KG: Hello and welcome to the new series of Living Black. I'm Karla Grant. Tonight we bring you a special program coming from Cairns, in Far North Queensland, the scene of the much talked-about welfare reforms and the establishment of the new Family Responsibilities Commission. Later in the program we'll report on how these reforms are impacting on one North Queensland community and we talk to David Glasgow, head of the FRC. But first, a new scheme announced by the Federal Government to employ Pacific Island workers is causing divisions amongst political parties and interest groups. Leah Craven reports.

Reporter: It's being hailed as the answer to Australia's fruit-picker shortage which could save up to $700 million worth of produce. The Federal Government is trialling a seasonal guest worker scheme, giving temporary work visas to 2,500 Pacific Islanders to make up for labour shortages in the agricultural sector.

Denita Wawn, National Farmers' Federation: The Pacific Island seasonal worker visa is predicated on attempts by the farmers to actually find Australians to undertake these jobs.

Reporter: Critics argue alternatives could be found closer to home. Former national Labor Party president Warren Mundine is calling on the Government to offer those jobs to Indigenous communities to alleviate chronic unemployment. But the Prime Minister says the scheme won't take seasonal work away from Aboriginal and Torres Strait Islanders.

Kevin Rudd, Prime Minister: This is not an either/or situation. We are prosecuting a vigorous program for Indigenous employment across Australia.

Reporter: Mr Mundine wants the Government to take a hardline approach towards Indigenous unemployment, cutting dole payments to those who don't accept jobs, even if it means moving across the country.

Warren Mundine, Former Labor Party President: If you're working-capable and you can work, and there's a job there to be done, then you should take that job. And if you don't, then why should we be paying you welfare?

Reporter: But the Government says that's not an option.

Brendan O'Connor, Federal Employment Minister: What we won't do is support a notion that would force people to move far away from their home or their community.

Reporter: It seems support for Mr Mundine's proposal is hard to find. The Indigenous Social Justice Commissioner is siding with the Government.

Tom Calma, Indigenous Social Justice Commissioner: Saying that the job's available then suggesting that somebody is job-ready or able to go into that environment is two different things.

Reporter: The Coalition remain divided. Federal National MP Kay Hull is in favour of the plan and says many fruit growers in her southern New South Wales electorate are in desperate need of pickers. But Opposition Leader Brendan Nelson says there's enough unemployed Australians to meet the shortfall. The Government is promising to only use guest workers when all other options are exhausted.

Brendan O'Connor: It's very important that your viewers understand that the opportunities for people coming from overseas will be there, but only after employers have shown that they have worked very hard to employ local labour.

KG: Leah Craven with that report. And in next week's program Living Black will report on a successful program in Victoria hiring young Indigenous men from Cape York and the Kimberley region. Video journalist Emma Cook discovers why young Aboriginal men are prized employees.