From the AFR:
The federal government is facing demands from China that it be allowed to import workers for projects funded by Chinese investors as part of the free-trade agreement.
The government is resisting, saying there would be a severe domestic political backlash should it ever agree.
Eager to land the FTA with China, it is looking at ways to target the issuance of 457 visas towards projects that the Chinese want to build and for which the workers and the skills cannot be obtained in Australia.
Is it any wonder? Given the huge labour costs in remote projects have played a significant role in derailing the financials of Chinese investment at projects such as Sino Iron.
From the West Australian, you get an idea of where this is going:
Colin Barnett believes new life will be breathed into his dream of a deepwater port at Oakajee, north of Geraldton, by Chinese state-owned giant CITIC Group after talks with the $430 billion conglomerate’s chairman in China on Saturday.
The $6 billion Oakajee project – which Mr Barnett has been trying to develop since he was resources minister in the 1990s – has languished and seemed dead since the previous proponent, Japan’s Mitsubishi, withdrew from the project last June.
But after meeting CITIC Group chairman Chang Zhenming in Beijing, Mr Barnett believes the company has a mandate from the Chinese Government to pursue Oakajee and co-ordinate the efforts of other state-owned enterprises with magnetite iron ore projects in the Mid West.
The Premier believes Chinese steelmaking giant Baosteel has had a similar direction to pursue the Anketell port development in the Pilbara.
He said the Government could start negotiating State agreements with both companies within a year.
Magnetite can be refined into very high grade 66% iron ore, which the Chinese want for their anti-pollution drive given it relieves them of the highly toxic sintering process required in lower grades. (As a quick aside, Barnett dismissed the Padbury proposal.)
In theory I’m not totally averse to this proposition. If it can be done within a strategic framework of specific national interest goals then why not? For instance, if the Government were to restrict it to a defined area earmarked for development that would lie idle otherwise then it’s worth doing.
But there are big problems. The social backlash is only the first. Policing tax revenues is another. Not to mention that in Australia’s intensive rent-seeking economy, it would be like a red rag to a bull with every project manager in the country figuring out a way to game the system and bring in cheap labour at ordinary Australian’s expense. You can imagine, for instance, the flood of operations out of Australia’s cities and into any Northern free trade zone staffed by modern-day coolies.
It would certainly be one way to accelerate Australia’s post mining boom adjustment!
