The Manufacturing Workers Union (MWU) has taken to the airwaves today warning that Australian workers could be excluded from jobs by the Australia-China Free Trade Ageement (FTA), which they claim allows the importation of workers for some major projects without the need for labour market testing:
New South Wales secretary Tim Ayres:
TIM AYRES: This deal will mean that on very ordinary construction projects in our cities and our suburbs that an investment of just 15 per cent will allow the company to import Chinese workers at lower wages and conditions, denying young construction workers and young apprentices the opportunity for work.
BILL BIRTLES: His union has hit the airwaves, trying to target blue collar workers.
…the FTA does contain a provision that allows a developer to bring in temporary workers from China without the need to test the labour market first.
Under what’s known as an Investment Facilitation Arrangement, so long as there’s a “substantial Chinese interest” in a major infrastructure project, temporary workers can be brought in.
As usual, Trade Minister Andrew Robb claims the unions are running a xenophobic scare campaign, and argues that standards are not being lowered under the FTA:
ANDREW ROBB: This is purely and simply a xenophobic scare campaign designed to distract attention away from the Royal Commission into union corruption…
What it does is ensure that if there is a multi-million, hundreds of millions or billions of dollar project – which may take a year or two to design and get ready before construction – that the, that companies have the certainty.
If they sign up to one of these agreements what it says is that if and when you are ready to start this project, if there aren’t- if there’s a shortage of certain sorts of skills – maybe they want 30 types of welders that aren’t available at the time – they’ve got to prove that they’re not available in Australia – then they will over a short period of time be allowed to bring in suitably qualified welders.
The disputed section of the Australia-China FTA appears to be the following (see bold):
Through a Memorandum of Understanding allowing for Investment Facilitation Arrangements (IFA) Chinese owned companies registered in Australia undertaking large infrastructure development projects above $150 million will be able to negotiate, similarly to Australian business, increased labour flexibilities for specific projects. This will be done on a case-by-case basis under arrangements similar to the former Enterprise Migration Agreements.
IFAs will provide flexibility for companies to respond to the unique economic and labour market challenges related to large infrastructure development projects. They reflect the Government’s focus on strengthening infrastructure development and attracting investment, leading to the creation of jobs and increased economic prosperity for all Australians.
IFAs will operate within the framework of Australia’s existing 457 visa system and will not allow Australian employment laws or wages and conditions to be undermined. The nationalities of eligible overseas workers under IFAs will be non-discriminatory, consistent with Australia’s 457 visa system.
It is worth pointing out that a side letter to the FTA, signed by Andrew Robb and his counterpart, Chinese Minister for Commerce Gao Huncheng, has also excluded 10 occupations from proving they have the requisite skills to work in Australia. These occupations are:
- Automotive electricians;
- General electricians;
- Specialist electricians;
- Cabinetmakers;
- Carpenters;
- Carpenters and joiners;
- General motor mechanics;
- Diesel motor mechanics;
- Motorcycle mechanics; and
- Joiners.
Further, the FTA permits up to 1,800 chefs, martial-arts coaches, Mandarin language tutors and traditional Chinese medicine practitioners to apply for 457 visas, and allows 5,000 Chinese visitors a year to be given the right to work under a new Work and Holiday program.
Regular readers will know that I strongly oppose the loosening of temporary work visas at this time. Unemployment is already high, with youth unemployment much worse. Moreover, the Australian economy is about to undergo its biggest adjustment since the early 1990s recession as the one-in-a-century mining investment boom unwinds and the local automotive assembly industry shutters.
The skills shortages report from the Department of Employment, released in March, also revealed that “employers continued to recruit skilled workers with little difficulty”, “consistent with the softness in the labour market”. Further, “with the demand for skilled workers relatively subdued over the past few years, and historically high numbers of graduates entering the labour market from both higher education and vocational education and training, long standing shortages across many occupations have been addressed”.
Given such a weak labour market, where is the sense in making it easier to import labour from China rather than using local workers, in turn adding to the pool of under/unemployed and depriving our youth of employment opportunities?
And don’t forget, this will not just be an issue in far-flung major mining projects. The new wave of big investment projects is in urban property and tourism.
The MWU, therefore, makes a valid point. Without local labour force participation in construction projects, where is the benefit for Australians? Once completed, these projects will employ very few people. They will also be largely foreign owned, so the profits will flow mostly offshore.
The China FTA, therefore, smells like another sell-out by the Government of Australian workers.
