Don't believe Chinese worker Free Trade Agreement scaremongering
James Laurenceson, Deputy Director, Australia-China Relations Institute, University of Technology Sydney |
This article originally appeared in the Australian Financial Review, June 9 2016.
Remember those claims from some trade unions last year that the China-Australia Free Trade Agreement (ChAFTA) would allow Chinese companies to bring in their own workers?
They have been given new life by a recent Sydney Morning Herald/The Age investigation that purported to show how ChAFTA, which has been in force since just before Christmas, has indeed opened the door to Chinese workers, and unqualified ones at that. The deal's critics are now declaring vindication.
But if the critics had really got it right, this should be seen in the data. Yet according to the Department of Immigration and Border Protection (DIBP), the inflow of Chinese workers has slowed to a trickle.
In the first quarter of this year just 545 primary visa applicants from China were granted entry to Australia under the subclass 457 visa scheme. This is the main avenue through which companies access temporary skilled workers from overseas.
That compares with 9927 primary applicants from other countries. That is, China only accounts for 5 per cent of the total. More than three times as many workers from the UK were given visas.
And get this: the number of Chinese workers granted entry this year is a massive 32 per cent drop on the same period last year when ChAFTA didn't exist. In contrast, the number of workers from other countries has only fallen by 16 per cent.
For ChAFTA's critics, these facts appear irrelevant.
Another complaint was that the removal of labour market testing (LMT) under ChAFTA would lead to Australian workers being passed over.
Plainly, with only 545 applicants from China given visas this fearmongering has proven exaggerated. Yet exaggeration is actually an understatement.
Even before ChAFTA, LMT wasn't applied to overseas workers in "Skill Level One" and "Skill Level Two" occupations, mostly managers and professionals. The only change that ChAFTA brought was to extend this to "Skill Level Three" occupations, mostly the trades.
It turns out that 82 per cent of the Chinese workers given visas this year are in the first two skill categories. In other words, LMT has been removed for a grand total of 98 workers, or less than 1 per cent of the 457 visa scheme.
There was also the criticism that ChAFTA would erode workplace safety standards because it included a side letter that promised to abolish mandatory skills testing for Chinese workers in 10 occupations, including electricians. In reality, this simply put China on par with how we treat workers from 150 other countries. Nonetheless, it still led to suggestions that Australians might soon find unqualified Chinese electricians working in our roofs.
Good luck finding one: fewer than five Chinese workers in these occupations have been granted 457 visas since ChAFTA came into force. And even for these, ChAFTA never removed the requirement that they must show state and federal licensing and registration bodies that they have the skills to do the job.
As for the recent SMH/Age investigation, claims that it provides evidence of ChAFTA allowing unqualified Chinese workers into the country fall short.
The seven Chinese workers involved entered Australia on subclass 400 visas, which existed long before ChAFTA. This visa only allows entry for very specific purposes and non-ongoing work. And so it was in this case. An Australian company had bought a car park stacking machine from a Chinese company, and some of the Chinese company's workers were granted temporary entry to assist with its installation.
What was revealed was that a different Australian company had seemingly issued dodgy work site safety certificates and there had been a lack of adherence to other existing laws and regulations. A skirting of the rules needed to be guarded against before ChAFTA and the same is true today.
So much for ChAFTA's downside, what about the deal's benefits?
Last week's national accounts showed that Australia's economy had expanded by an impressive 1.1 per cent in the first quarter. But take away exports and it would have been just 0.1 per cent. It doesn't get much closer to recession territory than that. No country made a bigger contribution to saving Australia from that fate than China.
Don't believe the hype: it's politicians such as Andrew Robb and Penny Wong who supported ChAFTA's passage that have been vindicated.
Author
Professor James Laurenceson is Deputy Director of the Australia-China Relations Institute (ACRI) at the University of Technology Sydney.
