About this inquiry

This inquiry will examine the following treaty: Trans Pacific Partnership Agreement between the Government of Australia and the Governments of: Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam, associated side letters and proposed Australian notification on tobacco control measures (Auckland, 4 February 2016)



Past Public Hearings

07 Nov 2016: Canberra, ACT
17 Oct 2016: CANBERRA, ACT
07 Oct 2016: MELBOURNE, VIC

8. Temporary Entry for Business Purposes

8.1
Aspects of the Trans-Pacific Partnership Agreement’s (TPP) temporary entry for business persons provisions were a significant concern for many participants in the inquiry. This Chapter considers their concerns.

Background

8.2
The temporary entry for business persons provisions in the TPP expand on previous free trade agreements to include preferential temporary entry for Australian professional business persons (and their spouses) with a number of TPP parties on a reciprocal basis.1
8.3
Annex 12-A of the TPP 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 may gain temporary entry into Australia for business purposes provided their remuneration and financial support is sourced outside Australia;
installers or servicers of machinery or equipment who are remunerated from outside Australia may gain temporary entry for business purposes from other TPP 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 parties which have made similar commitments, may gain temporary entry to Australia for business purposes provided their organisation has an ongoing presence in this country and, in relation to the professional and technical transferees, they meet the necessary Australian skills requirements;
independent executives or people seeking to invest or establish a business office in Australia from all TPP parties may gain temporary entry into Australia;
contractual service suppliers, including professionals and technical professionals, from other TPP parties making similar commitments, are entitled to temporary entry into Australia provided they meet the necessary Australian skills requirement and are sponsored by an employer in Australia.2

Temporary entry issues

8.4
Inquiry participant concerns specifically related to those TPP provisions applying to contractual service providers.
8.5
The Australian Council of Trade Unions (ACTU) indicated it had a basic concern with the concept of labour mobility in free trade agreements:
The priority must always be on maximising jobs and training opportunities for Australians – that is, citizens and permanent residents, regardless of their background or country of origin. Whether it is young Australians looking for their first job or older Australians looking to get back into the workforce or change careers, they deserve an assurance that they will have first access to Australian jobs.3
8.6
The Electrical Trades Union (ETU) stated:
The absence or removal of Labour Market Testing for broad classes of employees, particularly those that fall within the ‘Contractual Service Supplier’ category means all 457 visa sponsoring companies can import unlimited numbers of workers under the standard 457 visa program without first having to provide evidence that these workers meet a skill shortage and domestic workers are not available.4
8.7
The ETU identified two concerns about the TPP provisions relating to contractual service providers:
Australian workers would be undercut in the job market by a supply of immigrant working poor reliant on their employers for ongoing work; and
workers from other countries may not meet Australian standards of training and may not be aware of Australian practices, such as electrical wiring practices.5
8.8
The Australian Manufacturing Workers’ Union expressed similar concerns.6

TPP Commitments

8.9
The commitment by Australia in Annex 12-A of the TPP identifies contractual service suppliers as:
Business persons with trade, technical or professional skills and experience who are assessed as having the necessary qualifications, skills and work experience accepted as meeting the domestic standard in Australia for their nominated occupation.7
8.10
Contractual service suppliers who come to Australia using the TPP provisions are entitled to remain for 12 months.
8.11
The arrangement is reciprocal. In other words, it only applies if another TPP party makes the same commitment. Reciprocal commitments have been made by: Brunei; Canada; Chile; Japan; Malaysia; Mexico; New Zealand; Peru; and Vietnam.
8.12
The types of employment covered by the contractual service suppliers provisions are listed in the Consolidated Sponsored Occupations List, administered by the Department of Immigration and Border Protection (DIBP).8
8.13
The list is quite long, and is based on the Australian and New Zealand Standard Classification of Occupations.9

Mandatory skills assessment and labour market testing

8.14
In order for a contractual service supplier to enter Australia, they must be sponsored by an Australian based employer under what is known as the ‘457 visa program.’ The name derives from the type of visa such contractual service suppliers are given – the Temporary Work (skilled) Visa (subclass 457).10
8.15
Workers entering Australia on 457 Visas must meet certain obligatory requirements. Those relevant to the issues discussed here are an obligation for the workers to meet a mandatory skills assessment and, unless otherwise permitted, the employer to conduct a labour market test.
8.16
The mandatory skills assessment is a mechanism for ensuring that 457 visa applicants have the skills necessary to meet Australian standards for that profession. This can involve recognition of an overseas qualification or a skills assessment to test qualifications.11
8.17
In relation to the skills required of contractual service suppliers under the TPP, Australian Government witnesses stated:
… you cannot operate here unless you have met that registration requirement, regardless of what your qualification is offshore. It is then up to those state regulatory authorities to determine if there is an equivalency.12
8.18
In other words, any mandatory skills assessment required as part of the 457 visa process applies to contractual service suppliers entering Australia under the TPP.13
8.19
Labour market testing requires employers seeking to access the 457 visa program to first test the local labour market, to ensure that there is no suitably qualified and experienced Australian citizen or permanent resident.14
8.20
Section 140GBA of the Migration Act 1958 imposes labour market testing for 457 visas. The section provides that the Minister may, by way of legislative instrument, waive a requirement for market testing for 457 visas where there is an international trade obligation to do so.15
8.21
The Australian Government advised that it intends to waive labour market testing for contractual service suppliers in relation to TPP parties where reciprocal arrangements were in place.16
8.22
Waiving labour market testing raised a concern that contractual service suppliers might deprive qualified Australians of job opportunities.
8.23
However a number of employer representatives indicated that it costs more to use temporary contractual service suppliers than to employ Australian workers.
8.24
The Western Australian Chamber of Commerce noted:
… our experience for our members is that accessing labour overseas is always more expensive and more complicated. Where there are people available locally, that is always their first preference.17
8.25
The Minerals Council of Australia (MCA) stated:
Using 457s is more expensive than if you can locate local professionals and tradespeople, so we do not do it unless we have to because it is more expensive. 18

Conclusion

8.26
The Committee notes there were concerns expressed about temporary entry for business persons during the inquiry.
8.27
Access for contractual service suppliers under the TPP is limited to those parties that have offered reciprocal arrangements. In other words, Australia will only allow temporary entry to contractual service suppliers from those countries that permit similar access to Australian contractual service suppliers.
8.28
Contractual service suppliers coming to Australia under the TPP will be obliged to meet the skills requirements all other 457 visa temporary workers are required to meet.
8.29
In relation to the potential for contractual service suppliers entering Australia under the TPP depriving Australian workers of employment opportunities, the Committee notes the evidence of a number of employer organisations that using Australian workers is almost always preferable to using overseas workers.

  • 1
    Ms Elizabeth Ward, First Assistant Secretary, TPP Chief Negotiator, Office of Trade Negotiations, Department of Foreign Affairs and Trade (DFAT), Committee Hansard, Canberra, 22 January 2016, p. 2.
  • 2
    TPP, Annex 12-A.
  • 3
    Australian Council of Trade Unions (ACTU), Submission 101, p. 9.
  • 4
    Electrical Trades Union (ETU), Submission 171, p. 3.
  • 5
    ETU, Submission 171, p. 3.
  • 6
    Australian Manufacturing Workers’ Union (AMWU), Submission 116, p. 1.
  • 7
    TPP, Annex 12-A.
  • 8
    Mr Wilden, DIBP, Committee Hansard, Canberra, 7 November 2016, p. 12.
  • 9
    The list can be accessed here: https://www.border.gov.au/Trav/Work/Work/Skills-assessment-and-assessing-authorities/skilled-occupations-lists/CSOL.
  • 10
    Department of Immigration and Border Protection, ‘Temporary Work (Skilled) visa (subclass 457),’ < https://www.border.gov.au/Trav/Visa-1/457-> accessed 13 November 2016.
  • 11
    Department of Immigration and Border Protection, ‘Temporary Work (Skilled) visa (subclass 457),’ < https://www.border.gov.au/Trav/Visa-1/457-> accessed 13 November 2016.
  • 12
    Mr Wilden, DIBP, Committee Hansard, Canberra, 7 November 2016, p. 12.
  • 13
    Mr Tim Stapleton, Director, Services Trade and Negotiation Section, Department of Foreign Affairs and Trade (DFAT), Committee Hansard, Canberra, 7 November 2016, p. 16.
  • 14
    Department of Immigration and Border Protection, ‘What is labour market testing,’ < http://www.border.gov.au/Lega/Lega/Form/Immi-FAQs/what-is-labour-market-testing-for-subclass-457 >, accessed 14 November 2016.
  • 15
    Associate Professor Joo-Cheong Tham, Submission 61, p. 5.
  • 16
    Mr Stapleton, DFAT, Committee Hansard, Canberra, 22 February 2016, p. 9.
  • 17
    Ms Deidre Willmott, Chief Executive Officer, Chamber of Commerce and Industry of Western Australia, Committee Hansard, Perth, 5 October 2016, p. 22.
  • 18
    Mr Brendan Pearson, Chief Executive, Minerals Council of Australia (MCA), Committee Hansard, Canberra, 17 October 2016, p. 13.

 |  Contents  | 
Top