A Senate committee on Wednesday handed down 40 recommendations aimed at fixing the system.

The two-year inquiry received 131 submissions and uncovered significant evidence of wage theft and exploitation in sectors with high levels of temporary migrant workers.

Under the recommendations, the 88-day work requirement for backpackers to be eligible for a second-year visa would be scrapped.

Australia has agreed to dump the requirement for British backpackers as part of a free trade deal.

Labor senator and committee chair Raff Ciccone said the "slave" measure should be abolished across the board.

He wants the working holiday maker visa restored to being about cultural exchange rather than labour.

"Those who spoke to our committee told us that they were fed up with report after report, band-aid solutions and a lack of systemic improvement," Senator Ciccone told parliament.

The report calls for a major funding boost for the home affairs department to ensure more timely visa decisions.

Australia's quarantine capacity for seasonal workers would be increased and two Pacific labour schemes improved to address farm labour shortfalls.

Employers caught exploiting workers would receive bans from employing temporary migrants.

A small claims tribunal would be established to deal with wage theft and visas extended until cases were resolved.

The report also recommends a legally binding firewall between the Fair Work Ombudsman and home affairs to protect whistleblowers and temporary migrants who report exploitation.

Senator Ciccone said the inquiry gathered stories from across a wide spectrum of life experiences.

"There is one story that runs true through almost every one of them and that is the story of a broken system that is failing to deliver for those that need it to," he said.

He said temporary visa worker exploitation, wage theft, physical abuse and sexual harassment was documented throughout the inquiry.

Farm labour shortages, visa approvals taking years and regional communities suffering from the effects of transient workforces were also highlighted.

Senator Ciccone said the recommendations were not partisan and urged the government to seriously consider measures which would lock in future prosperity.

The report also recommends a new body of government, industry and unions to identify and address skill shortages.

Unions would be authorised to conduct audits on businesses suspected of exploiting workers.

Australian Associated Press