Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

The Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 and the Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 implement the commitments on tariff reductions which the Australian government has made under the China-Australia Free Trade Agreement. China is Australia's No. 1 trading partner and accounts for a third of our merchandise exports. Trade with China helped Australia to keep growing through the global financial crisis. Trade with China is critical to our economic future. China is the world's second largest economy and is set to become the world's biggest economy during our lifetimes—the world's largest economy right here in our region. It represents a major new market with hundreds of millions of increasingly affluent consumers demanding new goods and services.

China will also continue to be a source of valuable investment funds, which Australia needs to create and grow new businesses and new jobs. Our proximity to China represents a tremendous opportunity for Australia, an opportunity for the jobs, growth and prosperity of future generations of Australians. Asia's middle class is now around 500 million and is expected to increase more than sixfold in the next fifteen years to 3.2 billion middle class consumers in Asia by 2030, which would be 66 per cent of the world's middle class—and a large slice of these consumers will be in China. As we articulated in government, particularly in the Australia in the Asian century white paper, these numbers will translate into rising demand from the region, particularly from China, for a range of products and services, including many things that Australia does well: food, education, tourism, health, aged care, and financial and professional services.

Growing, deepening and diversifying the trade relationship with China has the capacity to deliver jobs and prosperity to future generations of Australians. We need to export more Australian agricultural goods and food products to China. We need to export more sophisticated services to China, like education, health care, aged care and financial services, business and professional services and tourism. We need to see advanced Australian manufacturing playing its part in the global and regional supply chains, which are increasingly centred on China, and of course we need to see more investment flows between Australia and China. All this means new opportunities for Australian businesses, stronger growth for Australia's economy, better living standards for Australian families and more and better jobs for Australian workers. We are already in a strong and mutually beneficial economic relationship with China, which has been nurtured by successive governments of both persuasions, and a high-quality free trade agreement with China will improve and deepen that relationship.

Labor recognises that the China-Australia Free Trade Agreement, also known as the ChAFTA, will deliver significant benefits to Australian exporters, Australian consumers and Australian jobs. This agreement has been nearly 10 years in the making, and both coalition and Labor governments have played their part in negotiations. I pay tribute to former Labor trade ministers Simon Crean, Craig Emerson and Richard Marles for their roles in progressing the negotiations. I also acknowledge the role of Andrew Robb in bringing the negotiations to a conclusion. I also recognise the work of the diligent officials from the Department of Foreign Affairs and Trade, and those from other departments, who worked tirelessly on the negotiations which have resulted in this agreement. In this regard, I make particular mention of Jan Adams.

Labor believes that the government could and should have secured a better deal, and I will have something to say about what we see as the shortcomings of the deal in a moment. In particular, it should be recognised that in this legislation this government has allowed access to the Australian labour market to a far greater extent and at far lower skill levels or different skill levels than in any previous trade agreement—and, as yet, the government has not articulated an economic rationale as to the merit of that. But let's start first with the opportunities for Australia which are contained in this agreement, notwithstanding the shortcomings.

ChAFTA will give Australian businesses greater access to the Chinese market. Some 85 per cent of Australian exports by value will enter China with no tariffs immediately, rising to 95 per cent when the agreement is fully implemented. ChAFTA will also improve market access for services like banks, insurers and fund managers, education providers, professional services firms and health and aged-care facilities. As we know, China's economy in the coming years will rebalance away from manufacturing and towards more sophisticated services, and ChAFTA's services provisions will give Australian services businesses opportunities to take advantage of this rebalancing.

So ChAFTA will deliver considerable economic benefit for Australia. But, as I said, from the opposition's point of view, the agreement negotiated by the Abbott government had shortcomings. Obviously, there were some agricultural goods which were not included or did not benefit from the deal. The deal does not contain further market access for rice, wheat, cotton, sugar, canola or vegetable oils.

But our first concern about the agreement is the investor-state dispute settlement provision. The government should not have included an ISDS provision in this agreement. There are legitimate public concerns over the impact of ISDS provisions on Australia's public policies in areas such as health care, public services and environmental protection. These concerns come from mainstream economic and legal experts. Even the former Liberal Prime Minister, John Howard, refused to include an ISDS provision in the Australia-United States Free Trade Agreement despite pressure to do so from the US. Labor's position against ISDS provisions has been clear and, in fact, preceded much of the public disquiet about them here in this nation. In government we adopted the policy of not including these provisions in trade agreements, and in opposition we continue to oppose those provisions in trade deals.

We do not believe the government should have included an ISDS provision in the ChAFTA. If returned to government, Labor will seek to review all of our existing ISDS provisions in trade and investment agreements with our trading partners and we will work with the international community to reform ISDS tribunals so they remove perceived conflicts of interest by temporary appointed judges, so they adhere to precedence and so they include appeal mechanisms.

As I have previously said, Labor has also raised concerns about the impact of the China free trade agreement on safeguards in Australia's temporary migration system. We want to ensure that the China free trade agreement supports rather than reduces the number of jobs for Australians. That is why we have been determined to address concerns about the impact of the ChAFTA on jobs, wages and skills. It is why Labor has negotiated with the government and has achieved a comprehensive package of safeguards around ChAFTA's temporary migration provisions. Our safeguards will support local job opportunities, maintain workplace skills and safety standards and deter the exploitation of overseas workers. They will ensure that temporary migrants coming to Australia are employed in jobs where there are skills shortages, not as a way of bypassing local workers.

I think there is a very simple principle here. Australians do accept the need for a temporary migration system where there are skills shortages and where there are labour supply shortages. Australians do not accept a temporary migration system which is used to bypass Australian workers and to provide opportunities to overseas workers which are not made available to Australians.

We have designed our safeguards according to two key principles—firstly, that they are consistent with the ChAFTA and do not require the changing of the agreement and, secondly, that they do not discriminate against China. They do not discriminate against Chinese companies, nor against Chinese workers seeking to come to Australia under our temporary skilled migration system. It is true that there has been a lot of concern raised about this aspect of the agreement and it is regrettable that the government has never sought to come into this chamber or go to the public and articulate a clear economic rationale as to why it agreed to the labour migration provisions that it did in the ChAFTA.

Labor has done what minor parties in this place could never do: we have negotiated and achieved real outcomes and real safeguards so that this agreement can come into effect, unlocking economic benefits for Australia whilst ensuring local jobs are supported. I seek leave to table a letter from the Minister for Trade and Investment to me, dated 20 October 2015. I understand it has been circulated to the whips.

Leave granted.

I table the letter in which the minister writes to confirm our agreement regarding labour market testing, project agreement and labour agreement guidelines, the temporary skilled migration income threshold and market rates of pay, and changes in relation to skills, visa condition 8107 and transparency.

I want to explain how Labor's job safeguards will work. The ChAFTA allows temporary skilled migration from China through a new mechanism known as an investment facilitation arrangement. This will allow Chinese workers to be engaged on Chinese funded infrastructure projects worth more than $150 million. The government intends to implement the ChAFTA IFAs through migration work agreements. These are agreements between employers and the Minister for Immigration and Border Protection which allow employers to bring in workers on 457 visas.

Labor's safeguards will require employers entering work agreements with the Minister for Immigration and Border Protection to conduct labour market testing before turning to overseas workers. Labour market testing requires employers to show that local workers are not available before they turn to 457 workers by providing evidence showing that they have advertised the jobs locally. The government has agreed to entrench labour market testing for work agreements in the Migration Regulations. That means it will be a legally binding safeguard, not just another coalition promise able to be broken.

In addition to labour market testing, the opposition has secured agreement from the government to implement a series of additional safeguards for migration work agreements. These include a requirement for employers to first demonstrate there is a labour market need to use 457 visa workers, to adopt training plans showing how they will train local workers to address skills shortages, and to adopt overseas worker support plans showing how they will support 457 visa holders, including by providing information about workplace entitlements and rights. These requirements will be included in immigration department guidelines for work agreements, which in turn will be underpinned by a new migration regulation.

The requirements also allow the minister for immigration to impose additional conditions on work agreements, such as specifying that a minimum number of Australian workers be employed or placing a ceiling on the number of overseas workers that may be employed. In relation to wages and conditions, we have secured a major improvement in the market salary rate requirement for 457 visa workers. The market salary rate requirement is a key safeguard designed to ensure that 457 visa workers are treated fairly and that temporary skilled migration does not undercut Australian wages and conditions. It requires such workers to be employed on market salary rates, wages and conditions that are no less than those for a local worker performing the same job in the same location. Under our agreement with the government, the migration regulations will be amended so that the wage rates under relevant enterprise agreements will be the benchmark when assessing whether 457 visa workers are being paid market salaries. This is a significant strengthening of the market salary rate requirement, and it responds to legitimate concerns that the existing arrangements do not reflect market wage rates under enterprise agreements. I want to emphasise this will apply to all 457 visa workers under the standard business sponsor stream. For 457 visa workers under the work agreement stream, the government has agreed to include a comparable requirement in departmental guidelines.

Another area of significant community concern with the ChAFTA is in its removal of mandatory skills assessments for Chinese workers. The coalition government has agreed to remove mandatory skills assessments as part of the 457 application process for Chinese workers in 10 trades occupations, including electricians, mechanics, carpenters and joiners. Chinese 457 workers will still be required to obtain the relevant occupational licences from state and territory regulators. But the removal of the mandatory skills assessments from the immigration process has raised legitimate concerns about workplace skills and safety standards. The Electrical Trades Union is concerned that state and territory occupational licensing requirements may not be adequately enforced. These are not only concerns which emanate from the ETU. The National Electrical and Communications Association, which represents electrical contractors, has said it was not consulted by the government before it made this significant change. The Master Builders Association has said that the removal of mandatory skills assessments means the immigration department will need to take alternative steps to ensure all applicants possess the requisite skills and experience. And the BCA, the Business Council, has said there will need to be greater coordination with state and territory regulators to ensure visa holders exempted from automatic skills testing meet all licensing requirements for work before working in Australia.

So Labor has secured agreement from the government to add new visa conditions for 457 workers in occupations where holding a licence is mandatory under state and territory workplace skills and safety laws. The new conditions will require 457 visa holders in these occupations, first, to not perform the occupation without holding the relevant licence; second, to obtain the licence within 90 days of arriving in Australia; third, to comply with any conditions imposed on the licence; fourth, to not engage in any work or duty that is inconsistent with the licence; and, fifth, to notify the department in writing if their application for a licence is refused or if they are granted a licence but it is subsequently revoked or cancelled.

This is a significant strengthening of the existing visa conditions in licensed trade occupations. Those existing visa conditions for such 457 workers do not put a deadline on the requirement to hold a licence, do not explicitly require visa holders not to perform any work until they obtain a licence, and do not require them to notify the immigration department if a licence is refused, revoked or cancelled. I want to emphasise that these new visa conditions which Labor has secured will apply to all 457 workers in licensed trades occupations, not just 457 workers entering under ChAFTA's labour movement provisions. It is an overall strengthening of the temporary migration system in respect of licensed trade occupations across the board, and these are much stricter requirements.

Breach of these requirements would expose visa holders and employers to significant sanctions. A 457 worker breaching these conditions would be liable to have their visa and their right to stay in Australia cancelled. An employer of a 457 worker breaching these conditions would face sanctions, including having their approval to sponsor 457 visa workers cancelled. These requirements for 457 visa holders in trade occupations will mean immigration authorities will be better able to monitor and enforce compliance with workplace skills and safety standards. They will more effectively link the migration system and visa conditions with the state and territory trades licensing systems.

Given that unemployment under this government is increasing, it is important to ensure that trade agreements support rather than displace local employment. As I have said previously, a fundamental premise of Australia's temporary skilled migration is that it is for filling skill shortages where local workers cannot be found to fill positions. Labor's safeguards will ensure this objective is upheld. These safeguards will ensure that employers have to make genuine efforts to recruit local workers and train local workers to address skill shortages, do not use migrant workers to undercut local wages and conditions, and do not rort the system. These safeguards are also complementary to the ChAFTA and will not require renegotiation of the free trade agreement. This means the agreement can enter into force at the earliest opportunity, allowing our exporters to realise the benefits of the agreement whilst ensuring local jobs are supported.

In short, the opposition has determined to support the ChAFTA and Australia's economic engagement with China while delivering safeguards that support local jobs, maintain workplace skills and safety standards, and deter exploitation of overseas workers. This position demonstrates our commitment to an open, outward-looking, competitive Australian economy, expanding and deepening Australia's economic relationship with China, creating the opportunities for the future and, importantly, ensuring to the maximum extent possible that the benefits of trade flow to the community in the form of more jobs, higher growth and better living standards.