work are typically calculated as a percentage on top of the base award rate, so all of those figures shift too. Fair Work Ombudsman penalties for underpayment (even genuinely accidental underpayment caused by not updating rates in time) can be significant, and back-pay obligations apply regardless of whether the mistake was deliberate. A five-minute check against the current Horticulture Award or relevant award for your sector each time a wage decision comes down is a lot cheaper than sorting out back-pay for a whole season's casual workforce later.
A Major Review Wants to Fix Gaps in the PALM Scheme
Separately, a research report titled "Improving PALM," commissioned by the Scanlon Foundation Research Institute and authored by researcher Peter Mares, has proposed ten reforms to the Pacific Australia Labour Mobility scheme, which currently brings around 32,000 workers from nine Pacific nations and Timor-Leste into Australian agriculture, meat processing and aged care.
The report's central concern is that PALM workers are tied to a single employer, which it argues leaves some workers vulnerable to poor treatment with limited ability to move on if things go wrong. Other issues raised include a lack of Medicare access (workers rely on private health insurance that often doesn't cover general GP visits) and ongoing reports of underpayment and overcrowded housing in parts of the scheme. Mares' top recommendation is giving workers a greater right to change employers within Australia, alongside calls for national labour hire regulation and simpler PALM rules for the employers doing the right thing.
It's worth being clear about what this report actually says about farm employers: Mares himself was quoted saying "most [PALM employers] are very good," and the report's concern is with structural gaps in the scheme and a minority of bad actors, not with tarring every farm using PALM workers with the same brush. For the many farms doing this well, the practical takeaway is to treat this as a heads-up rather than an accusation — if reforms like national labour hire regulation do get adopted, farms already keeping solid records of worker accommodation standards, pay rates and hours are the ones that will sail through any new compliance requirements with the least fuss.
If your farm uses or is considering PALM workers, it's worth getting familiar with your current obligations around accommodation standards and pay now, rather than waiting for a possible regulatory change to force the issue. The scheme itself isn't going anywhere — Fiji and Timor-Leste alone each supply more than 5,000 workers to Australian employers — so getting the compliance side right is as much about protecting your own farm's reputation as it is about following the rules.
Practically, that means keeping clear, dated records of worker accommodation inspections, pay slips matching hours actually worked, and any welfare check-ins — the same kind of documentation habits that help with any workplace audit, PALM scheme or otherwise. Farms that already run tight record-keeping for their Australian staff generally find extending the same habits to PALM or other visa-holder workers isn't a big extra step, and it's a much stronger position to be in if the scheme's rules do tighten up over the next year or two.
References
'Disappointing' Fair Work Commission wage call hits farmers hard — Farm Online
https://www.farmonline.com.au/story/9277218/disappointing-fair-work-commission-wage-call-hits-farmers-hard/
Report points to exploitation, Medicare and visa concerns in Pacific islander jobs scheme — ABC News
https://www.abc.net.au/news/2026-02-05/palm-scheme-report-calls-for-change/106298514
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