A recent visit to Armidale by delegates of the World Bank has sought to explore a solution to reduce the high costs of transferring money from Australia overseas, a problem commonly experienced by our neighbouring Pacific countries. Pacific workers provide much needed labour for Australian companies during peak seasons, while their wages provide much needed income for families in their home countries. Many people from these countries who are part of our Seasonal Worker Program can loose of up to 16% of their income when using some international transfer services to send money home to their families.1 To put this into context, the Seasonal Worker Program is responsible for delivering up to 30% of the Tongan nation’s Gross Domestic Product (GDP). If transferring wages can be achieved more securely and cheaply by reducing transfer costs, it means that more of this money can get to where it is needed most.
Seasonal workers from Tonga are often employed in agricultural industries and reside in Regional areas, therefore Regional Australia Bank have been engaged to help find a solution to this problem.
Pleasingly, after a meetings comprising of delegates from the World Bank and Executives of Regional Australia Bank and the Tonga Development Bank, a partnership has been formed. This partnership will pave the way for the establishment of what will become known as the Pacific Remittance Voucher (PRV), the first of its kind in Australia. With the support of the Australia Government, AUSTRAC, Reserve Bank of Australia (RBA) and the Australian Securities and Investment Commission (ASIC), the PRV will replicate a model that has been successfully operating in New Zealand for the past two years, namely the ‘Ave Pa’anga Pau voucher remittance product, which has reduced the cost of money transfer from NZ into Tonga.
The Tongan Government sees this initiative as a great financial inclusion tool as wages can now be remitted online, while experienced seasonal workers often return to take leadership roles in their villages and educate others on the use of this services. So far, the PRV has recruited 4000 Tongan seasonal workers (and counting).
- Based on presentation provided by Tonga Development Bank pertaining to money transfer agency cost 2019.
Pictured above: From left to right; World Bank delegates Don Abel & Phillipa Roberts with Leta Kami, CEO of Tonga Development Bank, Campbell Nicoll of Regional Australia Bank and Sila Tupou from Tonga Development Bank.