Joanna Howe, a senior law lecturer at Adelaide University and Rhodes Scholar who has advised the Coalition government on its temporary 457 visa program, has issued a damning report arguing that the China-Australia Free Trade Agreement (ChAFTA) would “effectively surrender [Australia’s] autonomy over its migration laws” and invite a wave of Chinese workers into Australia, driving down local wages and conditions. From The Canberra Times:
Dr Howe’s report – the result of three months spent sifting through the FTA and its attachments – found the agreement negotiated by Trade Minister Andrew Robb “greatly increases the pathways for Chinese workers to enter the Australian labour market”…
Dr Howe’s report found that unless employers are required by law to prove a skills shortage exists, it will be “entirely possible” under the FTA for a hospital or care home, for example, to simply choose to replace its Australian nurses with Chinese nurses.
Engineers and “most trades” will also be exposed to direct competition from imported Chinese labour under the FTA as it is currently drafted.
In Dr Howe’s assessment, Article 10.4, paragraph 3, of the FTA prevents the Australian government from putting any cap on the number of 457 visas issued to Chinese workers in two critical lower skilled categories: “contractual service suppliers of China” – basically trade qualified workers and “installers and servicers of China” – low skilled workers who will be able to access temporary visas.
“Even if the Australian government wished to constrain the number of 457 visa holders more generally because local unemployment was high or to reflect changing economic circumstances, it could not do so with respect to Chinese citizens,” Dr Howe found.
“The absence of a cap means that Australian employers can engage unlimited numbers of Chinese citizens on 457 visas.
As I keep pointing out, Australia’s 457 visa program is already deficient since it does not require labour market testing in over 80% of cases.
Of the three types of occupations covered by the 457 visa program – Skill Level 1, Skill Level 2 and Skill Level 3 – the first two categories are exempted entirely from market testing. Thus, an employer can hire an overseas worker without advertising the job locally. Only Skill Level 3 occupations require labour market testing.
The differences between the various skills classifications are defined below:
- Skill Level 1: Managers and Professionals – bachelor degree or 5 years of relevant work experience
- Skill Level 2: Associate Professionals – diploma (2 year qualification) or 3 years of relevant work experience
- Skill Level 3: Trades and Technicians – Certificate IV (1.5 year qualification) or 3 years of relevant work experience or Certificate III including 2 years of on-the-job training
A breakdown of primary 457 visas granted by class is presented in the below table (secondary 457 visas, which are slightly lower in number, are not shown). As you can see, only 16.3% of 457 visas are skill level 3, which requires labour market testing.
Further deregulating the labour market via ChAFTA is lunacy given that skills shortages have all but vanished, with the Department of Employment last month reporting that there were “more than enough applicants with relevant qualifications, or appropriate skills and experience, for vacancies in almost every occupation”, and noting that “in 2014-15, there was an average of 13.6 applicants for each skilled vacancy (15.8 for professions and 12.1 for technicians and trades), of whom an average of 2.2 were considered by employers to be suitable”.
With Australian unemployment already elevated, skills shortages virtually non-existent, and jobs destined to disappear as mining investment slumps, the car industry closes, and housing construction rolls over, the labour migration system should be trimmed back, not expanded under ChAFTA.
