After months of intense wrangling over the labour market
implications of the China-Australia Free Trade Agreement (ChAFTA),
the Turnbull Government and the Labor Opposition have reached a
deal which will ensure passage of the legislation1
implementing this vital free trade deal.
Labor's concerns about ChAFTA, reflecting those of the trade
union movement, centred on threats allegedly posed to Australian
jobs through easier use of 457 visas as a result of the removal of
labour market testing; and the proposed arrangements for Investment
Facilitation Agreements (IFAs).
In a previous In Brief, we explained that most if not all of
these concerns were unfounded, by analysing the proposed
arrangements in the ChAFTA treaty and supporting documents in
comparison with the current 457 visa scheme for temporary skilled
workers and other recent free trade agreements Australia has
However, to ensure that ChAFTA's progress through Parliament
is not impeded, the Government has agreed to a number of amendments
to address some of Labor's concerns. These changes will take
the form of amendments to the Migration Regulations 1994
LABOUR MARKET TESTING UNDER WORK AGREEMENTS AND IFAS
The Government has agreed to clarify that labour market testing
– ensuring that genuine efforts have been made to recruit
Australian workers before seeking to sponsor skilled workers on 457
visas – will apply to all work agreements linked to
ChAFTA.3 This includes IFAs, a proposed form of
agreement for major infrastructure development projects in
Australia with at least 50% Chinese investment and a minimum $150
million capital expenditure.
457 visa conditions for overseas tradespersons or specialised
occupations will include a requirement to obtain any licence,
registration or membership required under Australian law for the
relevant trade or occupation. For example, Chinese skilled workers
including nurses, engineers, plumbers, welders and carpenters will
be required to meet applicable federal, state or territory
licensing requirements within 90 days or their 457 visa will be
The Government will also require the Department of Immigration
and Border Protection to provide annual reporting of the number and
occupations/industries of 457 visas under ChAFTA work
TEMPORARY SKILLED MIGRATION INCOME THRESHOLD (TSMIT)
The TSMIT sets an income threshold below which employees may not
be engaged on 457 visas, currently $53,900 per annum. This
threshold used to be subject to annual indexation.
While Labor sought to increase the threshold to $57,000 pending
the resumption of annual indexation, the Government has agreed only
to a review of the current threshold; whether it should be indexed;
and if so, an appropriate methodology for doing so.
Interestingly, Labor is now under pressure from the union
movement over the deal it has reached with the Government, which
unions argue does not provide sufficient safeguards of Australian
However the compromise has been welcomed by the Business Council
of Australia, Australian Industry Group and other employer groups.
It will see ChAFTA implemented before the 31 December 2015 deadline
– importantly, without the need to seek any amendments of the
treaty itself, which would potentially have jeopardised this
important free trade agreement with Australia's major trading
1Customs Amendment (China-Australia Free
Trade Agreement Implementation) Bill 2015 and Customs Tariff
Amendment (China-Australia Free Trade Agreement Implementation)
Australian companies doing business abroad should recognise the risk to local assets that a foreign judgment may present.
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