A new subclass of 457 visa negotiated in parallel with the China-Australia free trade agreement (ChAFTA) has raised fears of Australian workers being locked out of Chinese-backed infrastructure projects.
The new 457 visas would make it easier for “Chinese owned companies registered in Australia” to import skills for their projects – as long as they commit to capital expenditure of at least $150 million.
The visas are covered by labour agreements called Investment Facilitation Arrangements (IFAs) and can be used on a diverse range of Chinese-backed infrastructure projects – including, but not limited to, telecommunications.
Although IFAs “operate within the framework” of existing 457 visas – ostensibly to ensure “Australian employment laws or wages and conditions [aren’t] undermined” – there are some important differences.
Unlike existing 457 visas where employers – at least in some part – are obliged to test the local labour market before they can import skilled workers, the IFAs do not require such proof, according to an analysis by University of Adelaide Senior Lecturer in Law, Joanna Howe.
“There is no requirement to prove that there is a skill shortage or that the project company has had recruitment difficulties in enticing Australian workers,” Howe said.
For that reason, Howe has little hesitation in branding ChAFTA a “game changer”.
“It allows Chinese companies registered in Australia to import Chinese workers for the duration of projects, so long as the capital expenditure exceeds $150 million,” she said.
“Whilst this does increase the level of economic activity in Australia, it does not translate to increased job opportunities for local workers as it is likely that through the IFA, these projects will be staffed by temporary migrant workers from China.”
ACTU President Ged Kearney accused the Abbott Government of being “deliberately vague on the details about labour mobility and labour market testing clauses” in the ChAFTA.
“Free trade agreements must support local jobs and industry and all indications are that the deal with China does not,” Kearney said.
The Australian Fair Trade and Investment Network (Aftinet) noted that IFAs did not cut both ways in the free trade agreement.
“There is no equivalent agreement for Australian workers to work on projects in China,” Aftinet said in an analysis of its own.
Aftinet also noted there was “no upper limit on numbers of temporary workers” that could come to Australia under an IFA.
Despite the mounting concerns over IFAs, legal experts urged caution on the issue.
“IFAs are to be approached on a case by case basis, depending on the nature of the specific project under consideration,” Piper Alderman partner Ted Williams told Information Age.
“The Department of Immigration and Border Protection is yet to release the guidelines under which provide greater detail as to how IFAs are expected to operate.”
Likewise, Williams cautioned against jumping to conclusions on the appearance of IFAs to decouple increased economic activity and domestic job growth.
“The impact of these measures on domestic labour market is yet to be understood,” he said.
The Department of Foreign Affairs and Trade (DFAT) has previously said that more details on the operation of IFAs would be published “in due course”.
Australia and China signed the ChAFTA in Canberra on June 17, publishing the text for the first time. It must now pass domestic processes in both countries before it can be put into practice.