BOB KINNAIRD on China-Australia Free Trade Agreement (ChAFTA)

Jun 10, 2016

An opinion piece in yesterday’s Financial Review by James Laurenceson dismisses union concerns on ChAFTA – ‘Don’t believe Chinese worker Free Trade Agreement scaremongering’, 9/6/16. It warrants a response.

Laurenceson’s claims do not stand up to scrutiny. They concern firstly the Chinese installers on the 400 visas, the subject of John Menadue’s blog below.

Laurenceson fails to mention the fundamental point that ChAFTA granted LMT-exempt entry to Chinese workers in this ‘installers and servicers’ category, for the first time in our FTA history.

So regardless of how many Australian workers are available to do the work, ChAFTA gives Chinese workers the right to the jobs as a binding international obligation on Australia. Before ChAFTA, a form of LMT was applied, however ineptly, namely ‘evidence that specialist advice/expertise from overseas is required’ – which Australian governments could tighten.

Removing Australia’s right to apply LMT not only takes jobs from qualified Australian workers, it opens the door to more foreign worker exploitation. The AFR article downplays the gross underpayment and other breaches of workplace laws the blog describes, saying merely ‘there had been a lack of adherence to other existing laws and regulations’.

Laurenceson is right about two things. He says the 400 visa existed long before ChAFTA and ‘a skirting of the rules needed to be guarded against before ChAFTA and the same is true today’.

Unions argued for tighter regulation of the 400 visa long before ChAFTA but the Coalition’s mantra is visa deregulation and cutting ‘red tape’. Locking the 400 visa into our FTA obligations makes proper regulation harder for future Australian governments.

Laurenceson’s second claim is that official figures show that far from being inundated with Chinese workers since ChAFTA entered into force on 20 December 2015, Chinese 457 visa grants have slowed dramatically in the first three months of 2016.

His arithmetic is correct but his conclusion is flawed.

His mistake is to imply that a slowdown in Chinese 457 visa grants means a slowdown in total Chinese temporary visa workers under ChAFTA. His article says nothing about Chinese workers entering under other elements of the ChAFTA package, notably the work and holiday 462 visa program for 5,000 young Chinese each year.

In just over 3 months (21 September 2015 when the 462 agreement started to 31 December 2015), 2,900 young Chinese nationals were granted 462 visas. At that rate the entire 5,000 Chinese 462 visa quota will have been filled by last March but the Coalition government has not disclosed this.

462 visas are ‘work visas’ with much less regulation than 457s. The Coalition government has given 462 visa-holders more work rights in Australia at the same time that ChAFTA entered into force.

Finally, Laurenceson misrepresents the impact of ChAFTA on LMT-exemptions in the 457 program.

He says that ‘the only change that ChAFTA brought’ was to extend the LMT-exemption to Skill Level 3 occupations, mostly the trades and only a small minority (16%) of Chinese 457 visa grants.

That claim is also wrong. Under ChAFTA Australia has a binding international obligation not to apply LMT to all occupations in the standard 457 visa program – meaning professional, managerial and technical as well as trades.

Before ChAFTA, the Australian Immigration Minister could by the stroke of a pen and a new legislative instrument require LMT for all 457 occupations. After ChAFTA, the Minister can no longer do so for Chinese nationals (and some other foreign nationals covered by ChAFTA).

Bob Kinnaird is Research Associate with The Australian Population Research Institute and was National Research Director CFMEU National Office 2009-14.

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