China Free Trade Agreement: Labor wants raise in minimum pay for overseas

Australia will propose additional measures to assuage concerns that the free-trade accord with China goes too far in opening up the labor market. The former prime minister, Tony Abbott, had ruled out such talks on the basis that “there is nothing to negotiate”.

The China free-trade agreement is part of a series of trade deals that has been concluded by the Liberal-National government since it came to office in 2013.

The Labor caucus agreed to the China compromise on Tuesday following consultations led by trade spokeswoman Penny Wong.

The suggested change, which if passed will apply to all future business deals Australia agrees on with global traders, will test the effectiveness of local workers on major projects commissioned on Australian soil by worldwide companies worth $110 million or more.

But Wong said there were limits to what could be done about the chapter because it was in the text of the agreement.

Labor’s new approach, which the government has characterised as unnecessary but probably harmless as it is consistent with elements already specified, would lift minimum wages of foreign workers from the current fixed $53,500 annualised minimum salary to $57,000 (indexed), strengthen trade certification requirements of imported tradespeople by making their qualifications a pre-requisite of their visas, and strengthen labour market testing before foreign workers could be hired for major investment projects over $150 million. The government says the Chinese will walk away from the deal if the actual substance is changed.

Wong said while the party may have concerns about aspects of Chafta, “we recognise as a responsible opposition that we have to work within the framework of the existing agreement”.

Opposition trade spokesman Penny Wong prevailed in securing caucus support on Tuesday morning to make three non-discriminatory changes to the Migration Act that would not affect the terms of the agreement nor specifically mention China.

“We thank you for that”, Mr Robb told Parliament. The amendments would introduce new safeguards into the 457 visa system.

“Labor’s safeguards are complementary to ChAFTA: they will not breach the agreement, they will not require it to be renegotiated and they will not discriminate against Chinese workers or companies – in fact they will improve protections for Chinese and other 457 visa workers in Australia”. Employers entering investment facilitation arrangement work agreements would be required to advertise jobs locally before turning to overseas workers.