Wednesday, 21 October 2015
Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015, Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015; Second Reading
Today is the first anniversary of the passing of the late Gough Whitlam. Gough Whitlam was the first Australian political leader to reach out and engage in ties, diplomatic and deeper, with China. Labor is very proud of Gough Whitlam and of his legacy. We are certainly proud, in particular, of the courage he took in reaching out from modern Australia to modern China to improve our relationships.
Being proud of that legacy is, in part, because Labor believes that on balance trade liberalisation secures benefits for the peoples of the world and the nations that engage in it. One of the big issues that has been debated in this parliament and beyond this parliament has been the progress of the China-Australia Free Trade Agreement. Negotiations for ChAFTA started 10 years ago under the Howard government. They continued under successive Labor administrations and they have been continued, again, by successive Liberal administrations. Now, today, there is legislation in the House to enable the processing of the China-Australia Free Trade Agreement.
Labor has been supportive of the principle of a China free trade agreement but there has been great concern expressed by Labor, by trade unions and by people in the community that the ChAFTA agreement, as it is currently constructed with all the architecture and its enabling guidelines, regulations and laws, is one that insufficiently protects Australian jobs. I am pleased today to be able to report to the parliament that Labor has been able to achieve significant concessions from the government in negotiations to improve the China-Australia Free Trade Agreement. I congratulate the work in particular of our trade spokesperson, Penny Wong, and I must acknowledge the constructive contribution of the Minister for Trade, Andrew Robb.
Labor has argued for changes in three areas. The package announced today shows that the government has agreed to new legal safeguards in these three areas—safeguards that would not otherwise have existed. These legal safeguards will: (1) require labour market testing for all work agreements; (2) require 'market salary rate' for standard 457 visas to use enterprise agreement rates, where they exist, as the salary benchmark; and (3) implement more stringent visa conditions for 457 visa workers in trade occupations. The safeguards put forward differ in some part to the mechanisms that Labor previously proposed in the draft amendments. But the important point is that the key safeguards that we have argued for have been achieved. Labor's focus throughout this process has been on achieving the right outcomes for all Australians. The safeguards that we have achieved will be part of migration law: they are just as legally binding as the act, and the amendments to the regulations will have the same legal effect as amendments to the act. The deal that we have negotiated represents a comprehensive package of new safeguards that address Labor's concerns regarding the China free trade agreement but, importantly, they also go to the broader temporary skilled migration program. These are real improvements, with important legal safeguards now in place to protect Australian jobs and to ensure that Australians can all—I stress all—fully benefit from ChAFTA.
Labor has always believed that trade agreements should support Australian job opportunities for all Australians, not just some Australians. To us, an agreement which improves the job security of some but diminishes it for others is not a satisfactory outcome. It is not the best possible outcome we can argue for. We were concerned—as were trade unions representing workers, people in the community, legal academics, and many others—that ChAFTA would erode important safeguards in Australia's temporary skilled migration system. Labor's specific and legitimate concerns, shared by the community, were articulated as follows: (1) that, unchanged, ChAFTA would allow Chinese-funded infrastructure projects to bring in 457 visa workers with no obligation for the employer to see if local workers were available for the job; (2) that there were no legal safeguards to prevent the undercutting of Australian wages and conditions; (3) that it was removing existing mandatory skills assessment for 457 workers under this treaty in trades such as electricians, mechanics, carpenters and joiners. Now Labor has negotiated an agreement with the government to introduce safeguards in these three areas of concern—to achieve a ChAFTA-plus arrangement.
These safeguards will require labour market testing by employers covered by all migration work agreements, including work agreements under ChAFTA's investment facilitation arrangements. They will improve the market salary rate requirement for 457 visa workers to ensure that temporary skilled migration does not undermine Australian wages and conditions by, in fact, using enterprise agreements as the benchmark for assessing whether market salaries being paid. Further, these safeguards will require 457 workers such as electricians, but not solely electricians, to obtain an Australian occupational licence from the relevant state jurisdiction in which they are working as a condition of their visa within 90 days of arrival, ensuring Australian skills and workplace standards will be maintained. These safeguards will be written into migration law in the form of new migration regulations.
I will briefly outline the detail of Labor's safeguards. Labor's safeguards include amendments to the migration regulations which will require employers under work agreements to carry out labour market testing. This will require advertising for jobs for local workers before turning to 457 workers. Labor has also secured improvements in the immigration department guidelines which will require employers who enter work agreements to: provide a labour market needs analysis showing there is a genuine need to use overseas workers; implement a training plan to tackle skills shortages by training local workers; and adopt an overseas worker support plan to provide their 457 workers with information about their workplace rights, entitlements and other support services. Our safeguards also give the immigration minister the ability to require a minimum number of local workers to be employed on these projects, or to impose ceilings on the number of overseas workers. These requirements are not set out in the China FTA or in the Investment Facilitation Arrangement Memorandum of Understanding—only in immigration department policy. But under Labor's safeguards, the labour market testing requirement will be written into migration law in the form of new migration regulations. This will ensure labour market testing is a legally binding obligation, not just another promise waiting to be broken.
As concerns wages and conditions, we have also secured amendments to the migration regulations to improve the market salary rate requirement for 457 visa workers. The market salary rate requirement is designed to ensure that temporary skilled migration does not undermine Australian wages and conditions. Labor's amendment to the regulation will strengthen this requirement by using enterprise agreements as the benchmark for assessing whether market salaries being paid. This will apply to all temporary skilled migrant workers under the standard 457 system, not just to workers coming in under chapter 10 of the ChAFTA. So this actually represents a significant improvement to the whole program—it will apply to all of the temporary guest workers under 457s coming to Australia. Labor has also secured agreement from the government to review the temporary skilled migration income threshold. This threshold is a safeguard designed to ensure that the temporary migration system is used for genuinely skilled jobs; not for entry-level positions, or relatively less skilled work. The review will consider the level of the threshold, and whether it should be indexed in line with wages growth, or possibly inflation, as another measure. Labor still remains concerned at how broadly the government has defined 'contractual service suppliers' in chapter 10 of ChAFTA given its agreement to remove labour market testing for these workers. However, we believe that, on balance, our stronger market salary rate requirement will help ensure that these provisions are not used to undermine Australian wages and conditions.
Labor has secured new visa conditions to ensure that 457 visa holders in trades occupations have the necessary skills and qualifications to perform their work safely and to the appropriate quality standards expected of Australian jurisdictions. Labor's new conditions for the 457 visa holders will require them to not perform the occupation unless: they hold the relevant licence; obtain the licence within 90 days of arriving in Australia; comply with any conditions to which the licence is subject; not engage in any work which is inconsistent with the licence; and notify the immigration department in writing if the licence is refused, revoked, seized or cancelled. These new safeguards for 457 visa holders in trades occupations will ensure that 457 visa workers in licenced trades such as but not limited to electricians and mechanics, obtain the necessary Australian licences and certifications. The safeguards will ensure that federal immigration authorities have extra information for monitoring and compliance of occupational licensing requirements. And also, they will improve coordination between the federal immigration department and the state and territory occupational skills and workplace safety regulators. Non-compliance with these visa conditions would be grounds for a 457 visa to be cancelled. Importantly, it would also provide grounds for imposing sanctions on unscrupulous employers who engage overseas trades workers on an unlicensed basis.
Our safeguards are complimentary to ChAFTA. They work with the agreement, not against it. The safeguards which Labor has proposed and been accepted do not breach ChAFTA and they do not require, importantly, a rewriting of ChAFTA. We have carefully designed our safeguards to support local jobs without requiring the text of the agreement to be renegotiated. This means that ChAFTA can enter into force at the earliest opportunity, allowing Australia's exporters to realise the benefits of the agreement while ensuring that local jobs are also supported. Our safeguards will not be applied retrospectively. They will not affect existing work agreements.
Most importantly, I want to emphasise that our new safeguards do not discriminate against China. Our safeguards on work agreements will apply to all work agreements regardless of the nationality of the companies or the employers involved and regardless of the nationality of the 457 visa worker. Likewise, our safeguards on the market salary rate requirement and on occupational licensing will apply to all 457 visa workers regardless of nationality. Labor has secured improvements across the board to the whole system.
We do recognise that if Labor had been in government that perhaps there are features which we would not have initially negotiated but we are not. We have made it very clear that the debate which Labor has engaged in is about protecting and securing Australian jobs. We do not stand here today and say that every issue in the workplace is fixed; it is not. We remain concerned about inaction in relation to the clear and widespread exploitation of workers in Australia who are on temporary visas. This not only hurts these workers and our international reputation but it also undermines employment conditions for Australian workers.
Simply put, visas should do the job for which they are intended. Working holiday visas allow young people from abroad to experience living in Australia. But when these visas are industrialised, it can be a lot of work and not much holiday. Student visas allow international students to support themselves while they gain a qualification from Australia's world-class education system. But when work rights overshadow study, they sell our education export industry short. And 457 visas are important for filling skills gaps in our labour market. But when labour market testing fails, skilled Australians miss out.
The grim case study provided by the exploitation of thousands of workers at 7-Eleven shows there is a bigger broader problem that needs to be examined and addressed. We need to think about what the appropriate consequences and sanctions should be for exploitation of guest workers and whether the power and resources of our regulators are adequate. We are also concerned that we need to develop policies—and Labor will do this—to support local jobs, eliminate the exploitation of visa holders and protect the wages and conditions of all workers in Australia, above all. We believe that if you work in Australia then you should work under Australian conditions of employment.
Over the coming months, our shadow immigration minister, the member for Corio, and our shadow minister for employment, the member for Gorton, will be reviewing all forms of temporary work visas and identifying ways in which a Labor government can make our system fairer and more effective. I should also note that when it comes to occupational licensing, whilst Labor have strengthened the system, we do not believe that the current system or the current changes captures all the issues with occupational licensing. Specifically there is a major question, unresolved, of enforcement. We believe, on balance, it is not enough to make us vote against the agreement but, more generally, regardless of the nationality of the tradesperson saying they have a particular occupational qualification, we are concerned and we do not want people coming to Australia saying they have qualification fraudulently when they in fact do not. We are concerned about scams, where people might have some qualification and then through a sort of Phoenix or dodgy arrangement say that they are being supervised by someone with the appropriate electrical qualification, for instance, when in fact they are not. And we are also concerned to make sure that if we set this requirement and strengthen it and if someone comes here and receives the appropriate qualification within Australia in 90 days that we have a line of sight to ensure that has actually happened. A system where we just purely rely upon there being a workplace incident or a breach and then the issue being reported back to the authorities, to us, is an insufficient safety net.
We recognise that the solution is not simple. We recognise that there are issues of state jurisdiction as well as federal jurisdiction. We recognise there are demarcations between the department of immigration and our industrial relations system. But we do not think that those barriers should be sufficient reason not to improve our enforcement mechanism. Labor continues to press the case for almost a reverse onus. In other words, once the person has received a qualification, their sponsor should report that affirmatively back to the department of immigration rather than rely upon the government at some point to find out if the promise was actually kept. But these are matters which we will keep pursuing and persisting with.
I have spoken about temporary visa workers more generally. There are perhaps over 800,000 people with temporary work rights in this country—800,000. Unemployment is unacceptably high in this country. So, along with making sure that our temporary guest-worker schemes, for all of the visas, are not being exploited, and that Australians are getting first access to work, and also making sure that our enforcement mechanisms around occupational licensing are soundly based, and not just on paper but in reality—and that would include allowing unions to be able to go and have access to ensure these matters are being pursued properly—what we also must recognise is: there is a more general concern in the community about the prevalence of insecure work, temporary work, and people being underemployed. Part of the lightning rod of the ChAFTA is a deeper concern in the community that so many Australians do not have enough work, that they are in insecure work and that, indeed, the safety net is not working in the manner in which it should vis-a-vis temporary guest workers.
So, when Labor supports ChAFTA, we do not say that all the issues are fixed, but we do recognise that there has been work done on this agreement. In government, we helped negotiate it. In opposition, I believe, we have helped secure community concern about job safeguards and protecting Australian jobs. So I believe, on balance, this is a good day. This is a day where Labor says that we are happy to work with the government. The government has moved, and we respect that. We are happy to work with the government in terms of improving this agreement, and we have been happy to do this.
In voting for this legislation today, we believe that we have kept our faith in the power of trade liberalisation. But we have done what Labor always does: we have stood up in defence of Australian jobs, Australian pay and conditions, and Australian skills and safety standards. There was a lot of unfair commentary from parts of the conservative media and elements of the government saying that for us to speak up on Australian jobs was somehow racist—that, somehow, to raise objections was sinister and that it was harking to some past. That is not true. It was not true; it is not true. And Labor will always stand up for Australian jobs. But we also recognise that there has been progress.
We believe that, on balance, whilst there are plenty of issues in our system that I have articulated we need to work through, we also believe that, on balance, the government has given us the guarantees that we sought and the safeguards which we have delivered. We are pleased to support this agreement.
This is a great day for Australia. This is a great day for Australian jobs. This is a great day for confidence, enthusiasm and imagination, because today what we have seen is the parliament work. We have seen the government and the opposition able to reach agreement on this historic trade deal. And this is a great credit to Andrew Robb, who brought this deal home, and also, I must say, to Senator Wong, the shadow trade minister, who negotiated these changes with Andrew Robb. It is really good for Australians, and Australian business in particular, to have the confidence that the parliament works and on a matter as important as this the two sides can come together.
The Leader of the Opposition—I give him credit too. I described the Leader of the Opposition on one occasion as just a cork bobbing along in the slipstream of the CFMEU. Well, I have to say: today the Leader of the Opposition has struck out from the slipstream and charted a course that is plainly in the national interest, because this is a deal that always had to be done. China is the world's single largest national market. It is absolutely critical for Australian jobs in the future. It is vital—our biggest export market. We sell it today—not almost entirely but very largely—the makings of steel: iron ore and coal. The Chinese economy is in a state of transition. It has been heavily dependent on investment, which has been driven, over many years, by government policy. Every Chinese government for years has recognised that it needs to move to a consumer driven economy—a consumption driven economy. And that is why they have taken steps to ensure that Chinese depositors—families putting their money in the banks—are getting a higher interest rate in real terms. Wages are improving. There is a general concerted effort to do that. And you see so much evidence of that and so many opportunities for Australia.
Our opportunities in the Chinese market are limited only by our imagination and enterprise. And can I say: we are an extraordinary nation. We have 23 million extraordinary Australians. And their imagination and their enterprise will ensure that we have access to and benefit from this market in a way that even the architects of this agreement—principally, the trade minister, Andrew Robb—would not imagine. This is going to be a very big step for Australia.
Let me say something about the way the Chinese market is transitioning. We, in our lifetimes—in the lifetimes of almost everyone in this House—have seen China go from barely registering in the global economy to being the world's single largest national economy. I see the honourable member for Fraser at the table opposite; some economists say the United States is still a bit ahead, but everyone agrees that China will overtake it in due course as the single largest national economy.
When Mao Zedong succeeded in taking over China in 1949, he stood on top of Tiananmen and he said: 'The Chinese people have stood up.' And so they have. So they did, against a lot of challenges.
What Deng Xiaoping did in 1979, however, was to realise that China, to be prosperous, had to not just stand up but reach out, and he evoked the memory of the 15th century admiral Zheng He, who toured all through South-East Asia and the Indian Ocean, and he said: 'When we were open to the world, we were strong; when we became closed to the world, we became weak.' And it was from that moment that China began its transition to become a more open economy—a more internationally engaged economy. And that has been momentous. It has been an extraordinary shift, of hundreds of millions of people being lifted out of poverty. We are able to benefit from that, now and in the future.
We have seen, obviously, our ability to sell China the makings of steel, in particular—iron ore and coal—and that has been critical as they have been building up their infrastructure from, in effect, a standing start. But, over time, of course, the steel intensity of any economy peaks. The United States, for example, makes less steel now than it did in the 1950s because so much of that built infrastructure is in fact completed. So an economy naturally shifts to be one that is more driven by consumption and more based on services. About 80 per cent of our GDP is driven by services. In China it is much smaller but growing rapidly. Only about 20 per cent of our exports are services.
As China moves to a more consumption-led economy, the opportunities for services—our services exports are principally now tourism and education—grow exponentially. There are hundreds of Australian architectural practices operating in China today. The recent success of Cox Rayner in winning the contract for the big national maritime museum is just one of many examples of how Australian ingenuity, Australian innovation and Australian enterprise can take advantage of this market. The opportunities for our farmers are enormous. Chinese families can afford and want to buy better quality food and better quality drinks—wine in particular. There are enormous opportunities for us, and this is now made possible by this agreement.
We have a great achievement here. I am pleased that we have been able to provide some assurances to the Labor Party. As the Leader of the Opposition himself said, in many cases we are simply providing assurance that existing policies would not be changed and they would be dealt with by regulation. It is good that we have been able to achieve that. This agreement, with the consensus that has now been reached, is vitally important for business confidence in this country. A lot of people underestimate the importance of confidence in an economy. We have to remember that, while interest rates are at their lowest in human history, we want to see more employment, more innovation, more enterprise and more investment. What drives that investment and what drives those business decisions is confidence—a belief that people have that the future is going to be better and that there will be more opportunities in the future.
This agreement flings open the door to the largest single national market in the world. It is an absolute foundation stone for our future prosperity. We recognise—and I am sure all honourable members recognise—that our prosperity depends on Australia being more competitive, more productive, more internationally engaged and more innovative. That is how we remain and become an even greater high-wage, generous social welfare economy. There is no alternative. That is why every element of the government's policy is designed to enable us to do that. Every element of our policy—every vector, every sinew—is focused on more jobs, better jobs and greater opportunities for Australian business, and this China-Australia Free Trade Agreement is an absolutely critical foundation stone for that.
This is a great day for Australians, it is a great day for Australian jobs and it is a great day for Australian business. It will provide the additional confidence and leadership that our economy needs to continue to prosper in this, the most exciting time to be an Australian.