By Leith van Onselen

The China-Australia Free Trade Agreement (ChAFTA) has moved one step closer to being ratified after the Labor caucus today approved amendments to the Migration Act that would safeguard some jobs by requiring mandatory labour market testing before Chinese workers could be brought in to work on Chinese-owned projects. From The AFR:

Shadow trade minister Penny Wong, who must now begin formal negotiations with Trade Minister Andrew Robb, prevailed in securing caucus support Tuesday morning to make non-discriminatory changes to the Migration Act that would require local labour market testing before low-skilled Chinese workers could be brought in on projects worth $150 million or more… The changes to the Migration Act would be non-discriminatory in that they would make no specific mention of China or the China-Australia Free Trade Agreement. The safeguards would, in effect, apply generally to all trade agreements so as not to offend China. They would require no change to the agreement itself.

No doubt these are positive amendments that will hopefully be accepted by the Government.

As I keep arguing, it makes no sense to further deregulate the labour market given that skills shortages have all but vanished, unemployment is already high, and jobs are destined to disappear as mining investment slumps, the car industry closes, and housing construction rolls over. It is also retrograde to effectively cede control of Australia’s borders just so that we can sell some extra farm goods into China.

The more important issue, in my view, is whether the proposed changes to the Migration Act will also address Australia’s existing 457 visa system, which has become a farce?

As noted previously, more than 80% of primary 457 visas issued in Australia (Skill Levels 1 and 2) are exempted entirely from market testing. Thus, an employer can hire an overseas worker without advertising the job locally. Only Skill Level 3 occupations require labour market testing (see below table).

Add in the army of foreign student workers in Australia, as highlighted by the 7-Eleven scandal, and it is fair to say that Australia’s labour market has a very soft underbelly that needs addressing.

The sad truth is that the 457 visa program has been a farce for the past eight years, including under Labor’s “watch”. Exemptions from labour market testing have grown from around 20% initially to the outrageous level of more than 80% now.

Exemptions were originally to be granted for clearly defined skills shortages as identified by the then DEEWR (now Department of Employment), such as for doctors in rural areas and for short term skill-specific undertakings (e.g: Asian chef’s for expo’s, etc). Instead we now have Australia’s pubs importing kitchen hands on 457’s in significant numbers with government approval.

Virtually all of these jobs could be filled locally with little bit of training.

As with many government schemes, the migration program has mutated from being well meaning into a rort, backed by vested interests.

As such, the whole system needs addressing, rather than focusing solely on the ChAFTA.

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