Background
5.1
This Chapter examines the evidence the Committee received concerning Chapter 12 of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP 11), covering the movement of persons between TPP 11 countries for business purposes.
5.2
The intent of Chapter 12 is to reduce the barriers to persons wishing to conduct business in another TPP 11 country by allowing those persons easier entry to the country and reducing the regulatory barriers limiting their activities within a country.
5.3
Chapter 12 of the TTP 11 expands on previous trade agreements to include preferential temporary entry for Australian professional business persons (and their spouses) with a number of TPP 11 Parties on a reciprocal basis.
5.4
Annex 12-A of the TPP 11 details Australia’s commitments in relation to the entry of business persons. The commitments are as follows:
business persons and service sellers from all Parties gain temporary entry into Australia for business purposes provided their remuneration is sourced outside Australia;
installers or servicers of machinery or equipment who are remunerated from outside Australia gain temporary entry for business purposes from other TPP 11 Parties that have similar commitments in relation to installers or servicers;
intra-corporate transferees who are either executives, or technically or professionally employed, in TPP 11 Parties which have made similar commitments, gain temporary entry to Australia for business purposes provided their organisation has an ongoing presence in this country and they meet the necessary Australian skills requirements;
independent executives or people seeking to invest or establish a business office in Australia from all TPP 11 Parties gain temporary entry into Australia;
contractual service suppliers, including professionals and technical professionals, from other TPP 11 Parties making similar commitments gain entry provided they meet the necessary Australian skills requirements.
5.5
The Business Council of Australia (BCA) points out that Chapter 12 of the TPP 11 applies to Australians wishing to pursue opportunities in other TPP 11 Parties.
5.6
The BCA believes that as a strongly services-oriented economy, Australia’s best interests will be served by ensuring that removing barriers to the ability of Australian business people and professional service providers to operate in overseas markets will facilitate overseas investment by Australian business.
5.7
The Minerals Council of Australia (MCA) makes the same point in relation to mining services.
Contractual service providers
5.8
Provisions permitting the entry of contractual service providers continue to be a concern for a number of inquiry participants.
5.9
The commitment by Australia in Annex 12-A of the TPP 11 identifies a contractual service supplier as a person assessed as having the necessary qualifications, skills and work experience to meet the domestic standard in Australia for their nominated occupation.
5.10
Annex 12-A of the TPP 11 provides the following:
In accordance with, and subject to, Australia’s laws and regulations, Australia shall, upon application, grant the right of temporary entry, movement and work to the accompanying spouse or dependants of a business person that is granted temporary entry or an extension of temporary stay under these commitments.
5.11
The arrangement is reciprocal. In other words, it only applies if another TPP 11 Party makes the same commitment. Reciprocal commitments have been made by: Brunei; Canada; Chile; Japan; Malaysia; Mexico; New Zealand; Peru; and Vietnam.
5.12
The types of employment open to the contractual service suppliers from other TTP 11 countries are contained in the List of Eligible Skilled Occupations, administered by the Department of Jobs and Small Business.
5.13
The List is regularly reviewed to ensure that, where there are sufficient people in particular skilled profession to fill available jobs, that profession is not included in the List.
5.14
The combined effect of these provisions is that contractual service suppliers from Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand Peru, and Vietnam are permitted to enter Australia to work temporarily where:
they are sponsored by an employer;
they meet the necessary qualifications; and
their profession is contained in the List of Eligible Skilled Occupations.
5.15
Many submitters argue as a basic principle that:
… a matter of critical importance for Australian workers is the ongoing commitment that they will have first access to Australian jobs, through a labour market testing obligation on employers to provide evidence they have made all genuine efforts to find a suitable Australian worker before they employ a temporary overseas worker.
5.16
The Australian Council of Trade Unions (ACTU) claims in particular that Australia has provided preferential access to temporary skilled migrants in a broader range of occupations than Australia has been able to secure from other TPP 11 countries.
5.17
Australia’s commitments in relation to contractual service providers cover all trade, technical and professional occupations, while other countries’ commitments are, for example, as follows:
Chile defines a contractual service provider as a business person engaged in a ‘special occupation’;
Japan defines a contractual service supplier as a person employed by an overseas company or in an advanced research position; and
Malaysia confines contractual service providers to professional services, education and financial services.
5.18
The ACTU believes that, as a basic principle, employers should always have an obligation to employ Australians first, and that this obligation should not be removed through trade agreements.
5.19
The Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) expresses a similar concern, observing:
The Government’s approach … tends to use labour mobility as a bargaining chip in trade agreements. Their approach would appear to be the result of a combination of a having little left to trade after years of unilateral liberalisation of tariff barriers …
5.20
Alternatively, the ACTU argues that, if it is necessary to continue making such commitments in trade agreements, these commitments should not be extended to contractual service providers.
Number of temporary visa holders who can work
5.21
Inquiry participants engaged in a debate over the number of temporary visa holders eligible for employment in Australia.
5.22
While the debate doesn’t deal specifically with TPP 11 Parties, it illustrates the degree of disagreement in the public debate about this issue.
5.23
The MCA analyses the effects of recent free trade agreements on the number of contractual service suppliers entering Australia.
5.24
The MCA’s analysis shows that the after the ratification of the China-Australia Free Trade Agreement (ChAFTA), contractual service suppliers visa entries from China declined by 15 per cent in 2016 and 17 per cent in the first three quarters of 2017.
5.25
In addition, the Minerals Council notes that the TPP 11 countries covered by the contractual service supplier provisions are not significant sources for temporary skilled migrants into Australia.
5.26
The ACTU states that it:
… would disagree with some of that analysis. You have to look at multiple different visa types to understand the numbers of temporary workers coming in from ChAFTA.
5.27
According to the Department of Home Affairs, the total number of temporary visa holders with work rights in Australia includes:
visas for temporary work and activity, graduates, and other temporary residents, which provide work rights; and
students, working holiday makers and New Zealand citizens have incidental work rights, and work is not the primary purpose of the visa.
5.28
In terms of number, the Department advised that as of 31 May 2018, there were 1,485,353 primary temporary visa holders in Australia with work rights, and a further 150,498 secondary temporary visa holders with work rights.
5.29
Statistics on the number of temporary visa holders that are eligible for work are available for a number of countries. In this case, the Committee has included statistics on China, Malaysia and Vietnam.
5.30
In 2014/2015, 6,653 temporary visas were issued for skilled workers from China. This is an increase of 38.5 per cent over the number of the same visas granted in 2011/2012. It is worth noting that the time period of the statistics available to the Committee are different to those provided by the MCA.
5.31
In the same year 65,737 temporary student visas were issued to Chinese students studying in Australia. This is an increase of 32.6 per cent over the number of the same visas granted in 2011/2012.
5.32
Both categories of temporary visa holders can work in Australia.
5.33
For Malaysia, there were 1,152 temporary visas for skilled workers issued in 2014/2015, a decline of 38.6 per cent over the number of the same visas granted in 2011/2012. The number of temporary student visas granted to Malaysians in 2014/2015 was 10,414, an increase of 11.8 per cent over the number of the same visas granted in 2011/2012.
5.34
For Vietnam, there were 1,021 temporary visas for skilled workers issued in 2014/2015, a 68.5 per cent increase over the number of the same visas granted in 2011/2012. The number of temporary student visas granted to Vietnamese students was 10,283 in 2014/2015, an increase of 26 per cent over the number of the same visas granted in 2011/2012.
Temporary visa workers issues
5.35
Issues relating to the skills and working conditions of temporary visa holders in Australia are a concern for a number of participants in the inquiry.
5.36
The Electrical Trades Union (ETU) argues that an independent and transparent process for both skilled and semi-skilled temporary visa holders is necessary to ensure that qualifications gained overseas meet the contemporary requirements of Australian qualifications and licensing arrangements. According to the ETU, this is in the interest of the worker, employers and, in particular, the public and their safety.
5.37
The ETU’s concern is focussed on professional standards in the electrical trades. According to the ETU:
… the TPP represents a likely introduction of significant regulatory challenges at a time when the industry is already grappling with too many challenges, including defunding of the licencing and training institutions which are needed to uphold the quality and value of our well trained Australian electrical workers.
5.38
According to the ETU, the skills assessment for electrical trades as a result of the entry on temporary visas of skilled workers involves:
… immigration officers … determining, through an administrative process, whether or not a licensed electrician actually has the skill set necessary to carry out electrical work in this country.
… what would have occurred is that they would have come to Australia, said that they were an electrician and, before they were granted entry into this country, they would have had to undertake a practical skills assessment. Part of that assessment was a technical skills assessment, so it was a theoretical and technical skills assessment. That was done by a registered training organisation to determine whether or not they had the necessary skill sets, work experience and qualifications to undertake electrical work in this country.
5.40
The ETU argues that this is effectively a paperwork assessment that does not guarantee that temporary visa holders will have the same skills levels, occupational health and safety standards and qualifications required for Australian workers in the same jobs.
5.41
The ETU is concerned that this will place pressure on the resources of agencies policing and enforcing licencing checks.
5.42
Using electricians as an example, there are a number of countries from which skilled temporary visa holders have to go through a mandatory skills assessment because of concerns about the training and licencing system in those countries.
5.43
The list of countries from which electricians are required to undertake mandatory skills assessment includes Vietnam, one of the countries from which contractual service suppliers can be sourced without market testing under the TPP 11.
5.44
Mandatory skills recognition is undertaken by a Trades Recognition Service. For electricians, this will include a technical interview and practical assessment.
5.45
According to the Department of Foreign Affairs and Trade (DFAT):
Under Australian law, any foreign worker, such as an electrician, would be obligated to undergo the same skills-testing as required by an Australian worker. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership does not change this requirement.
5.46
The vulnerability of temporary migrant workers is also an issue for a number of inquiry participants. For example, Ms Carolyn Allen stated:
The TPP-11 also has provisions for more vulnerable temporary migrant workers from Vietnam, Malaysia, Japan, Canada, Mexico and Chile without first testing if local workers are available.
5.47
According to the ETU:
Unfortunately, there are still many employers who seek to exploit overseas workers …
5.48
The ETU described a particular example of this, but there has been other evidence of rogue behaviour that causes concern for the welfare of employed temporary visa workers in general.
5.49
It is beyond the scope of this inquiry to look into these cases and the issues associated with them.