Australia should consider abolishing the three-month regional work requirement for holidaying backpackers and fill the labour gap with an expanded seasonal worker program to help boost Pacific economies, the World Bank argues in a new report.

Backpackers outnumber seasonal workers by six to one in Australia’s agricultural sector, with more than 36,000 taking jobs, mainly in horticulture, each year.

For backpackers on 417 working holiday visas, the “specified work” requirement allows them to extend their one-year visa by another year if they undertake three months’ work in the agricultural, mining, fishing or construction industries in a regional area.

Overwhelmingly, backpackers fill labour market shortages in horticulture, picking fruit on farms across the country.

But the “88-day” requirement (as the three months is defined) has been plagued by scandal over the abuse, underpayment and exploitation of backpackers who are dependent upon their employer to fulfil their visa requirement and remain in the country.

The seasonal worker program brings workers from nine Pacific countries and Timor-Leste into Australia to work in the horticulture industry, tied to an employer or a labour-hire company.

While it is much more tightly regulated than the backpacker fruit-picking industry, the seasonal worker program too, has been marred by 12 deaths of workers in five years, convictions against labour hire companies for “serious exploitation” and threats made against workers for complaining about their conditions.

Seasonal workers are similarly vulnerable because they are tied to employers, with limited independent avenue to complain against exploitation.

The federal government established a migrant worker taskforce in October 2016 to address migrant worker exploitation, and gave $20m to the Fair Work ombudsman to expand its investigations into the issue.

The World Bank report said Australia should consider abolishing the backpackers’ specified work clause to “level the playing field”.

“The government provides an explicit incentive for backpackers to work in the agriculture industry by offering them a second-year visa extension conditional on them undertaking work in rural areas,” it said.

“Eliminating the second-year visa extension for working holiday visa holders would remove the incentive in place for the 36,264 backpackers in rural areas, who predominantly work in horticulture.

“This is not to suggest backpackers should be entirely replaced with Pacific workers - they are also an important source of labour for the horticulture sector - but simply that levelling the playing field would be a step in the right direction.

“If all these positions were to go to Pacific Islanders, this would represent an additional A$282m in net annual income gains for the Pacific. This is equivalent to approximately 26% of the Australian government’s entire aid budget for the region.”

The World Bank report says the seasonal worker program has been successful in generating remittances to developing Pacific economies, and that bringing workers back to Australia season after season provided regular income to families in the Pacific as well as a reliable labour pool for Australian farmers.

“Australia’s seasonal worker program continues to deliver significant advantages, not just for Australian farmers, but for the workers, households and communities of participating Pacific Island countries,” the report said.

“Over a six-month employment period, participating Pacific Islanders remit an average of AU$2,200 while in Australia, and transfer AU$6,650 in savings home at the end of their stay.”

Australia’s minister for international development and the Pacific, Concetta Fierravanti-Wells, said the World Bank report would assist the government in improving labour mobility programs, including the establishment of a new Pacific labour mobility scheme.

“As we identified in our 2017 foreign policy white paper, increased opportunities for labour mobility from the Pacific to Australia will help to strengthen economic resilience and contribute to stability and prosperity in our region.”

The World Bank report does not address, in any way, issues of abuse or exploitation in either of the seasonal worker or working holiday-maker program.