China wants to import workers under FTA
FInancial Review | 15 Apr 2014
China wants to import workers under FTA
PHILLIP COOREY
THE federal government is facing demands from China that it be allowed to import workers for projects funded by Chinese investors as part of the free-trade agreement.
The government is resisting, saying there would be a severe domestic political backlash should it ever agree.
Eager to land the FTA with China, it is looking at ways to target the issuance of 457 visas towards projects that the Chinese want to build and for which the workers and the skills cannot be obtained in Australia.
Prime Minister Tony Abbott hopes to reach agreement with Chinese President Xi Jinping in November when he visits Australia for the Group of 20 leaders’ summit. Senior sources intimate with the negotiations say imported labour and investment are now the two main sticking points.
Mr Abbott has already indicated Australia will offer Chinese state-owned enterprises special treatment by removing or changing the requirement that all investments have to be approved by the Foreign Investment Review Board.
While this has sparked alarm among some regional politicians, Queensland Nationals MP Bruce Scott said Chinese foreign investment, including that from some SOEs, should be embraced.
Furthermore, Mr Scott, who holds the rural Queensland seat of Maranoa, said the government’s agricultural white paper should review plans to impose a $15 million FIRB threshold for all investors on the purchase of farmland and a $53 million threshold on established agribusinesses.
These were agreed to as Coalition policy due to pressure from the Nationals but Mr Scott believes these would be ineffective and possibly ward off investment.
"In order to meet new challenges, we need new investment and foreign investment partnerships are imperative."
As part of the FTA, China will be offered the same deal as South Korea and Japan which will lift the FIRB threshold from $248 million to $1 billion for an investment by a private company. But because the vast majority of Chinese companies are state owned, the Chinese want preferential treatment.
In Shanghai last week, Mr Abbott started making the case, saying: "We now appreciate that most state-owned enterprises have a highly commercial culture. They’re not nationalised industries that we used to have in Australia."
The government wants Chinese money, especially to develop new agricultural projects and build new infrastructure in the nation’s north.
But the Chinese are negotiating that the FTA allow them to bring in their own workers to build and, in some cases, operate such projects. "They are pushing pretty hard on this sort of thing, especially on regional projects," said a source.
"They can be deployed quickly and bring in the skills they need.
"It’s one of the issues being discussed but we’re not going to open the floodgates."
The government does not want to jeopardise the FTA and is looking at "lateral ways of doing things".
The 457 visa system is being reviewed by the government and one option would be to offer the Chinese 457 visas for specific projects, should the skills and labour not be available domestically.
One senior rural Coalition MP, who did not want to be named, said Mr Abbott’s sudden embrace of Chinese state-owned investment would create anxiety.
"There’s a suspicion that they will fix up the financial position by selling the place to the Chinese," he said.
He said the exuberance which accompanied Mr Abbott’s free-trade mission in Asia last week needed to be "tempered by the reality at home".
