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Stock & Land | 21 October 2015
Labor finally approves China-Australia free trade agreement
By James Massola
The China-Australia free trade agreement will come into force before the end of the year after a compromise deal was finally struck between the federal government and opposition.
Prime Minister Malcolm Turnbull has hailed the compromise over the "historic trade deal", declaring it "absolutely critical for Australian jobs in the future".
He said Australia’s opportunities in the Chinese market are "limited only by our imagination and enterprise".
"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," he said.
He also paid a back-handed compliment to Opposition Leader Bill Shorten, noting that he had been "a cork bobbing along in the slipstream of the CFMEU" but that ... "today the Leader of the Opposition has struck out from the slipstream and charted a course that is plainly in the national interest".
Mr Shorten conceded he may have angered sections of his power base in the union movement by reaching the agreement, but said a deal had been struck because "we’re satisfied there is a better deal for Australian jobs than before today".
"Labor’s always believed that trade should benefit all Australians, not just some people," he said.
"That’s why Labor has stood up and expressed our concerns that there was insufficient legal safeguards and protections for Australian jobs."
"Labor now has achieved what we believe to be satisfactory legal protections which weren’t previously proposed, which means that Labor can now support the speedy passage of the China-Australia free trade agreement."
Unions including the Electrical Trades union and the Manufacturing Workers union criticised the deal for not doing enough to strengthen labour market testing requirements, vowing to continue their campaign against aspects of the deal.
Last week Labor unveiled three specific amendments to the trade deal it would seek in order to agree to the deal and wave through enabling legislation. The bill will be brought forward for debate immediately in the lower house and is expected to pass into law by the end of the year.
Those changes would have seen a revision to rules that meant there would not have been mandatory labour market testing applied to investor facilitation agreements (IFAs) for projects over $150 million, lifting the base pay threshold for 457 visa workers from $53,000 to about $57,000 and stricter licensing conditions for tradesmen and women looking to come to Australia.
Minister Robb and his Labor shadow, Penny Wong, negotiated the compromise and a special meeting of shadow cabinet approved the deal on Tuesday night, with caucus giving the deal the rubber stamp on Wednesday morning.
Labor believes all three of its concerns have now been addressed and the changes will be put in place by making changes to migration regulations but not, as originally proposed, through changes to the act.
The changes still have the force of law.
Under the deal, labour market testing will apply to people who enter Australia on work agreements, including workers brought in on 457 visas under the China-Australia deal as part of an IFA.
Secondly, 457 visa market salary requirements will be strengthened to reflect wage rates paid under enterprise agreements, a move that means 457 visa workers will be more expensive to hire as pay rates on enterprise agreements are typically higher than the minimum award rate.
And thirdly, there will be new visa conditions for people on 457 visas in licensed trade occupations such as electricians and plumbers.
Satisfied with compromise
Mr Robb said the federal government had been happy to provide assurances to Labor that labour market testing requirements could not simply be changed by government fiat in the future.
During informal conversations with Chinese officials, Mr Robb said, "they were satisfied that it in no way halted what we’d agreed and it didn’t discriminate against them".
"We should now be on track to be able to have an exchange of letters with the Chinese before the end of the year."
If passed by the Senate in 2015, two tariff cuts are in prospect before the end of the year and then immediately after on January 1.
Senator Wong described the deal as a "comprehensive package of safeguards for Australian jobs".
"What we’ve got is policy being turned into legal obligation. So I think that is a substantial strengthening of the safeguards."
The new conditions will require that 457 workers in those occupations cannot work until they get a trades licence, and they will have to get that licence within 90 days of arriving in Australia and report to the Immigration Department if their licence application is refused.
Former prime minister Tony Abbott accused the ALP of running a racist campaign, in concert with the union movement, against the trade deal, but the Turnbull government has taken a more conciliatory approach.
ETU national secretary Allen Hicks condemned both sides of politics for reaching the deal and said "We have no faith that the Department of Immigration as it is currently resourced has the capability to enforce the licensing requirements for 457 workers".
"We will be seeking a public commitment from Bill Shorten and his shadow cabinet that the inadequacies of this deal will be addressed as a matter of urgency under any Labor government."
And AMWU national secretary Paul Bastian struck a more conciliatory note, stating the strengthened safeguards were "a step in the right direction to protect foreign workers from exploitation and ensure local workers are not shut out of local projects".
"The government and Labor should not think that this political settlement is enough. Our campaign will continue until Australian workers can be confident that [the China free trade deal] and trade agreements generally deliver for their interests."