The Immigration Minister might not sit on the National Security Committee of Cabinet. Does this mean anything?
Forget about political payback because Dutton supported Abbott. This is a whacky theory concocted by those drunk on leadership talk. Instead give the Prime Minister the luxury assumption he is behaving because he has Australia’s best interests at heart.
Bill Shorten did not think much of this move:
I would have thought that if you’re fair dinkum about national security then you would have your representative in border security sitting regularly, permanently, on the national security committee of cabinet,” the Opposition Leader said.
I assume Peter Dutton doesn’t think much of it either.
But there are two other considerations. The first is purely practical. Is this the best use of the Minister’s time? This is the line the Prime Minister pursued on RN Drive last night defending his decision. Peter Dutton will be there when it is relevant to border protection.
But a different tack is whether Immigration should be represented on the National Security Committee?
I believe an Immigration Minister prioritising national security sends the wrong signal to the Minister and the bureaucracy. Any benefits are outweighed by playing into nationalistic stereotypes aroused by the combination of migration, security and borders. This creates terrible incentives for people who make decisions each day about what to prioritise in migration and border policy. Economic, social and cultural considerations are each pushed away from resources when security is raised.
Over Australian history, the negatives of migration pale in comparison to the benefits. Yet the explicit focus on security, fear and risk pose an existential threat to how we think about migration in the future. If Malcolm Turnbull has managed even a small step away from the current trend of embedding migration and security ever closer together, I for one am glad. There are many more steps but Australians who believe in a robust, generous multicultural Australia should applaud this decision.
Muddled thinking on migration is the norm. Nowhere is this more prevalent than in progressive circles.
In an article about why Malcolm Turnbull is not a progressive, Van Badham writes:
In his speech announcing his leadership challenge Turnbull affirmed he’d been provoked to action not to go against Abbott’s economic policies – but to give them better “advocacy”. Crucially, he declared support for the China free trade agreement (Chafta) that will allow non-union labour to be shipped into Australia from China on projects worth more than $150m.
I agree Malcolm Turnbull is not a progressive. But the manner in which the China-Australia Free Trade Agreement has been framed is an afront to considered thought on migration.
“Non-union labour to be shipped into Australia from China” is one way to think about the China-Australia FTA. I assume Van Badham is inferring Chinese people will work for lower wages than Australians, dragging down existing wages and conditions. This argument rests on an assumption of power imbalance between the worker and the employer, with little outside accountability. This type of thinking has strong foundations built upon Australia’s border and sovereignty, where those outside should be restricted to benefit those inside. This is fair enough as we live in a world of nation-states and very different economic norms. We also know it is difficult to maintain the status quo for rights and conditions under large influxes of new people.
However as a progressive, you could also think about it in a slightly different way. According to the World Bank, China has a GDP per capita of USD$7,593 for 2010-2014. Australia has a GDP per capita of USD$61,887 for the same period. The average Australian is about 8 times richer than the average Chinese person.
Working in Australia instead of China would see a massive windfall to the migrant. A Chinese person would go from being around the middle of the global income to amongst the very top. In fact, this is likely the largest and most effective method to get people out of poverty, albeit one with a range of other consequences. Importantly, this occurs via the individual and not the nation-state or government as per traditional aid and economic development.
These differences should matter more in a world where the number one priority for progressive thinking is inequality. You can think about inequality ‘within countries’ or ‘between countries’. Within country inequality dominates the debate as it relates to how individual countries like Australia tackle the gap between rich and poor through domestic approaches. Australian standards, such as high minimum wages and the right to join a union, are seen through this prism.
Yet considered progressives should care also about ‘between country’ inequality. Between country inequality is the main culprit behind increasing global inequality:
(Source: Dani Rodrik, who sourced from Bourguignon and Morrison (2002) updated using data from Milanovic (2013))
There are two ways to address the massive increases in between country inequality. The traditional method has been to try and create more prosperity inside poorer countries. However the oft-ignored second is by letting poorer people themselves move to richer countries. In Australia, we actively dissuade this option as we have a system of immigration based on skills. This has many proxies that stops poorer people from moving to Australia, such as wealth and education opportunities.
I don’t believe in open borders. In the source above, Dani Rodrik makes an excellent contribution on the central role in institutions in creating wealth. But if we are to have a serious discussion in Australia about inequality, we cannot be wedded exclusively to a nationalistic approach given most inequality is global. There is space in the discussion on inequality for more focus on these ideas, instead of simply looking within our own society.
Immigration can play a powerful role in helping to address this without undoing our social fabric. It’s not good enough to simply shout about human rights and demand higher standards as the only solution to building prosperous developing countries. Why does Australia have uncapped Working Holiday treaties with rich countries but cap those from poor countries? Why does Australia not have a visa lotto open to people in poor countries, a la the United States and New Zealand? Why does Australia’s Pacific worker program fail when compared to the New Zealand program?
Encouraging people in poor countries to move to Australia for work would be an excellent complement to a more generous aid and development outlook, as well as an important step in our contribution to tackling global inequality. Framing more migration from China as ‘non-union labour to be shipped’ does not help this cause as it implicitly excludes the opportunity to think about how more people from a middle income country like China could move to Australia. The China-Australia FTA isn’t perfect. It might not even be a good agreement. However it also isn’t an affront to progressive values or labour standards in this country.
A fundamental mistake was made in the aftermath of the Australian Border Force fiasco in Melbourne two weeks ago. In the days following, attention focused on the Minister and whether a media release had been approved. Since then, many people see the entire episode as a reflection on the government. A government so evil they wanted to profile migrants.
The actions on day had nothing to do with daily politics. This excuse was born of cynicism and partisanship and should be dismissed. The truth is more worrisome.
The type of operation to occur has a long history. They are not new and they are not scary. I take the Commissioner of the ABF at his word as compliance activities are part and parcel of any immigration framework. Immigration officials will hang around in the background and do what they are told by police officers. This is the correct hierarchy as far as I’m concerned.
Of course, the media release flagging the event sounded very different to what actually would have occurred. I thought racial profiling was a proud new addition to standard duties. I was heartened when this was rejected. But it dawned on me later the episode – the process itself – was another signpost along a very uncertain road.
Most people would not have heard about the Australian Border Force until that day. At the time, this new institution was less than two months old, being the combination of parts of the Customs and Immigration bureaucracy. Being new, the cultural environment of the organisation is still taking shape. Those at the top have flagged the desired direction with important speeches (which I have written about here and here). Those who fundamentally disagree have been leaving in droves.
The fact the media release itself was able to clear the internal bureaucracy is the story. This exposes deep gaps within the institution. Critical oversight and administrative controls are missing. When I was at the Department of Immigration and Citizenship, you couldn’t sneeze in public without it being cleared by Sandi Logan who headed up the National Communication Branch. This approach had pros and cons. For example our innovative new migration blog was turned into corporate mush after the comms people got their hands on it but on the whole, it was a functional approach. In a brand new institution, rebadged as a national security enforcement agency, you would have thought these considerations would have been a higher priority.
And this is where we should be worried. If something like this has not attracted the proper attention, what else has been left to junior and mid-level officials, with little experience who are being primed for a focus on national security? From the ABF website:
We have significant service and enforcement functions, including:
- facilitating the lawful passage of people and goods
- investigations, compliance and enforcement in relation to illicit goods and immigration malpractice; and
- onshore detention, removals and support to regional processing arrangements
Significant service and enforcement functions deserve more attention and institutional support. Yet in announcing an internal inquiry into the events leading to the chaos, the Commissioner offloaded at least some of the blame onto the media. This was hardly mentioned in the media (thanks Crikey) and neatly captures how culture can be shaped even when responding to fuckups.
One serious political concern is Ministerial oversight. Scott Morrison is perceived very differently depending on your political background. However no-one should doubt his intelligence or capacity to achieve a desired outcome. He was a Minister who drove the creation of the ABF and had strong direction. Peter Dutton is a former law enforcement official himself however he does not appear to be particularly well-suited to administrative duties associated with massive bureaucratic transformation. This is not politics per se but how government functions in a space where the lines of policy and operations are blurred at best.
Unlike the events in Melbourne, these transformational changes are happening away from the front page. In the long-term, this fiasco might be one of the best things to ever happen as it has focused attention on the ABF. For example, for the first time outside obscure migration blogs, I saw someone critically evaluate the following new definition of the border:
We consider the border not to be a purely physical barrier separating nation states, but a complex continuum stretching offshore and onshore, including the overseas, maritime, physical border and domestic dimensions of the border.
To me, this is an attempt to stretch the power of the institution into many non-customs, non-immigration domains.The ABF want a seat at the big boys table. The statement is also rather crude and ill-considered as they have defined the border as all of Australia.
The idea of the ABF was rejected by the Gillard government. In the wake of ‘stop the boats’, we’ve ended up with an enforcement agency running immigration without anyone noticing. You can blame the government if you want for the events in Melbourne but this would be a mistake. A brand new institution has emerged without some fundamental ground rules in place. Hopefully this will be addressed in the short-term as migration and perceptions about migration are too important to be sacrificed to national security.
I disagree with the emerging consensus that public opinion on refugee and asylum policy is shifting. I see it as hardening existing positions.
For example, on the government’s decision to accept 12,000 Syrian refugees, Lenore Taylor writes:
There’s a lesson here. When voters speak loudly enough, politicians listen. The Abbott government has come a long way since Sunday, when the prime minister suggested any additional intake of Syrian refugees would have to come from within the existing humanitarian intake.
The lesson isn’t when voters speak loudly enough, politicians listen. “Voters” spoke as loud when Reza Berati died. The public spoke loudly on marriage equality and a Private Member’s Bill languishes.
Refugee and asylum policy remains entrenched in the status quo: ‘orderly’ offshore resettlement is accepted while irregular migration – boat people – rejected. Over 15 years of public debate and the public has a clear ability to see the difference. Best practice research on migration and public opinion show these trends are the norm.** Nothing that has happened this week changes this. Ignore shitty polling as a reaction to immediate events as it is a poor indicator for policy sustainability.
It is false to say nothing has happened. The Syrian exodus has created space for policy choice and magnitude. German leadership kick started a rapid reaction from other rich countries who could not hide from what had been occurring for months. But why can Syrians sit in detention centres in PNG and Nauru while planning begins to accept 12,000 additional people? Why can both the government and ALP confidently state they will continue to turn boats back even with Syrians onboard? Reporting on these matters is almost an afterthought. In the populist tabloids, it does not exist.
This is not to cast judgment on these policy options but to explain that this type of post-hoc ergo justification is wrong. Given modern migration advocacy has a long record of failure, I would recommend those seeking permanent change in asylum policy to disregard the “change has come” narrative and start to think differently. Poor attribution to policy cause and effect can have massive opportunity costs.
To me, the lesson is something Lenore Taylor identifies later on in her piece. Transparency is central. Awareness and information change attitudes. Secrecy is a blight on the ability to change policy outcomes. This is the reason detention centres are offshore or in the outback. This is the reason media are kept out of camps. Images and stories that allow the communication of human nature are deliberately locked away.
Some people might say now is not the time to debate or nit pick these points as we can collectively be proud of the decision to accept 12,000 more migrants. I disagree wholeheartedly. Now is exactly the time to debate these points if there is to be continued progress. 12,000 more migrants is a positive step in the right direction. Yet it should be viewed as a first step of a journey, not a policy victory.
** As reminded to me by Ben Wilkie on Twitter, leading to this blog post.
The AFR published an op-ed of mine on the China-Australia FTA. Republished here:
“China FTA disputes are about migration and labour, not trade”
Political debate on the China-Australia Free Trade Agreement is not centred on trade but on labour and migration. For Australia, this is the first instance in what will become a staple of how regional and bilateral economic negotiations occur in the 21st century.
In a world where most trade barriers have either disappeared or are disappearing, labour mobility and intellectual property rights will be the fault lines where countries can either cooperate or shirk away from each other.
Recognition of this is critical. The economic forces shaping the movement of people are not the same as those for goods and services. Comparative advantage drives cooperation on trade, where even the poorest country can be incorporated into a global market and derive economic benefits.
Migration and labour mobility is different. There is no comparative advantage for countries in labour. Migrants are independent actors with their own economic, security and cultural incentives. Throw this into the relationship between origin and destination countries and you have a much more complex environment than for goods and services or capital.
Despite this complexity, getting the policy mix right has the potential to unlock unrivalled economic gain. Michael Clemens from the Centre for Global Development has shown even minor reductions in barriers to migration from developing countries are equal to the removal of all remaining barriers to goods, services and capital combined. This is good for migrants, origin and destination countries.
The obvious challenge is how labour markets compare to regular markets. Incomes and working conditions are disparate across countries and regions. This creates great tension in rich countries. A new migrant in Australia might be willing to work for $10 an hour, perhaps more than double the income available in her home country for the same job. A new migrant might not be aware of what a union is. At the same time, migration brings real benefits to Australians.
As is playing out in Donald Trump’s push for the Presidency and the far-right in Europe, nationalism on immigration creates the conditions for autarky. Closing the borders, capping migration numbers and squeezing the rights of migrants already in societies. In OECD countries, this will stymie economies and contribute to demographic nightmares.
There are green shoots of this debate on the China-Australia Free Trade Agreement. While the ALP has a strong tradition on trade policy, this isn’t traditional trade policy. For a political party with a labour base, these are not the same as questions from the 1980s. They are more difficult. On the other hand, the Prime Minister’s reference to Billy Hughes and the ‘ghosts of White Australia’ was a clear overreach given the Agreement is about mobility, not race. The union campaign is not characterised by xenophobia but self-interest.
Unlike recent history, no-one in Canberra is against Asian migration. China is firmly entrenched in the top three countries of new migrants arriving in Australia. This will not change anytime soon.
The debate is about how employers use labour in an increasingly regional and global labour market. As much as we may wish it, this cannot be divorced from how countries conduct bilateral and regional economic relationships in 2015.
For Australia, this means a policy debate about the 457 visa program. Opponents of the China-Australia Free Trade Agreement focus on labour market testing, assessing skills and contractual labour agreements. These are not new questions. What is new is having the debate through a proxy like a free trade agreement.
This campaign against the agreement risks a nasty aftertaste. The agreement will not lead to hundreds of thousands of Chinese citizens descending on Sydney – a complete falsehood but one easily imagined if you knew little about the Migration Act. It is particularly important to note that labour market testing is wholly ineffective at getting Australians into employment. There is bipartisan agreement on “Australians first”. Instead of arguing about Facebook job ads, a more effective policy solution is to increase the price of foreign labour through a fee. This creates an incentive to hire Australians and removes administrative paper work.
This is why the government would be unwise to rule out marginal changes within enabling legislation in search of a parliamentary majority to pass the China-Australia Free Trade Agreement. A small number of changes to the 457 visa program – a commitment to index the salary threshold, a higher fee levied on employers to boost the competitiveness of Australians and a commitment to more compliance officials – would quickly see a parliamentary majority emerge.
Australia’s relationship with China is too important to leave to bipartisan political brinkmanship. A shift towards policy considerations would see the agreement passed, along with enabling legislation to better support domestic policy goals.
If you have been following the debate on the China-Australia Free Trade Agreement, you might have noticed the phrase labour market testing. This is bureaucracy-speak for advertising jobs.
Should employers have to advertise jobs before they hire foreign workers? This question has become the be all and end all in the political debate over skilled migrants.
Often overlooked, a bipartisan consensus exists that Australians should have first dibs on jobs in Australia. This should be the end of the story on whether to advertise jobs first. Yet as with much public policy, there is something amiss here. There is no evidence to suggest forcing employers to advertise jobs has any effect at at all on Australian employment.
A thought experiment can help here. Imagine all employers are either good employers or bad employers.
Good employers will comply with all the rules of hiring skilled migrants. More importantly, they will undertake due diligence before they decide to hire a skilled migrant. They will seek out employment from the local labour market if available. This does not occur because they are altruistic but because it is a good business decision. If a business complies with the law, hiring Australians is cheaper than hiring migrants. For these good employers, labour market testing is a hurdle to pass through when there is no locally available option. This points to the superfluous forcing employers to prove they have advertised jobs.
Bad employers are different. Bad employers will not comply with the rules of hiring skilled migrants. They will underpay them and force extra hours on them. They will seek out employment on the cheapest terms possible, sometimes within the law but also outside the law. They will use skilled migrants as an alternative source of labour to Australians to lower their wage bill. For these employers, mandatory job advertising is useless as they have no intention in using Australians in the first place. They can put up 10 Facebook ads and 20 Seek ads and ignore them. In fact, they are happy to do so as it provides the veneer of respectability, allowing them to go about exploiting skilled migrants.
This is the worst part of labour market testing: an utterly false sense of achievement at meeting the broader goal of getting Australians into the workforce.
Some people say you can get labour market testing to work if you enforce it more effectively. This is belies the fact public servants are not very good at figuring out what is going on inside businesses. Thankfully, there is an easier alternative.
Employers respond to prices above all else. By making skilled migrants more expensive, the government would create a better incentive to hire Australians. Instead of creating mountains of paper and internal checks, higher fees would force employers to consider a broader set of options in hiring practices.
This was the original justification to pay equal wages for skilled migrants. If wages are the same between Australians and skilled migrants, all else being equal, the added costs of participation (administration, recruitment etc) in the 457 visa program would see utility maximising firms choose local workers first. However this has broken down in recent years as more skilled migrants are already in Australia, eliminating previously high recruitment costs. Higher fees will ensure Australian’s are ‘cheaper’ without touching wage structures. Coupled with compliance activities, this is a more effective method to improve the treatment of skilled migrants while protecting existing wages and conditions.
The vast majority of businesses do not shirk their responsibilities with regard to migration. They might feel unjustly burdened by a fee increase. However the 457 visa program is too important to be left to its own devices and overtaken by crooks and shonks. There need to be regulated methods at weeding out those who seek profit at the expense of migrants and Australians. A fee increase is a price worth paying for long-term acceptance of the importance of skilled migration and insurance against knee-jerk policy reactions.
I’ve never quite understood why those opposed to the 457 visa program don’t seek to increase the cost structure and instead advocate for a mess of legislative changes. The revenue raised from higher fees would; deter bad employers from using the program, increase the funding available to compliance operations and provide support for things like English language for spouses of skilled migrants. Each of these outcomes are positive for migration policy.
I’ve been pretty unimpressed with the coverage of the Chinese-Australia Free Trade Agreement. A central question has been missing from an avalanche of think-pieces, FactChecks and hot-takes.
What difference will the agreement make if it is passed compared to the status quo we are living in now?
This is my best attempt to answer this question.
- The removal of labour market testing for Chinese citizens
There are three types of occupations in the 457 visa program: Skill Level 1, Skill Level 2 and Skill Level 3. The first two categories do not attract labour market testing. An employer can hire an overseas worker without advertising the job, regardless of the country of origin. Only Skill Level 3 occupations require labour market testing. Using visa grant data from the Department, there were 6207 Skill Level 3 visas granted from July 2014 to March 2015, from a total of 38,134 visas in the program. Using current trends, this means 84 per cent of the 457 visa program is not subject to advertising jobs (source: visa grants pivot table).
In 2014-15 to March 2015, there were 2569 primary 457 visas granted to Chinese citizens. Of these, 269 were classified as “Skill Level 3”, those subject to labour market testing. The Agreement will remove this requirement. These 269 visas are equal to 0.7 per cent of the 457 visa program from July 2014 to March 2015. It may be the case that removing the requirement to labour market testing will induce more migration. However I find this unlikely as wages and economic growth have traditionally been a much greater influence on 457 visa trends. Further, there was no labour market testing from 2001 to 2013.
My best guess is that based on current trends, at most an additional one per cent of the 457 visa program will be exempt from labour market testing if the Agreement passes.
The Agreement also means Australia cannot cap the number of standard 457 visas granted to Chinese citizens. This is exactly as today, given the entire 457 visa program is uncapped and has been since its inception in 1996. This is a common clause found in past FTAs. The highest number of 457 visas granted to Chinese citizens in any financial year was 2012-13 at 3727, equal to 5.4 per cent of visas that year.
- The removal of mandatory skills assessment for Chinese citizens.
Mandatory skills assessment is where a government-approved Registered Training Organisation supervises an exam to certify a visa applicant has the skills relevant for the nominated occupation.
This only applies to citizens from the following countries: Brazil, China (including Hong Kong and Macau), Fiji, India, Papua New Guinea, Philippines, South Africa, Thailand, Vietnam, Zimbabwe.
Further, the visa applicant must be nominated in one of the following 28 occupations: Automotive Electrician *, Fitter-Welder , Baker , Joiner *, Cabinetmaker *, Metal Fabricator *, Carpenter *, Metal Machinist (First Class) *, Carpenter and Joiner , Metal Fitters and Machinists (not elsewhere classified) , Chef , Motor Mechanic (General) *, Cook , Panelbeater , Diesel Motor Mechanic *, Pastrycook , Driller , Pressure Welder , Electrical Linesworker , Sheetmetal Trades Worker , Electrician (General) *, Technical Cable Jointer , Electrician (Special Class) *, Toolmaker , Fitter (General) , Vehicle Painter , Fitter and Turner , Welder (First Class) .
(Source: Trades Recognition Australia)
The Chinese-Australia Free Trade Agreement will remove the mandatory skills assessment for 10 of these occupations (those starred above). The total number of Chinese visa holders nominated in these 10 occupations from July 2014 to March 2015? Fifteen. 15.
For all countries subject to mandatory skills assessment, not just Chinese citizens, a total of 353 visas have been granted in these 10 occupations. Therefore on current trends, the Agreement will remove mandatory skills assessments for 4.2 per cent of those who are currently subject to them for these 10 occupations.
However, and importantly, a total of 1184 visas have been granted in these 10 occupations for the program as a whole. This means over 70 per cent of 457 visas granted in these 10 occupations are not subject to mandatory skills assessments. If one were to retroactively apply the Agreement for 2014-15, a total of 15 Chinese citizens would have joined them.
I should note also that while the mandatory skills assessment has been removed from the visa process, all visa holders must comply with standard licensing and registration requirements. The visa process also requires they present their qualifications and experience. Visa processing officers may request a mandatory skills assessment if they believe they do not believe the bona fides of a visa application.
- The introduction of Investor Facilitation Agreements (IFA)
Unlike the two changes above, this change cannot be tested against current trends. An IFA is a framework to facilitate individual contracts between employers and governments that governs labour mobility outside of the standard 457 visa program.
These contracts already exist. The Minister for Immigration has broad powers under the Migration Act to approve these contracts. They are available to any employer in the country regardless of industry or investment origin. Historically, the time taken to conclude a contract negotiation is between 6 and 12 months.
The two main purposes of the contracts are to slightly lower the English language requirement for visa holders and to allow the sponsorship of Skill Level 4 occupations, lower skilled occupations not allowed under the standard 457 visa program. These contracts typically cover regional and rural areas where attracting labour is more difficult.
Unfortunately, I cannot find the number of labour agreements currently in operation. This goes to the long-standing conservatism inherent in the Department of Immigration around transparency. However at Senate Estimates in February 2014, the Department of Immigration and Border Protection noted 51 had been signed in the previous 6 months.
I believe the IFA under the Chinese-Australia Free Trade Agreement is an attempt to streamline negotiations for these contracts, to reduce the length of time for approval. How many new migrants should be expected through this process?
The Roy Hill project is a good historical example. The Roy Hill Enterprise Migration Agreement covered 1715 positions for a $9.5bn project with a total workforce of 8000. However the threshold to enter into an IFA is much lower. A project must be valued at $150m, not $2bn.
Using the same ratio as Roy Hill, a construction project with 150 workers worth $150m may see about 30 positions covered by an IFA. Applications for these contracts will require detailed estimates of workforce and local training. The majority of these workforces will come from people already in Australia. Negotiations will clearly stipulate the number and type of occupations. The contracts will attract serious attention in Senate Estimates, creating pressure to ensure any agreement is limited in its scope.
I estimate between 10-15 of these agreements will be signed in the 12 months after the Chinese-Australia Free Trade Agreement is finalised. The government will want to show the process works but will not want this to be subject to an ongoing campaign. If 50 agreements signed between September 2013 and February 2014 remains the trend, then 10-15 Chinese IFAs would be a 10-15 per cent of the total number of agreements signed.
If an average of 30 migrants per contract is in the ballpark, this will see 300-450 workers who would otherwise have not entered Australia. This would be equal to about 0.8 per cent of the expected total number of 457 visa grants for that period.
There are substantial unknowns here. These unknowns are what is driving the campaign against the Chinese-Australia Free Trade Agreement. For example, if demand for these contracts exceeds what is expected, this signals the threshold investment level is likely too low. If the number of workers per contract is significantly higher than existing contracts, this signals something is amiss.