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Wednesday, 21 October 2015
Page: 12053

Mr KELVIN THOMSON (Wills) (17:01): China is already our largest trading partner. Australian agriculture exports to China have trebled in the past six years, from $3 billion in 2007-08 to $9 billion in 2013-14. They will continue to grow in future. China had $22.7 billion—$12 billion of it in Australian real estate—in investment proposals approved by the Foreign Investment Review Board in the 2014 financial year, more than from any other country. Chinese investors bought more real estate in Sydney and Melbourne combined—almost US$3½ billion —than in each of London, Paris, or New York. Frankly the claim that Australia risks becoming less attractive to Chinese investment is fanciful, and out of touch with the reality of 2015 Australia.

Labor has made it clear that in government we would not have agreed to key items in the China-Australia Free Trade Agreement, including investor-state dispute settlement provisions and the general exemption from labour market testing in chapter 10. The Productivity Commission heavily criticised Australia's pursuit of FTAs in a 2010 report that recommended future agreements first undergo independent cost-benefit analysis and verification of the predictions produced by the Department of Foreign Affairs and Trade. More recently the Productivity Commission has pointed to a lack of transparency and a lack of rigorous assessment of provisions in recently signed agreements.

Trade Minister Robb has said Australian jobs would grow by 9,000 per year to be 178,000 higher in 2035. This is incorrect. Peter Martin, the economics editor at The Age, has crunched the numbers in the government's commissioned study by the Centre for International Economics on the combined impacts of the Korea, Japan and China FTAs. There is no separate study of the China FTA. That figure of 178,000 jobs does not appear anywhere in the CIE study. The three agreements will only create 5,434 net jobs in 2035. The government made a huge gaff by adding up all the job figures for each individual year without realising that each year's figure is a net figure counting both gains and losses up to that year. Peter Martin says that by 2035 Australia's workforce will exceed 15 million, meaning that the extra jobs will impact the unemployment rate by less than one-half of one-tenth of one per cent.

Ugly allegations of racism and xenophobia have been directed by the government and other China free trade agreement supporters to try to shut down debate. The allegations rest totally on the claim that the China FTA is no different from other trade treaties that Australia has entered into. But both the words and the meaning of the China deal are different from those of previous treaties. The definition of contractual service suppliers in the Chile deal refers to persons with 'high-level technical or professional qualifications, skills and experience'. The definition for the China, Korea and Japan deals was watered down to persons with 'trade, technical or professional skills and experience', with the words 'high-level' and 'qualifications' being omitted. The ASEAN and Malaysian FTAs, which Labor signed in government, provided labour market testing exemptions in the 457 visa program for very limited categories of foreign nationals. The China deal gives labour market testing exemptions to all Chinese nationals in the 457 program.

Furthermore, the initial period of entry for temporary contractual service suppliers in the Japan and Korea FTAs is one year. It is four years for the China FTA. The China deal also differs from other trade deals in that it has a memorandum of understanding which provides young Chinese with 5,000 work and holiday visas each year, with the right to work in Australia. It is regrettable that boosters of this agreement, rather than genuinely debating these serious matters, have resorted to name-calling, throwing around offensive and inaccurate jibes like 'racist' and 'xenophobic'. I am proud to represent, as best I can, Australian workers of whatever background. One-quarter of Australian workers are not Australian by birth, and fully one half of Australian workers have one or both parents who are not Australian by birth. They are entitled to our consideration.

Why are Labor's safeguards important? Labour market testing means a business has to prove there is a genuine shortage of skills and there are no local workers who can do a job before temporary visas are granted for migrant workers. The policy intent is to protect the employment opportunities of local workers. Without labour market testing there is no proper mechanism to ascertain that temporary migrant workers are needed. A recent joint investigation by Fairfax Media and Monash University revealed that hundreds of thousands of temporary foreign workers at any one time were being illegally exploited and underpaid in a widespread black economy for jobs. Fairfax Media said it had been flooded with emails of examples of illegal pay and conditions from across the country. The investigation found that hundreds of thousands of workers in food courts, cafes, factories, building sites, farms, hairdressers and retail shops were being systematically paid less than their legal entitlement.

Associated research by Monash University journalism students revealed that 80 per cent of foreign language job advertisements were offering wages below legal rates. Examples of exploitation include Taiwanese workers on 417 working holiday visas being paid $4 an hour to work in a meatworks; Mandarin-language websites openly advertising jobs at $10 to $13 an hour, significantly below Australia's legal minimum wage; and working holiday visa workers being paid $15 per hour to pick fruit—no tax, no super, no holidays, no sick pay. The minimum legal rate for such work is over $21.

One feature of these abuses is employers using labour hire middlemen. This enables workers to be called contractors rather than employees, and the labour hire firms melt into the night on the rare occasions that whistleblowers or regulatory agencies expose them, enabling the employer to avoid responsibility for the exploitation. But employment minister Cash rejected the suggestion of federal action to crack down on the labour hire companies driving foreign worker scams. She said regulation should come from the labour hire industry. This is a clear sign that the government has no real desire to stamp out the exploitation of foreign workers by unscrupulous employers.

I think the potential for that aspect of ChAFTA to be a precedent for future FTAs, including that presently being negotiated with India, is self-evident. Australia's labour mobility commitments in ChAFTA will be the new baseline demand from all countries with which Australia is negotiating FTAs. As I said, Australia is currently negotiating an FTA with India, once again under a self-imposed deadline of the end of 2015. India is the largest country in the 457 visa program, with 24 per cent of all visa grants.

I also want to mention the issue of mandatory skills testing. There is a side letter to ChAFTA that does away with mandatory skills testing by the Australian government, in a range of trades, before Chinese-trained workers come to Australia. These include high-risk trades like electrical work, which is inherently dangerous. We have stringent electrical training and safety standards in Australia and we must be very careful not to erode these standards, as doing so could lead to accidents, injuries or deaths.

Mandatory skills assessment of 457 visa applicants from high-risk countries, including China, was introduced in 2009 by the former Labor government to help restore some integrity to the 457 program. Before that, it was commonplace for employers to nominate Chinese and other workers for skilled 457 visas in trade occupations but work them as semi-skilled or unskilled workers. For example, some Chinese workers granted 457 visas as professional engineers were found to be working as labourers on Australian construction sites. There was also concern about trade training standards and qualifications and document fraud in some countries. Authorities like the World Bank say that those concerns are still valid.

We also ought to think about Australian manufacturing. Some of the hype about the China-Australia Free Trade Agreement fails to acknowledge that the benefits promised at the time deals are signed are often unrealised due to behind-the-border barriers and other unforeseen problems. Only 19 per cent of Australian exporters make use of Australia's existing FTAs, and somebody needs to point out that there are losers in Australian manufacturing, too, who have to date received little attention. The tariff reductions on paper products are inequitable, to the detriment of Australia's paper industry, as are the arrangements for fibre packaging. Companies like Armstrong World Industries, who do vinyl flooring, and Alucoil, who do aluminium building products, have expressed their concern about the impact of the China free trade agreement on their businesses.

Labor's changes will complement the China-Australia Free Trade Agreement by introducing safeguards to support local jobs, wages, conditions and skills and to deter the exploitation of overseas workers, and I welcome and support those changes. Labour market testing is to be written into migration regulations, and this obligation will extend to all work agreements in the migration system, including of course the investment facilitation arrangements under the China free trade agreement. A second aspect of these protections relates to Australian wages and conditions, with the requirement that the enterprise agreement rate has to be the reference rate for the purposes of the market salary rate. The third area of these protections is new conditions that require trade workers to obtain their occupational licence within 90 days, with a prohibition in their visa conditions to work without holding that licence and a requirement to notify the immigration department if the licence is refused or revoked, which will also be written into the regulations.

Labor's package also includes additional transparency requirements for the annual reports from the immigration department and a set of new guidelines which sets out some of the requirements, such as the Australian jobs test, training plans, skills transfer requirements and overseas worker support plans.

I welcome and support those changes that have been introduced and I hope that they act as an effective protection both for Australian workers and against the exploitation of foreign workers.