ChAFTA Is a Win for the Building and Construction Industry 2

Wednesday, November 18th, 2015
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The unions, particularly the CFMEU and the ETU, have attempted to portray the China-Australia Free Trade Agreement (ChAFTA) as an evil that will undermine Australia’s way of life and living standards when the exact opposite is the case.

The unions’ motives need to be questioned because their misleading campaign coincides with the Royal Commission’s exposure of CFMEU conduct which is totally out of line with community standards of behaviour.

Not only is the CFMEU and ETU campaign politically driven, their claims are simply not supported by the facts.

ChAFTA is one of many bilateral free trade agreements Australia has signed with our key trading partners in recent times, with the list of partners including Korea and Singapore. These agreements deliver economic benefits to the Australian community. ChAFTA also builds on our deep existing economic and cultural ties with China that have been built up over many decades.

China is Australia’s largest two-way trading partner in goods and services (valued at $160 billion in 2013-14) and in goods export (valued at $100 billion in 2013-14). For our industry, Chinese investment is a major driver of construction activity particularly in our major cities such as Sydney. China is the largest source of overseas students studying in Australia, which helps attract investment in new residential building, especially high-rise apartments as well as student accommodation. As the second largest source of visitors to our shores, China is also a major engine of tourism revenue and related construction including hotel accommodation.

Based on analysis by the Centre for International Economics (CIE), the economic benefits of Australia’s North Asian Free Trade Agreements for our industry and the community from ChAFTA will be higher output by an estimated $1 billion and more job creation with an estimated 538 new jobs being created every year for 20 years.

The CFMEU’s scaremongering mostly revolves around incorrect and misleading claims that lack any cogency whatsoever. The union’s contention that ChAFTA will lead to a tsunami of unqualified, unskilled, underpaid Chinese building workers invading Australian building sites and stealing Australian jobs is wrong.

Contrary to what the unions would have us believe, construction industry related 457 visa holders represent only one per cent (10,660) of total Australian construction industry employment.

In fact, employers in our industry use local skilled workers in 99.7 per cent of building and construction employment and access foreign workers only in the case of unique skills shortages, particularly in remote locations.

The Government has confirmed that under ChAFTA the current checks and balances with regard to foreign workers such as those on 457 visas will remain in place. In response to Master Builders’ inquiries, the Government advised that under ChAFTA, skills assessments required for workers seeking temporary 457 visas do not change and consequently there will no diminution of licensing requirements or safety standards.

Construction firms wishing to engage 457 visa workers will need to ensure applicants can demonstrate to the Immigration Department that they possess the necessary skills to work in Australia, including work history, skill qualifications and English language skills. An additional skills assessment will be conducted by an RTO approved by Trades Recognition Australia if required by the Immigration Department, bringing temporary skilled migration arrangements with China in line with other major Australian trading partners including Japan, South Korea and the United States.

Workers from China will also have to comply with respective State and Territory skills requirements including in the important area of safety.

As Master Builders told the Parliament’s Joint Standing Committee on Treaties, we carefully considered ChAFTA before giving it our strong support.  One of the key questions of course was whether the workers from China on 457 visas will be able to meet the high standards demanded on Australia’s building and construction sites. Master Builders was satisfied that all the appropriate checks and balances are in place to make sure that this will be the case and, where non-compliance occurs, that there are appropriate processes in place that can quickly deal with it.

Master Builders also considered the important question of whether, in an overall sense, ChAFTA will take work away from us. Master Builders came to the view that the free trade agreement building work should actually increase investment in offices, factories and warehouses as more and more Australian companies increase their exports to China. This will particularly be a major boon for contractors in the regional areas as they increase their exports of our primary products to China.

ChAFTA allows Australian companies to significantly expand their markets into China, to take advantage of the re-balancing of the Chinese economy toward more consumer-based consumption to meet the needs of the very rapidly growing middle class.

On the flip side, it will also allow more investment dollars to flow from China into Australia, subject of course to our foreign investment criteria. Admittedly, this has been controversial and is likely to continue to be so. Nevertheless, China – like other countries – will play an important role in bringing investment capital into Australia, investment that is critically important if we are to fund our infrastructure and other economic needs to maintain our high living standards.

This investment can be expected to flow across all sectors of our industry, particularly for construction, in agriculture and aquaculture building, hotel and serviced apartments, education and entertainment and recreation.

Master Builders’ vision is for a stronger building industry with an environment that supports our members to grow more successful and profitable businesses, which is why we strongly support ChAFTA and the benefits it will bring to our industry and our community.

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  1. Tim Massie

    Well said.

    The campaign of unions and in particular the CFMEU is irresponsible and wrong.

    In order to create jobs in the future, Australia cannot be backward looking. We must move forward. We must embrace our biggest trading partner and the potential benefits which our ongoing trading relationship with China should deliver. This deal will create opportunities, not destroy them.

    The unions would have some fair points if this deal somehow weakened protections under the foreign worker program. But it doesn't, and they are wrong in saying it does.

    Most Australians want this free trade deal. The unions should get out of the way.

  2. Rob Emerson

    Some of the claims about "skills shortages" pushed by some building industry lobby groups in support of the FTA are questionable, if one reads current data from the Commonwealth Department of Employment and Training DET.

    According to the Department of Employment, “employers continued to recruit skilled workers with little difficulty in 2014”, “consistent with the softness in the labour market”. Further, “with the demand for skilled workers relatively subdued over the past few years, and historically high numbers of graduates entering the labour market from both higher education and vocational education and training, long standing shortages across many occupations have been addressed”.

    The Department notes that “shortages of skilled workers are limited both geographically and by occupation, and the number of occupations in shortage is low by historical standards”