More FactChecking: The ABC on ChAFTA

This ABC FactCheck article on the Chinese-Australia Free Trade Agreement received a lot of attention this week.

Fact check: Does the China Free Trade Agreement threaten Australian jobs?

The claim: Unions say the China-Australia Free Trade Agreement “allows Chinese companies to bring in their own workforce for projects over $150 million and removes the requirement that jobs be offered to local workers first.

The verdict: The agreement allows the Immigration Department to decide that jobs should be offered to local workers before it issues visas to overseas workers, but it does not require this to happen. The ACTU’s claim checks out.

The claim addresses two distinct issues in the Chinese-Australia Free Trade Agreement. The verdict conflates these issues so much so any reader will walk away with an opinion far from “fact”.

Chapter 10 of the Chinese-Australia Free Trade Agreement has removed the requirement for jobs to be offered to local workers under the standard rules of the 457 visa program. If the agreement were retrofitted to the 457 visa program, it would affect about one per cent of all visa holders in Australia at the moment. One per cent.

For some reason the government does not want to tell anyone this. Labour market testing – the process of advertising jobs – only applies to ~30 per cent of the standard 457 visa program. Everyone knows labour market testing is ineffective at pulling Australians into the labour market. This is the reason why seven in ten 457 visas are not subject to mandatory labour market testing.

The most effective way to promote Australians in the labour market is to create a greater price incentive. A 457 visa should cost the sponsoring business more money. This will make them consider alternatives, such as unemployed Australian workers. Any money raised can help support settlement services like English language and/or monitoring and compliance for the program.

The side agreement for projects over $150m is wholly distinct from the standard rules of the 457 visa program.

The Memorandum of Understanding concerns individual contracts signed between a company and the government. There is no legislation that outlines labour market testing must occur in these contracts. Any claim this assumes this already occurs is false. The ACTU claim cannot “check out” because it is based on a false assumption that a requirement has been removed. The only requirement that has been removed is mentioned above, in relation to the standard rules of the 457 visa program.

Further, the side agreement does not cover unskilled occupations, meaning these jobs must be filled by Australian workers.

At best, this FactCheck is ignorant of critical context. At worst, disingenuous.

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