Low-skilled Chinese workers imported to work on large infrastructure projects under the free trade agreement are likely to undercut the wages and conditions of blue-collar Australian workers, a new report has warned.
The warning is contained in a report by Adelaide University legal academic Dr Joanna Howe, which has sparked a new round in the political boxing match over the China-Australia FTA.
On Tuesday, Fairfax Media revealed Dr Howe's findings that in the absence of mandated labour market testing, the Turnbull government will "effectively surrender autonomy over its migration laws" and invite a wave of Chinese workers into Australia, driving down local wages and conditions.
Prime Minister Malcolm Turnbull dismissed her work as part of a "grossly misleading" union campaign and Trade Minister Andrew Robb said her report – the result of three months sifting through the FTA and its attachments – was "not worth the paper it's written on".
Neither Mr Robb nor Mr Turnbull had read the 18-page report by Dr Howe, a former Rhodes Scholar, before dismissing its findings.
Penny Wong, Labor's Senate leader and trade spokeswoman, said the report had identified "serious deficiencies" in the FTA that needed to be addressed
"These findings must not be ignored by Mr Robb and Prime Minister Malcolm Turnbull," she said.
And the Electrical Trades Union, which commissioned the report but had no editorial input into it, said the Coalition had taken Dr Howe's advice before on its 457 visa program and could not "summarily dismiss" her work on the FTA.
"The suggestion that someone of her standing would compromise their integrity and impartiality is an absurd smear," said ETU national secretary Allen Hicks.
Dr Howe's report, which found the FTA will "greatly increases the pathways for Chinese workers to enter the Australian labour market" to work for Australian employers, also found Chinese companies could choose to import their workforce on projects worth over $150 million – known as "investment facilitation arrangements" or IFAs.
She found that Chinese workers on IFAs must only be paid at the base award rate for their occupation rather than the higher "market salary rate" of Australian workers who have negotiated better conditions through enterprise bargaining.
"This means the ChAFTA could be used to create an IFA which undercuts local wages and conditions because although local workers may expect to be paid a higher rate for a certain occupation as provided for in the relevant enterprise agreement, a Chinese worker may be willing to work for the far lesser rate provided for in the award," she found.
The FTA "provides Chinese employers with a relatively easy way to cut labour costs on infrastructure development projects," the report states.
The FTA will allow Chinese workers to be brought into Australia to work on $150 million-plus infrastructure-related projects, within the food and agribusiness, resources and energy, transport, telecommunications, power supply and generation, environment or tourism sectors.
The Coalition has claimed the framework for IFAs is comparable to "enterprise migration agreements" introduced by the Rudd and Gillard Labor governments but their threshold was set at $2 billion, meaning the FTA will allow for many more projects.
"This could be a major avenue for recruitment of migrant labour," Dr Howe found.
She also warned that Chinese workers looking to send money home were not likely to blow the whistle on employers paying below award rate.
In Beijing, the hourly minimum wage is equivalent to about $3.95 compared to $17.29 in Australia.
