Building on Labor's legacy of closer ties with China - Terri Butler MP, Labor for Griffith

Building on Labor's legacy of closer ties with China

Labor has stood firm in saying that the China-Australia Free Trade Agreement should serve the interests of Australians, and not threaten their prosperity and safety by undermining labour and skills standards.



Ms BUTLER (Griffith) (20:10): I support closer ties with China, and I support Australian jobs and conditions. Consistent with my belief that it is strongly positive for Australia to continue to build a durable and close relationship with China, I am an enthusiast for entering into a China-Australia Free Trade Agreement. But that does not require me to be an uncritical cheerleader of any agreement served up by this coalition government. My support for closer ties with China does not of itself remove my concerns about the effect of the agreement, and about labour and skills. It is more important than ever before in the post-war period to be careful about the consequences of our decisions about labour, skills, and power at work.

Before going to those issues I wish to thank the Leader of the Opposition, and the Leader of the Opposition in the Senate, Senator Wong, along with all of Labor's leadership and front bench, for their work in seeking and achieving real change in relation to the implementation of the China-Australia Free Trade Agreement.

In the face of the Tories' shameful and silly name-calling campaign, Labor has stood firm in saying that this trade agreement should serve the interests of Australians, and not threaten their prosperity and safety by undermining labour and skills standards.

I also acknowledge the work of those union leaders standing up for skills and jobs, and I thank everyone who has pushed through the posturing and pomposity from the Tories, to drag them to the negotiating table. Frankly, it is about time that the coalition stopped trying to exercise command and control, and started negotiating instead.

As I have said in this place before, Labor has shown great leadership over many decades in building the relationship between China and Australia. Ten days from now will be the 42nd anniversary of the first visit of a sitting Australian Prime Minister to China. Gough Whitlam had already been to China, as opposition leader, in 1971, and you will recall that he went to China even before the US in that year. By the time he returned, in October 1973, he was Prime Minister. His visit marked Australia's trade agreement with the People's Republic of China.

The coalition at the time rubbished Gough's interest in China. Prime Minister McMahon thought Australia was at risk of becoming a pawn of the great communist power in the region. As always, the coalition was backward, while Labor looked forward, and very little has changed. Today, on the first anniversary of his death, it is particularly important to acknowledge his legacy, not just in relation to China, but in relation to everything he did for this nation.

Every Labor Prime Minister in the decades since Gough's visits to China has done his or her part to strengthen this nation's relationship with China. As I have said previously in this House and outside, I am a strong supporter of a China-Australia Free Trade Agreement and closer ties with China. I want to see the economic benefits. I want Australian industry and firms to have greater access to Chinese markets. I want more Chinese visitors to come to Australia, whether for education or tourism, our two biggest service export industries. I want the broader benefits that come with closer ties. The world is changing. Power is changing. China is changing. We have to respond to that change.

As I said, none of that makes me an uncritical cheerleader. This is a parliament, not a fan club. It is our obligation, not just our right, to apply scrutiny to trade deals. I am far from alone in thinking that scrutiny is required. Earlier this year, the Productivity Commission wrote of the need for greater evaluation of preferential bilateral and regional trade deals. The commission wrote:

… preferential trade agreements are not as effective in improving national welfare as unilateral action to reduce or eliminate trade barriers (primarily through greater domestic competition), or multilateral trade and investment liberalisation … Preferential agreements also add to the complexity of international trade and investment, are costly and time consuming to negotiate and add to the compliance costs of firms (in the evaluation and utilisation of preferences) and administrative costs of governments.

The Productivity Commission noted that multilateral trade liberalisation is preferable to bilateral and regional preferential agreements and went on to draw attention to several concerns about those preferential agreements, such as this bilateral deal with China, including differing rules of origin for merchandise and services trade and investment; variable coverage of services across agreements and the likely effectiveness of services sector liberalisation; likely costs of more stringent intellectual property rights protection; concerns about the variability, effectiveness and unfunded liability posed by investor-state dispute settlement provisions—and there is one in this agreement, of course; and the evaluation of negotiated text of agreements. Each of those is a valid concern, of course, and with respect to the commission. I share those concerns.

I am also concerned about the labour market impacts and skill impacts of trade agreements that affect migration and labour. Labour and skills concerns are important, notwithstanding the attempts by those opposite to downplay and dismiss them. In Australia, labour's share of national income has been in decline since the late 1970s compared to the profit share of national income. Wages growth is sluggish, the slowest it has been since the wages price index began being kept in the 1990s, and inequality is on the rise. Those at the bottom of the income distribution—and I am talking about the bottom 40 per cent—have shared in the benefits of our national prosperity disproportionately less than those at the top of the income distribution.

Those facts should alert us to the need to think about power at work and why working people seem to be less able now than at any time in the past 100 years to exercise power in their own financial interests. It is no accident that increasing job insecurity and declining collectivism are leading to workforces having less power vis-a-vis their employers. This is not to dismiss the challenges that employers face in building enterprises, taking risks and creating value. Ultimately, you do not have to choose between supporting workers and supporting business. Their shared interests are obvious. And, more broadly, everyone in our nation has a shared interest in avoiding extreme inequality given it is a handbrake on growth and bad for community cohesion and security. To curb the increase in inequality, it is important that people on low and middle incomes, including people whose labour is their living, are able to exercise power at work. I say that because of the way wages and other forms of labour income are fixed in this country. Since the early 1990s, we have had enterprise bargaining of various kinds. In addition, at common law, people have employment contracts, or contractor arrangements, individually with their employers or principals, as the case may be. Almost since Federation we have had an award system which has set, variously, minimum and paid rates. Nowadays, those award rates are low and intended to be minimum rates. In addition, we have a minimum wage which should be the lowest rate paid to employees. The wages and conditions fixed under those different mechanisms, formal and less formal, depend, to varying extents, on the relative power of the owners and those who work for them.

It is just naive and wrong to think that the parties to employee-employer relationships and similar relationships are in a perfect equilibrium of power all of the time. For those on the labour side, power depends on many things. It depends on whether you are acting collectively or individually. It depends on whether it is a buyer's market or a seller's market for the type of labour you have to offer. And it depends on your job security. If you are scared you could lose your livelihood easily, that gives you less power.

That is one reason why I am so concerned about job insecurity. Job insecurity does not just make it harder to convince a bank to give you a mortgage or to plan your family's future. It reduces your power compared to your employer's in circumstances where you already have less power almost by definition. Job insecurity has been on the rise in Australia for the past 35 years. Firstly, casualisation rose sharply from the 1980s to the early 2000s. At the same time, there was a distinct move away from employment to contracting. The Productivity Commission's report Self-employed contractors in Australia: incidence and characteristics observed that the share of self-employed contractors in total employment grew at least 15 per cent over the two decades to 1998. Employers found new ways to reduce job security by using labour hire. Labour hire grew at 15.7 per cent per year from 1990 to 2002—massive growth. It remains to be seen how the new trend towards platform economics will affect job insecurity. This insecurity and the effect on millions of Australians' conditions and living standards is why the member for Scullin and I have written to the Productivity Commission asking them to rethink their cursory and dismissive treatment of job insecurity in the current inquiry into the workplace relations framework. All of those job insecurity questions are relevant to power—and there is another one we need to consider a nation.

As a nation, we need to come to grips with the power differential between temporary skilled migrants and their employers. Mr Deputy Speaker, as you know, temporary skilled migration is a particularly insecure form of work. If you are new to this country, you are unfamiliar with our laws and your visa conditions require you to either keep your job or leave Australia, the possibility of exploitation is obvious. When I was in practice, I represented a man who was here on a subclass 457 visa, a man by the name of Djoko Puspitono. His case is reported in the Federal Court papers. Shortly after complaining about his employer not paying him overtime and not paying his superannuation, among other things, Djoko was sacked. The termination letter told him he had five days to return to Indonesia. I asked the Federal Court to reinstate him and the company surrendered. They flew the white flag. He was reinstated by consent, on an interim basis, but later he was sacked again. Ultimately, he returned to Indonesia. In the later court decision, the judge recorded that Djoko left because he could not find another sponsor to take over his subclass 457 visa, he did not want to be in Australia illegally and he did not have enough money. The court went on to note that Djoko had paid for his own return to Indonesia, as well as paying for the transport of his possessions. It was a terrible story, where this person found that he was at a significant disadvantage as a consequence of having the temerity just to ask to be paid for the work that he did and to receive his entitlements.

Ultimately he was successful in his claim against the company. The court awarded him compensation. But the decision came three years after the initial sacking, almost to the day. And if it had not been for his membership of his union he would have had neither the power nor the resources to challenge a company that was prepared to exploit and sack him. For every person like Djoko who speaks out, who has a union behind him, there will be many more subclass 457 visa holders who will not, who do not have the power, who do not have a unions behind them, who do not have the opportunities that he had.

My point is that temporary skilled migrants are less powerful—probably by definition—than permanent Australian employees. And in a country where wage fixing depends on working people having a reasonable amount of power, it should be obvious that having large numbers of powerless people in an occupation puts at risk not just those people's own pay and conditions but the pay and conditions of others across the industry or sector in which they work. There are hundreds of thousands of temporary skilled migrants in Australia. I support the temporary skilled migration scheme. I want employers to be able to manage skills and labour shortages, and that scheme should operate with integrity. It should not be a means of reducing the workforce's power or pushing-down pay and conditions. Those on subclass 457 visas need security, and because of their special vulnerability they need protection from exploitation. There should never be an economic incentive, intended or otherwise, to hire a temporary skilled migrant ahead of a local, because that is an incentive to misuse the scheme. It should be a genuine scheme to deal with short-term skills shortages, and those who use it—those who seek to benefit from the scheme—ought to demonstrate their commitment to skilling Australians for Australian jobs into the future so that we can reduce our reliance on temporary skilled migration by actually planning for the skills we need.

As the member for Gray knows, one of the resources companies told us they had Norwegians operating on one of the big resources projects because they could not get the skills they needed in Australia. This is why Bill Shorten has been talking for such a long time about skills, about science, about technology, about engineering and mathematics. This is why Labor has led the charge to improve the skills needed for those types of occupations in this country. The obligation, the national interest, should be: how do we ensure that Australians have the jobs in the future? We ensure that Australians have the skills they need for the jobs of the future.

So, temporary skilled migration, while an important tool and one that should be maintained, needs to be what it was intended to be: an opportunity to fill skills gaps while at the same time working to prevent skills gaps from arising in the future. It is a challenge, and it is becoming more difficult as jobs change more rapidly. But we have to come to grips with this. We have 800,000 people on the unemployment queues in Australia. It is a national disgrace. We need to come to grips with this. I share the labour market concerns that arise from preferential deals like this. I want to see us as a nation come to grips with how we make sure that those who do come are treated with respect and dignity and are not exploited and that we decrease the reliance on temporary skilled migration into the future.

I am also concerned about skills particularly in occupations where skills are crucial in relation to worker and public safety, as is the case with electrical workers. I acknowledge the Electrical Trade Union's concerns in that regard, and I commend them for their advocacy in workers' interests and the national interest. It would be nice if instead of complaining about their advocacy those opposite actually acknowledged the work that union has done in the public interest and that other unions have done, including the CFMEU, who those opposite like to complain about, to draw to the public's attention the issues of concern in respect of jobs.

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